September 29, 2017 8:39 pm
Updated: October 2, 2017 1:21 pm

PST takes a bite out of Sask. restaurants’ bottom line

It's been almost six months since restaurants started adding the six per cent provincial sales tax to their meals, and owners are now paying closer attention than ever to their books. As David Baxter tells us, the industry has the numbers showing the change has taken a bite out of their bottom line.

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It’s been almost six months since Saskatchewan introduced a six per cent provincial sales tax on restaurant meals. Now, restaurant owners like Darren Carter of Beer Bros. Gastropub, are feeling the impact on their bottom line.

“I’ve worked in the restaurant business since I was 14 years old, and this is probably the hardest time it’s ever been,” he said.

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Overall, Carter said his revenue is down five per cent. That amount may seem small, but he said the reduction isn’t helped by costs of overhead, utilities, and other business expenses rising.

“Obviously, with less sales we need less people to operate,” Carter said.

“So we didn’t specifically lay anybody off, but as people are moving on in life and people are going back to school and whatnot there are certainly positions we don’t have anymore, so we are definitely employing less people in the province of Saskatchewan today.”

Overall, Carter said he’s down four or five positions and he’s not alone.

According to Restaurants Canada, 73 per cent of Saskatchewan’s restaurants are considering reducing labour hours. Fifty per cent are considering layoffs as a result of the PST.

Restaurants Canada vice president for Western Canada, Mark von Schellwitz, said their data shows Saskatchewan is lagging behind the other provinces in restaurant revenue.

“It’s no surprise to us that Saskatchewan’s actually lost sales, and is the only jurisdiction in Canada that’s had negative sales growth,” he said.

Other highlights from the June survey include 84 per cent of restaurant owners said the PST will negatively impact their business. Sixty-three per cent said they are considering more promotions to get customers through the door.

Twenty-seven per cent are looking at lowering menu prices. For Carter this is not an option.

“If you look at my line items on my financial statement every cost is up, but I’m not allowed to increase pricing because customers are only expecting so much,” Carter said.

In a statement, the provincial government acknowledged the difficulty facing restaurant owners, but said the change is necessary as they shift away from an “over-reliance” on non-renewable resource revenue.

The province added that in the food and drink sales in the first seven months of the year are up $3.2 million compared to the same time frame in 2016.

Von Schellwitz said that Restaurants Canada has pitched the idea of joining the province in a promotional campaign to encourage residents to eat at locally owned restaurants in an effort to boost revenue. He said the province didn’t seem to have an appetite for that.

The Saskatchewan restaurant industry employs approximately 38,000 people.

© 2017 Global News, a division of Corus Entertainment Inc.

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