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Restaurants, small businesses feeling the squeeze of Sask. tax increases

Flip Eatery & Drink expecting to see drop in sales after PST applied to meals. Adrian Raaber / Global News

Come April 1, a six per cent Provincial Sales Tax (PST) will be tacked on to all restaurant meal and snack bills in Saskatchewan.

This, plus the good and services tax (GST) of five per cent, will see a total 11 per cent added to restaurant tabs.

At Flip Eatery in Regina, restaurant co-owner Timothy Martin said it was a shock to see that tax expanded to restaurant meals — a tax burden that’s hard to digest.

“Sales have already been down this year over last year, and I expect we’re going to see sales down further,” Martin said.

He said it’s likely to have an effect on staff and perhaps liquor purchases.

“I’m expecting tips will probably drop down. Our employees won’t make as much money, which is very unfortunate,” Martin said.

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The price of alcohol will also go up on April 1. When the new liquor mark-ups come into effect, beer prices wholesale will increase by 6.8 per cent, coolers by six per cent, wines by 5.3 per cent and four per cent for spirits.

READ MORE: Saskatchewan Budget 2017: sales tax increasing to deal with $685M deficit

Marilyn Braun-Pollon, the Canadian Federation of Independent Business (CFIB) prairie region vice-president, called the tax hikes a step in the wrong direction, and will have significant implications on the restaurant industry.

“This is probably the highest, the biggest tax hike that we’ve seen among Saskatchewan’s history… we have a plan for growth, but the only thing growing is our tax burden,” Braun-Pollon said.

“Restaurants have gone through very hard times and specifically in those areas impacted by oil and gas, that’s a $90 million dollar increase in the cost of doing business,” she added.

New wholesale liquor mark-ups come April 1, 2017. File / Global News

At Last Mountain Distillery in Lumsden, Sask., about 30 per cent of their sales go through the Saskatchewan Liquor and Gaming Authority (SLGA).

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Co-owner Meredith Schmidt said the price tax will undercut their profits and they’ve already decided to lower their prices to absorb some of those costs.

“We feel like there’s only so much that we can ask of our consumers before they start buying our products right?… Now in order to maintain a decent customer price, we’re going to make less on our products,” she said.

The new changes come after the Saskatchewan government increased the PST from five to six per cent on Wednesday.

The province expects that will bring in an additional $242 million.

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