Wednesday, December 09, 2009

Canadian Restaurant and Foodservices Association fires both barrels at BC Liberal government over Harmonized Sales Tax - launches campaign against HST

Are you fed up yet? With the Harmonized Sales Tax that is.

That's the slogan coined by the
Canadian Restaurant and Foodservices Association (CRFA), which today launched a campaign against the Harmonized Sales Tax being charged on restaurant food called No Meal Tax.

The CRFA has clearly given up on persuading the BC Liberal government to back off on the HST despite close ties to Premier Gordon Campbell - it will be very interesting to see how the government reacts to an ally taking it on in public.

The CRFA earlier released a public opinion poll that showed widespread opposition to the HST - both in general and specifically in regard to the new 7% tax that will be imposed on all restaurant food - conducted by former Campbell chief of staff Greg Lyle.

Here's the news release from the CRFA - and be sure to sign up on their petition!

* * * * *

New meal tax will add 7 per cent to your food order: 'Fed up yet?' campaign asks B.C. consumers to speak out against impacts of higher dining prices, potential job losses if the HST is added to restaurant meals

VANCOUVER, Dec. 9 - The British Columbia restaurant and foodservice industry today launched its new campaign to educate B.C. consumers and encourage them to speak out against a new meal tax.

The group has set up a website - - to serve consumers the facts about the effects of the 7 per cent meal tax and links to an online petition addressed directly to the provincial and federal governments. Foodservice workers will also be spreading the word as part of an associated in-restaurant campaign.

"A new 7 per cent meal tax will take a big bite out of customers' wallets, employees' wages and threatens our members' livelihoods," said Mark von Schellwitz, Vice President Western Canada of the Canadian Restaurant and Foodservices Association (CRFA). "We're calling on consumers and industry staff to let their MPs and MLAs know that they are against this unfair tax."

The potential losses for the B.C. restaurant and foodservice industry are very real. Economic analysis indicates that adding a 7 per cent meal tax will lead to a 7.5 per cent drop in overall restaurant sales.

This translates into a $750 million loss in B.C. - nearly $50,000 a year for the average restaurant. Since the majority of operators' costs are fixed, the only way to offset these losses will be to cut staff hours.

In an industry that employs 173,000 people, a new meal tax could have a profound effect on the province's unemployment rates and the economy as a whole.

"Our industry employs more people than the agriculture, forestry, fishing, mining, and oil and gas sectors combined," said Ian Tostenson, President and CEO of the B.C. Restaurant and Foodservices Association (BCRFA).

"Our campaign will give a much-needed voice to the thousands of restaurant workers whose jobs could disappear if governments don't start seriously working with us to come up with solutions that meet everyone's needs."

Findings from a recent survey commissioned by the CRFA for the B.C. restaurant and foodservice industry demonstrates that 64 per cent of B.C. consumers agree with the industry and favour exempting food in restaurants from a new meal tax.

Eighty-one per cent think it is not fair to implement a tax that will hurt some workers and businesses without doing something to help those feeling the greatest impact.

About the Canadian Restaurant and Foodservices Association:

CRFA is one of Canada's largest business associations, with a membership of 33,000 representing independent and chain restaurants, bars, caterers, institutions and other foodservice providers, including more than 4,000 British Columbia-based members. CRFA's mission is to create an environment to help members in every community grow and prosper. Canada's $60-billion foodservice industry employs more than one million people in communities across the country.

About the B.C. Restaurant and Foodservices Association:

With more than 25 years of leadership, the BCRFA is the foremost advocate and resource for the restaurant and foodservices industry, ensuring long-term dynamic growth within B.C. The Association is a representative body of restaurateurs, foodservice retailers, suppliers and educators. It works to enhance the image and integrity of the industry through positive communications, education and promotion of operating standards that encourage excellence.



ron said...

As a semi-retired pensioners, on the Freedom 85 plan, my wife and I will simply eat out - and tip - less.

The HST will likely negatively impact on both the restaurant and related tourism industries in equal measure.

