PEI’s tax recipe will lower prices for restaurant customers

April 19, 2012, Charlottetown – The government of Prince Edward Island
took a major step in yesterday’s budget to increase the province’s
competitiveness and reduce the tax burden on restaurant customers.

April 19, 2012, Charlottetown – The government of Prince Edward Island took a major step in yesterday’s budget to increase the province’s competitiveness and reduce the tax burden on restaurant customers. Combining the provincial sales tax (PST) with the GST at a rate of 14 per cent beginning April 1, 2013 and introducing full input tax credits for operators will help grow jobs and investment in the Island’s restaurant industry.

“Merging the two taxes will lower prices for restaurant customers and increase investment in the restaurant industry,” says Luc Erjavec, Atlantic Canada vice-president for the Canadian Restaurant and Foodservices Association (CRFA). “Island operators have been at a competitive disadvantage with both neighbouring jurisdictions and the grocery industry for far too long. Our experience in other Atlantic Canadian provinces shows this first step will help grow sales, investment and jobs.”

Currently, PEI operators must charge customers a combined sales tax of 15.5 per cent on restaurant purchases. Operators also do not receive input tax credits for the PST portion of their taxes.

As PEI’s third-largest private-sector employer, the restaurant industry directly employs nearly 5,100 Islanders at more than 320 establishments. Twenty-two per cent of Canadians were first employed by the restaurant industry, making it the number one source of first jobs.