Survey shows B.C. restaurants hit hard by HST

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Survey shows B.C. restaurants hit hard by HST

The British Columbia restaurant industry’s worst fears about the Harmonized Sales Tax (HST) have been realized.

Aug. 3, 2010, Vancouver – The British Columbia restaurant industry’s worst fears about the Harmonized Sales Tax (HST) have been realized.

In a province-wide survey by the Canadian Restaurant and Foodservices Association (CRFA), 72 per cent of respondents said the HST on restaurant meals has had a negative impact on business since it took effect July 1.

On average, respondents reported a 10 per cent decline in sales compared to the same period last year.

“There’s no question the HST is hurting B.C. restaurants of all types, from fine dining to take-out,” says CRFA president and CEO Garth Whyte. “On behalf of our members, we will continue to press Premier Campbell for action. With numbers like these, we urgently need government to work with us to mitigate the negative impact of tax harmonization.”

The CRFA survey found that:

• only 3 per cent of respondents report the HST is having a positive impact on their business;
• 72 per cent say the HST is having a negative impact;
• 53 per cent say their customers are spending less;
• 56 per cent have fewer customers;
• 47 per cent have been forced to cut back on staff/staff hours to adjust to the HST; and
• 26 per cent have had to offer more deals and promotions to mitigate the HST fallout.

Since HST was first announced more than a year ago, CRFA has warned government that the new tax would result in significantly lower sales for British Columbia’s fourth-largest private-sector employer.

“The HST has dramatically tipped the playing field against restaurant operators. Their customers are spending less or diverting their spending to tax-free alternatives in grocery stores,” says CRFA vice-president Mark von Schellwitz. “It’s time for government to step up and take action to help our members deal with a very tough transition to this new tax.”

Despite receiving more than 200,000 signed petitions from restaurant industry owners, staff, and customers opposing a new meal tax, government has thus far not addressed their concerns.
The CRFA survey was conducted online between July 26 and 31, 2010. The findings represent 802 British Columbia restaurants.