The federal Liberals voting along with the Tories on closure to wisk the Hated Sales Tax through is especially appalling.

Both the federal Tories and Liberals are complicit in imposing the greatest tax grab and tax shift from corporations onto individuals in our history.

Crankypants said...

Yes they are against the HST because of the impact to their businesses which will definitely be negative. However, I think it is a stretch to assume that their opposition has anything to do with the fact that sales taxes are being shifted from big corporations onto the backs of consumers. They want us to support their cause, but they sure aren't too concerned about its impact on John Q. Public.

Bill Good had a segment today with Ian Tostensen, Mark Von Shellwitz and some pizza vendor from Mission on his show today. Throughout the whole segment not one of the four, including Bill mentioned that the y may begin to lose business because the disposable income of many people will be impacted by the HST.

As a matter of fact, they are not fighting the HST, just the fact that it will be applied to their industry. If they are still able to wrest some sort of compensation from the government, they will go back to licking Campbell's boots.

There is no way in hell I will be signing their petition. I would have if they were fighting for the average British Columbian, but we mean no more to them than we do to our current provincial government.

The Everyconsumer said...

I dislike the HST, resent the way it was sneakily brought in after the election, and so on. I will sign all the petitions. But...

Is an additional 70 cents on my hamburger and cola at my favourite diner going to prevent me from continuing to enjoy that act of consumerism? Hell no. After a couple visits post-HST I'll completely forget what all the fuss was about as I chomp down on my favourite burger.

I've heard some food vendors dismiss the HST as a non issue for them because they will simply work it into their menu prices and the price difference will hardly be noticed, except by only the most loyal of customers, who will not let an added 50-to-70 cents on a lunch deter them from continuing their loyalty.

The industry's predictions of doom and economic collapse are complete hyperbole. Yet, I support them and will sign their petitions. But as a consumer in the mid-to-low income bracket (working class), I'm so old and cynical, there's no way something like an HST can even phase me anymore.

If the tax is not defeated, I can see the HST as providing restaurants with a lot of fun, creative opportunities to slam the govt and boost customer base, such as offering an "HST-Free Burger" or having one day (Mon or Tue) as HST-Free day - 7% off all meals!

Bill, correct me on this one - did the CRFA not donate money to the BC Liberals? Were they not part of that BC business consortium that came out in support of the Libs during the campaign? If yes, they deserve to be punished with this tax. That will serve them well not to make that mistake in future elections.

Bill Tieleman said...

There's no question that the CRFA has been supportive of the BC Liberals in the past - they are clear on that themselves.

But the BC Liberal government is putting the boots to the industry and they are fighting back - so I support them wholeheartedly and for many good reasons.

My own daughter works as a server - she knows and her co-workers know that the HST will hurt their business, their income and their tips. That's reason enough to support the CRFA petition in my view.

It will also, as Ron points out, hurt people like himself on limited incomes who will have to reduce their eating out.

But I think Crankypants and others may not have had a good look at the CRFA website, which includes this line in one section:

"It’s very simple. The new Meal Tax will hurt our communities while supporting tax breaks to business.

How can we support a tax that “will raise more money from consumers to give tax breaks to business and there won’t be more money for health or social programs.”

That's exactly right - but it's another business association saying it, not me, not Carole James, Bill Vander Zalm or Jack Layton.

I urge you to sign the petition.

Anonymous said...

Bill, today finance minister Graham Steele of the new NDP government in Nova Scotia stated that they are now one step closer to increasing their HST by another 2%.

The only government in Canada to so and yet another hit to the consumer.

Based upon this action by Canada's only NDP government, how the hell are we supposed to believe Jack Layton or Carole James?

We already know James' reversed position on the carbon tax after the election. Food for thought.

Bill Tieleman said...

I'll catch up on the Nova Scotia situation but on Carole James - she did not reverse her opposition to the carbon tax, she said their fight was over and the election ended any chance of removing or altering the carbon tax.

Anonymous said...

Excuse me, but ...

