April’s jump and expansion of the provincial sales tax (PST), is hard for most in the food and beverage industry to digest, according to a Regina brewery.
“In the brewing industry, we get taxed to death on all sorts of things and so it’s just one more thing that gets piled on — it makes it that much tougher,” said Mark Heise, president of Rebellion Brewing.
As a supplier for most pubs and restaurants across Saskatchewan, Heise said many places are noticing an estimated 15 per cent decrease in sales, specifically because of the six per cent now added onto peoples’ meal bills.
“(It’s) significant because there aren’t high margins in this business, so that really hurts. You’re seeing that with the closures that are happening,” said Heise.
Even though Rebellion continues to grow and expand their staff, Heise said they’ve had to cut back in other ways, including closing their tap room earlier some nights because of the downturn in people going out.
Heise believes it’s due to having to pay that six per cent PST, paired with the new drinking and driving legislation, which seizes peoples’ vehicles for three days if they drive with a blood alcohol level of 0.04 or higher.
Having consistent and affordable options to get home safely after a night of drinking is something Heise said is crucial to get business back up to speed in Regina.
“Hopefully we can possibly get some better transit options and ways for people to get in and out of the downtown and enjoy themselves in a cost-effective, safe way,” said Heise.
The brewery president said he’s raised his concerns on both a municipal and provincial level. However, he explained the responses have shown the lack of consideration for the pub and restaurant industry.
“(It’s) a little disheartening that people maybe haven’t thought through the potential impact of these changes,” he said.
Heise vowed he’ll continue to “advocate in a positive way” and push for all levels of government to take a look at remedying these roadblocks in his industry.
Restaurants also feeling the PST impact
The six per cent PST added onto restaurant meals is too tough for some local restaurants to chew.
“It was a hard impact just with the announcement alone, and we’re seeing a decline in revenue because of it,” said Nathan Snell, general manager of Rock Creek on McCarthy Boulevard.
Snell added that they haven’t raised the prices on their menu because they understand the financial challenges of eating out — and he’s hoping they can keep it that way.
Now, Snell is calling on the provincial government to take a second look and reverse this tax expansion.
“Maybe (the provincial government) can look back and realize that their projections are wrong, then maybe assess the situation from there,” he said.
In June, Restaurants Canada released results from a survey taken by their members, which show 84 per cent feel the meal tax is “hurting business” and 74 per cent feel the “negative impact on sales will be permanent.”
When it comes to the direct effects of the new tax, 73 per cent say they’ve “been forced to reduce employee hours” and 50 per cent say they’re laying staff off.
The distaste seems to be mutual for those eating out; the survey shows 90 per cent of customers complain about the extra six per cent tacked on their bill.