Restaurants 'caught between rock and hard place' with PST, higher alcohol taxes

Saskatchewan’s family-owned restaurants and bars could be in trouble as they start to pay higher taxes.
 
As of April 1, restaurant meals will no longer be exempt from provincial sales tax (PST). Liquor markups are also increasing anywhere between 4 and 6.8 per cent.
 
That has pub owner Gary Grady worried.
 
“We struggle already,” he said. “I get that we all have to buckle down, but we’re all taking it in the wrong side.”
 
Grady’s family has owned Mur’s Tavern in Dundurn and Poor Gary’s Pub in Hanley for 22 years.
 
He said the PST may drive more customers out the door even as business is already down more than 20 per cent with the economic downturn. 
“We’re caught between a rock and a hard place,” he said. “You can’t increase your prices any more… We’ll have to take the brunt of (the tax).”
 
Leopold’s Tavern owner Greg Hooker said he was surprised by the changes.
 
“It’s easy to go after the sin taxes,” he said. “But I wasn’t expecting to be hit directly like that.”
 
Hooker said other tax increases will impact restaurant spending, and the introduction of PST won’t help.
 
“I’m guessing the children’s clothes will come before the night out.”

CELEBRITY CHEF: ‘PEOPLE WANT TO EAT’

The first winner of Top Chef Canada isn’t as worried as his colleagues.
 
“Some people will watch their money closer,” Dale MacKay said. “At the same time people want to eat and still need to have a good time.”
 
The owner of Saskatoon’s Ayden Kitchen and Bar and Little Grouse on the Prairie told 650 CKOM that as long as the business model is strong, a restaurant doesn’t have to worry.
 
However, MacKay admits it’s likely some restaurants will shut their doors because of lost business.
 
“This is one more hit that will probably put some nails in some coffins,” he said.
 
MacKay said if restaurants do close, it’ll be tough for him and his teenaged son.
 
“We eat out probably two or three days a week,” he said.
 
“We don’t want to see anyone go out of business.”
 
INDUSTRY ADVOCATE RESPONDS
 
Restaurants Canada condemned the tax changes, saying they could lead to significant job losses in the industry.
 
Mark von Schellwitz, Restaurants Canada’s western region vice president, was at the legislature in Regina to react.
 
He compared the tax introduction to the implementation of the GST in 1991.
 
“We had the single worse year on record,” he said, noting 32,000 jobs were lost across Canada.
 
He also pointed to B.C., where he said the addition of HST to restaurant sales cost the industry $150 million.
 
von Schellwitz said the results could be just as detrimental in Saskatchewan, especially since restaurants only have nine days to prepare for the changes.
 
“It doesn’t leave a lot of time.”