The Reminder is making its archives back to 2003 available on our website. Please note that, due to technical limitations, archive articles are presented without the usual formatting.
A proposed meal tax for Saskatchewan restaurants could damage the local economy and mean layoffs in Creighton and Denare Beach. The new Saskatchewan budget to be released this Wednesday could include a seven per cent meal tax, a levy which would go toward education financing. Along with the GST, this would result in a 14 per cent tax on restaurant food. Finance Minister Harry Van Mulligen has not confirmed or denied the new tax is on the way, saying that restaurateurs will have to wait until the budget comes out. "We ourselves figured out that the meal tax would probably make us cut back four employees just in our business alone," said Jan Gourlay, who owns RJ's Restaurant in Creighton with husband Rod. "People aren't going to eat out as much, therefore revenue goes down, therefore you can't employ as many people because you can't afford them." Jan believes the tax would hinder Saskatchewan's efforts to retain young people because more of them would have to leave the province to find work. "We've given lots of young students jobs, probably their first jobs, and those are probably the ones who wouldn't get their first jobs here again," she said. The Gourlays have actively opposed the potential levy, sending letters and faxes to their MLA and MP, and signing a petition of opposition. "We believe it would be very detrimental to our business," said Jan. Not far from RJ's sits the recently opened Mean Gene's Burgers, a business whose owner also has concerns about the possible tax. See 'Tax' P.# Con't from P.# "It's tough enough as it is to be in the food business," said Don Kennedy. "A tax is the last thing we need." Kennedy couldn't state whether the tax would result in staff reductions at his restaurant, but said that is something which would have to be considered if revenues decline. Like many of his counterparts in Saskatchewan's restaurant sector, Kennedy isn't holding his breath that the province will steer clear of the new tax. "My view is they probably are going to try and tax food, but I don't know," said Kennedy. "Why can't they just say what their position is? If they can't rule it out, you have to wonder." The tax might also leave some employees at Rocky View OTA in Denare Beach looking for work. "I think that it would affect sales negatively, and if sales are negatively affected, then staff would have to be cut back," said co-owner Bruce Joa. Joa said it doesn't make any sense for the government to reduce its PST by one per cent in 1999 and now look at taxing another sector. "If they feel they need more revenue, why did they drop the sales tax in the first place?" he said. Not all restauranteurs believe the tax would hurt their bottom line. While opposed to the levy, Robin Morissette, owner of We're Cookin' in Denare Beach, doesn't foresee any impact on her business. "With us being a border town, people pay the two (seven per cent) taxes in Flin Flon, anyway," she said. "I don't think it will really bother us out here." That hasn't stopped her from placing a petition in her restaurant opposing the tax. As of yesterday afternoon, it had been signed by 54 customers. Morissette plans to fax the petition to her MLA. And hers is far from the only petition the government will see. This week, the Saskatchewan Legislature received petitions with 132,000 signatures of people against the tax. Appropriately, the petitions were stuffed in chicken buckets. Meanwhile, the Canadian Restaurant and Foodservices Association maintains that the meal tax would cost the average restaurant owner $42,800 each year, a total of $96 million in lost revenue across the province. It would also mean the loss of thousands of jobs, according to the association. "When GST was imposed in 1991, our industry immediately lost 10.6 per cent in sales and 42,000 people lost their jobs," association spokesman Mark von Shellwitz told CBC. The idea for the meal tax originated with a special commission looking at ways to finance the education system. The Boughen Commission recently submitted its report to the province. Aside from restaurants, the meal tax on food would also apply to cafeterias, coffee shops, and snack bars.
