Saskatchewan

Sask. restaurants and bars suffering from PST, says industry

A number of tax and legal changes made by the provincial government in the last year are taking a toll on Saskatchewan restaurants and bars, say industry advocates. Recent sales numbers from Statistics Canada would appear to back up those claims.

StatsCan reports Saskatchewan was the only province to see a decline in food sales from July 2016

Sales figures show fewer of these are being poured in Saskatchewan restaurants and bars. (CBC)

Changes to legislation and taxes made by the provincial government over the past year are taking a toll on the bottom line for Saskatchewan's restaurants and bars, say industry advocates.

Recent sales numbers from Statistics Canada also back up those claims.

"Our industry is the real barometer for the health of the economy. When our industry isn't doing very well, the province isn't doing very well," said Mark von Schellwitz, who represents the province's food service industry on behalf of Restaurants Canada.

In April, the province added a six per cent tax on restaurant meals. At the time, von Schellwitz predicted expanding the PST to restaurant meals would cost the industry $140 million. The government said the extra revenue would add $94 million to provincial coffers.

Von Schellwitz, who speaks for businesses from food trucks to chain restaurants and about 38,000 employees in one of Saskatchewan's largest employment sectors, said he feels his prediction is on track and doubts the government will realize its own projection.

Mark von Schellwitz, Western Canada vice president with Restaurants Canada, says 84 per cent of the association's Saskatchewan members say the PST addition has hurt their business. (CBC)

Only province to decline in sales

According to Statistics Canada, Saskatchewan was the lone province to see a decline in food service sales from July 2016 to July 2017. During that period sales grew in every province, while Saskatchewan saw a drop of 1.2 per cent.

Right after the tax took effect in April, von Schellwitz said there was an 8.7 per cent drop in sales, which has continued to decrease by two per cent every month afterwards.

"We'd love to see [the government] return to food tax fairness in the province and get rid of this really punitive tax measure."

Tim Rogers, co-owner of Lancaster Taphouse and The Capitol, says he's had to let go of a few people to "to keep their heads above water". (Matthew Howard/CBC News)

'A tough nine months'

The decline in sales is nothing new to Tim Rogers, co-owner of Lancaster Taphouse and The Capitol in Regina.

"It's been a tough nine months or so on us and all bars and restaurants in this province. The economy was sort of slow heading into the year. Adding the PST, upping the liquor changes, some of the other changes the SLGA has made, has made life difficult for us," Rogers said.

An additional $5.22 in taxes on this restaurant bill at Lancaster Taphouse in Regina. (CBC)

He said he's had to let people go "to keep their heads above water".

"I feel like at the end of the day [the government's] not going to see the revenue they were expecting from that and it just does nothing but hurt everybody."

Too scared to drink with .04 rule

While adding the PST and increasing liquor charges may be obvious factors in declining sales, another law change is also at play.

In January, the province started three-day seizures of vehicles of drivers caught with a blood-alcohol level of .04 per cent.

​"We definitely hear a lot on the .04 and what we hear are people are just scared," Rogers said.

"They are scared to go out and have a glass of wine and chance it so they don't."

He acknowledged the problem of drinking and driving in the province, but said the government should revisit the law and help make taxis more reliable and affordable.

"Even though we are bars, our goal isn't to get people drunk. We like working the local craft breweries and fine wines and it's a shame because it's a tasting and flavour experience that we try and build and I think we get lumped in with drug dealers. It feels that way."

Survey results 

Restaurants Canada surveyed its members in June, here are the results: 

  • 84% say the new tax is hurting business
  • 74% say the negative impact on sales will be permanent
  • 73% have been forced to reduce employee hours
  • 50% are laying off staff
  • 28% are reducing operating hours
  • 90% have had customers complain about the new tax

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With files from Adam Hunter, Stephanie Taylor