In the lead-up to the Oct. 20th municipal election, the Canadian Restaurant and Foodservices Association (CRFA) asked restaurant operators in Halifax Regional Municipality (HRM) to identify the most important issues facing their business. A total of 81 respondents representing 213 foodservice businesses across HRM participated in the online survey. These businesses include independent and chain restaurants, ranging from quick-service to table-service establishments. The survey was conducted between June 15 and August 1, 2112.
Red tape and high commercial tax rates & assessments are the two biggest issues affecting restaurant and foodservice operators in HRM.
Q: How important are the following issues to your business? Responses above represent ‘important’ and ‘very important’
n = 81
Nearly nine out of ten foodservice operators in HRM said that reducing red tape for businesses was either very important or important for their business (Figure 1). High commercial tax rates and assessments were also identified as a significant challenge for foodservice operators when it comes to doing business in HRM. Fully 88% of respondents rated the need to reduce commercial tax rates & assessments as important and or very important to their business.
An open-ended question asked what should be the number one issue for the incoming mayor. Again, the common theme was the need to reduce commercial tax rates and spiraling assessment rates.
The need to reduce the level of fees, taxes or levies on businesses is the third-most important issue facing the industry according to 83% of respondents.
Nearly eight in 10 operators identified the need to improve street-scaping such as lighting, maintenance, signage and planters as well as the general cleanliness and appearance of the city as important to their business. In contrast, less than three in 10 respondents believe the preservation of historic buildings and view planes were important to their business.
City Hall doesn’t understand the importance of the restaurant and foodservice industry to HRM and has lost touch with the challenges facing small businesses.
Q: Please rate the following statements from "strongly disagree" to "strongly agree“: City Hall understands the importance of the restaurant industry to the city’s economy, culture and vibrancy.
n = 81
Less than two in 10 respondents believe City Hall understands the importance of the restaurant and foodservice industry to the city’s economy, culture and vibrancy (Figure 2). This is in stark contrast to the views of the public where eight in ten Canadians believe the foodservice industry is a vital source of employment. A further seven in ten Canadians believe the foodservice industry is important to the economy.
The survey also found that just two in 10 respondents believe that City Hall is in touch with the challenges that face small businesses. Perhaps it is this disconnect that has led to the high rate of commercial taxation and the high degree of red tape.
Despite the disconnect with City Hall, a majority (55%) of respondents still believe that HRM is a good place for their business to grow and prosper. Nevertheless, a significant 37% of respondents disagreed with this statement.
Restaurant owners do not believe the level of service in HRM matches the level of taxation.
Given the concern with high commercial taxes and assessments at startling 79% of HRM foodservice operators do not believe they receive good value for their tax dollars.
Transportation is a key business concern for foodservice operators in HRM
Eight in ten foodservice operators gave low marks to City Hall for including the restaurant industry as part of its economic development plans.
Roughly half (54%) of restaurant operators have scaled back their expansion or renovation plans.
Q: Have you changed or scaled back your investment plans to open a new restaurant or to expand your restaurant in HRM in the past 12 months? (select all that apply)
n = 81
The combination of an economic slowdown and red tape at City Hall have led 32% of foodservice operators to scale back their plans for unit expansion and another 31% to scale back renovations of their current establishment(s) (Figure 3).
If we conservatively estimate that 15% of HRM operators scaled back their unit expansion (compared to the 32% response from the survey), this would represent a lost opportunity for 135 new business locations in HRM.1 If we use a conservative estimate of 10 people employed by the average foodservice business in HRM, this represents 1,350 direct jobs, many of which would have gone to young people, in addition to thousands of indirect jobs for tradespeople and business services.
Based on the CRFA survey, the most significant overarching message from restaurant operators is for the new Mayor, councillors and City Hall staff to recognize the importance of the $1.6-billion restaurant industry to the Nova Scotia and HRM’s economy. The HRM needs to create a more favourable investment climate by lowering commercial taxes and fees and by cutting red tape around issues such as permits and approvals. With 2,000 restaurant locations and 30,000 employees across Nova Scotia, HRM has an opportunity to work with this important sector to build a partnership that will help both business owners and the HRM to grow and prosper.