A loss of at the head office of Veterans Affairs in Charlottetown could have a major impact on local business.

The federal department says 143 jobs are being eliminated, part of a series of cuts. Veterans Affairs first started talking about cuts in October 2011 and suggested to union officials in January this year 800 positions could be lost by 2016.

The Veterans Affairs offices loom over neighbouring businesses downtown, and all those office workers bring daily business with them. Joseph Sammoun's restaurant sits just a few steps away from the doors of the Veterans Affairs building.

"So many people pass through like Monday to Friday," said Sammoun.

"We have regular customers they come every day since, some of them, 21 years."

Several businesses along University Avenue are connected to Veterans Affairs by an alley that runs alongside the office building.

Staff at Beanz coffee shop say on storm days the decision to open often depends on what happens at Veterans Affairs.

The department says most of those jobs will be eliminated through attrition and early retirement, but that will not mitigate the economic impact of the job losses.

Charlottetown Chamber of Commerce president Keith O'Neill said the money spent by Veterans Affairs staff has an effect well beyond what is clearly visible in the adjacent restaurants.

"It's a dramatic impact on our local business community," he said. "It's these individuals who shop, who spend their dollars on Prince Edward Island."

O'Neill has asked the federal government to shift skilled employees to other public sector jobs, instead of cutting them.

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