"Carole James - she did not reverse her opposition to the carbon tax, she said their fight was over and the election ended any chance of removing or altering the carbon tax."

Are you saying we get the HST + CARBON TAX????

Anonymous said...

The restaurant and foodservices will probably lose a few bucks when the HST comes into effect. Campbell and Ontario's premier McGuinty had this in the works for quite awhile.
And there are others. This bilking of the taxpayers will end up in corporate pockets. Corporations will use this guaranteed income to reelect these corrupt governments. We will never tip again if we happen to eat out ,and we plan on marking the credit card 'NO TIP because of HST.
If these restaurant people were serious they would put a sign in their window VOTE NDP
Come election time they will all support the Liberals
I thought BC and Ontario were the only provinces that were going for HST

Anonymous said...

In other good news:

The banks are not losing any money...

King said...

If the majority cared, something will get done. Dream on. The majority does not care enough do anything such as goto a rally or sign a petition. 4 million plus in this province. Even eliminating those under 18, still probably in the 3 plus million. Where's this 80-90% that are against it doing anything about it. Tielechild with his 120K facebook (lame baramoter) and even a generous 10K HST rally is truly the minority. Let the good times roll HST. The CRFA deserves no break.

Florio said...

Part 1

I am a restaurateur/bar owner and I'd like to interject with a few comments. I am in support of the HST. Yes, I'm going against the grain... but am I really?

I haven't run into one restauranteur that is nearly as concerned as the CRFA, if at all. I know that this tax will harm and affect some people, but I will speak only to this specific restaurant topic.

Here is why I believe that the HST is good for my business, or at least why it won't affect us as much. 1. Liquor. Any restaurant/bar that sells liquor will see the tax actually lowered. A consumer who buys an alcoholic beverage is currently taxed at the rate of 15% (10% PST + 5% GST), which is 3% higher than the combined HST.

For consumers, this means that their favourite bottle of wine, beer or spirit at a restaurant will actually decrease by 3%. Almost all restaurants add the tax at the end of the bill. In this situation the consumer benefits.

For those bars/nightclubs whose beverage prices generally are tax included, the business benefits by gaining an extra 3% profit, if their drink prices are not reduced. In addition to this, currently, all liquor purchases made by restaurants from the Government Liquor Store are not PST exempt and are forced to eat the cost.

Therefore, restaurants will be able to either a) lower their prices because inputs are cheaper or b) keep the future PST(HST) refund for themselves. Either way, the Restaurant can benefit, by a) attracting more customers by dropping drink prices, or b) putting more money into their pocket. (In theory, all liquor retailers including the Government Operated Liquor stores should be adjusting their prices to reflect the change as well, so this benefits even the Retirees who drink their wine, spirits and beer at home).

2. Food. Yes, people will pay more. Yes a donut at Tim Hortons will cost an extra 6¢, but honestly, most people suck up more than that because they are lazy to bend over when they are vacuuming. Come on.

Is anyone going to stop buying a coffee and a donut because of a couple of pennies? I am not a socialist in the least, but why do we restauranteurs believe that our product should be tax exempt.

Why are we so special. We survived the GST and we will survive the HST. Who knows, maybe in a decade, when the long term benefits of the HST start to show, the government might actually lower it (That's the optimist in me, and hey, it happened with the GST).



Florio said...

Part 2

As far as lost jobs are concerned, the recession has hit the restaurant industry much more than I could ever see a small 7% increase doing. I honestly cannot believe that 95% of people who frequent restaurants will consider stopping because of this small amount. If an average person goes out for dinner once a week (which may not be the average, I have no idea) and spends about $35 on a dinner, that person would be spending $2.50 more.

Hardly anything to fuss about. That translates into $10 a month. I can think of many ways most people waste more than that on some really ridiculous things. Now consider for a moment that the average person goes out to a restaurant for a burger and a few beers. Burger @$12 +HST and two bottled beers @$5 +HST.

