City food industry not convinced by HST changes

Restaurant owners in Prince Rupert are apparently unconvinced by the BC government’s attempt to win support for keeping the HST by promising to cut the tax by two per cent over the course of two years, if British Columbians decide to keep the it in place instead of reverting back to the old GST and PST system.

The Prince Rupert Northern View did an informal poll of some of the restaurant owners from around the city, and almost all of were against the HST with more than a couple calling the tax a “cash-grab.” None of them had been convinced by the Clark governments offer to have the HST reduced.

According to the President of the Prince Rupert Chamber of Commerce, Chad Cunningham, the Prince Rupert business community’s opinion on the HST is split, with those in industries who stand to get rebates or exemptions generally being in favour of keeping the current system, and businesses like restaurants which now have to pay more tax, against.

Cunningham says the Chamber has decided not advocate towards any particular position, unlike the BC Chamber of Commerce, which has come out heavily in favour of the HST.

The food and service industry has been one of the most vocal business sectors to oppose the HST since it was put in place, because under the previous system restaurant meals were exempt from having GST being added to the price, but liquor sales were not exempt.

When the HST came in, it amounted to an overnight price jump of seven percent, which many restaurant owners in Prince Rupert and across the province say have hurt business..

“Its hurting us because there’s a perception that prices have been raised, and so people are now watching their extra expenses and they don’t go out as often. Maybe they went out once a week and now they only go out twice a month,” says the owner of Opa Sushi, Kristi Farrell.

Farrell says the changes that the Clark government is promising to make to the HST are would help, but problem is that the two per cent drop will not happen entirely until 2014.

“At first I thought it was good because the drop will definitely help, but then I realized that it was phased-in drop.. It will be down one per cent by 2012, and two per cent by 2014, but we might be losing businesses in the meantime because of it, ” says Farrell.

Farrell says that for restaurants costs seem to be rising everywhere, the HST also now makes ingredients more expensive, a minimum wage increase is in the works, and stricter drunk driving rules have cut down on liquor sales. Even her own restaurant is being affected by the Japanese tsunami and now has to pay more for ingredients and shipping from that country.

It appears if the Liberals were trying to win over opponents with their HST changes, it hasn’t worked in the food industry.