Restaurants to lose $750 million under harmonized tax
B.C. Premier Gordon Campbell is running into stiff opposition from powerful economic sectors on a proposal to harmonize provincial PST and federal GST into one whopping 12 per cent tax.
The restaurant industry, one of the largest employers in B.C., has roasted the government for lying to the people of B.C. during the recent election campaign during which the Liberals said there was no plan for a harmonized tax.
Without any public consultation, Gordon Campbell reversed course after the election. This new tax came out of the blue, and will be a big blow to many sectors in B.C.’s economy,” said the NDP.
“The Campbell government’s new tax will hit families in the pocketbook when they can least afford it, driving up the cost of dozens of goods and services by an extra seven per cent,” said a statement by the New Democrats.
The restaurant industry, the building industry and consumer groups are lining up against the government. The cost of buying new homes could increase by thousands under a harmonized tax.
The restaurant industry, which employes 173,000 B.C. residents, said the HST will cause a permanent loss of $750 million per year in revenues.
The harmonized sales tax announced will deliver another blow to British Columbia’s struggling tourism industry. The tax on restaurant meals will jump from 5% to 12%, hitting families in the wallet and discouraging international tourists,” said the Canadian Restaurant and Food Services Association.
“This government made a promise less than three months ago to the people of British Columbia that there would be no new taxes,” says Mark von Schellwitz, Vice President Western Canada for the CRFA. “Harmonization will result in a permanent tax shift of hundreds of millions of dollars to our customers.”
” To make matters worse, a 12% tax will likely accelerate the sharp decline in international tourists visiting British Columbia.
“U.S. tourists are already shocked by the 5% GST when they dine out in B.C.,” said von Schellwitz.
“As one of the largest employers in British Columbia, we’re deeply oncerned about the damage the HST will do to restaurant owners, their customers and their employees,” says Garth Whyte, CRFA President and CEO.