Currently, there would be a total tax of $2.10 with todays tax structure. After the HST is implemented, a person would pay $2.64. This is a net increase of $0.54, which is only an a 2.2% increase in the overall bill. Far from the 7% everyone is crying about. Sure not all customers in all restaurants spend like that... but many do.

3. Last but not least. Obviously, the HST benefits that all other businesses will enjoy, will also be enjoyed by Restaurants. Lower operating costs will be certain as HST will be fully credited. This in itself will allow restaurants to either drop prices or at least not raise them in the face of constantly increasing commodities and food costs. And as far as tipping is concerned, why would someone tip less.

That is a ridiculous way of subsidizing the price increase... Keep in mind, that in other countries where people don't tip (like Australia), server wages are up to $18/hr. But here's the catch, a plain old cheeseburger and fries in a pub can run you up to $20.

So next time, remember why you tip. You can either eat $20 hamburgers and not tip, or pay $12 a little bit of tip and get some great service at the same time.



what's Pab said...

Well written Florio. Maybe Tieleman should learn something before he writes crap. He'll be calling you a PAB guy no doubt.

Anonymous said...

Why should any one be expected to tip Are the owners of these restaurants not paying them enough to get by on? Most of them are part time no benefits and tipping helps the owners There must be a hell of a turnover. How many of these people are covered with union contracts ?
If restaurants couldn't sell booze they would have to lock the doors.
We neither drink or smoke so that is not a concern ,but the money we save by not eating out we will spend on our grandchildren. No TIPPING. Yes were from the prairies and we never lost site of the fact that the cheapest and cleanest food you can eat is served at home.

Bill Tieleman said...

Au contraire, what's PAB said.

Florio sent me a very long posting by email - too long to fit in one post here - identified himself by full name and email and asked me if I would help him post it even though his views are the opposite of my own.

I have happily done so because this is a free speech blog and I believe his perspective is very worthwhile hearing.

Florio didn't insult me, as other Anonymous posters did. He is clearly not PAB.

Perhaps I've been unfair to label the nasty posters as potential Public Affairs Bureau employees - perhaps they are merely unpaid BC Liberal sychophants threatened by the fact that the CRFA is opposing the government's main economic policy - the HST.

Crankypants said...


You may want to check out your information on the alcohol rates. Just shortly after the HST was brought forward by Colin Hansen, someone questioned him on the fact that the liquor tax would be reduced by 3% and therefore the cost would go down. His response is that they would just raise the price of the alcohol by an equal amount at the government liquor stores. Thus no net price reduction.

Another thing is that even if the government decides to give the restaurants a break on booze in response to the CFRA's campaign, that will only help licensed establishments. Those that are not will get squat.

Finally, you may be missing a very important point. If people have less money to spend because they have had to fork out HST on so many more items and services, they will not be able to afford to buy your hamburger or whatever. People cannot spend money they do not have.

CRA said...

The 10% liquor tax plus 5% GST will be replaced with a single 12% HST. Simple concept crankypants. It is the choice of the store or restaurant to decrease their price. The restaurant industry is notorious for crying the sky is falling. Nothing happen when smoking was prohibited. Millions of dollars are unreported by restaurant staff. It's not an angelic industry so no sympathy from the public. There's no gst on groceries. Maybe the obese can start cooking at home rather than getting fat at restaurants. Restaurants is a luxury item

Crankypants said...


To date the government has not stated that they will reduce the liquor tax, but when the issue was brought up this summer, Colin Hansen stated that the price of booze will not go down. I checked the government website today on the HST, and there is nothing officially written on booze.

However there was an article in the paper today addressing the new 21% parking tax being levied by Translink on January 1,2010. Hansen states that he will change the name of the tax so that Translink gets what they asked for. And if I read the info correctly, the new HST will apply to the parking fees plus the new Translink tax.

With this revelation on the parking issue, don't be surprised if they decide to leave the liquor tax in place and apply a further 7% on the whole thing. Remember, they are hurting for revenue, and governments love to pick on the so-called "sin" products, booze and tobacco.