KENTVILLE, N.S. — The Canadian Restaurant and Foodservices Association (CRFA) claims that a proposed two-point HST hike in Nova Scotia will cost jobs and investment in the province’s $1.5-billion foodservice industry.
At a finance hearing in Kentville earlier this week, CRFA’s Atlantic Canada vice-president, Luc Erjavec, told Finance Minister Graham Steele that the provincial government should consider alternate ways to generate revenue, like selling the Nova Scotia Liquor Corporation’s retail assets. “Because of inherent flaws in the original HST and competitive pressures from other regions, increasing the HST will mean lower restaurant sales, fewer visitors to the province and fewer job opportunities for Nova Scotians,” Erjavec said in a press release.
In what’s become a familiar refrain in provinces across Canada that are considering bring in a harmonized sales tax, or increasing an existing one, Erjavec believes increasing the HST would worsen an already unfair tax system, because while food sold at restaurants is subject to the tax, similar or identical items sold in grocery stores are not.
“Increasing the HST is polar opposite to actions taken by the 27-member European Union to stimulate economic growth during these tough recessionary times,” says Erjavec. “In France the value added tax on food and alcohol sold in restaurants was reduced by over 70 per cent to stimulate the economy. Any shortfall was recouped by increased restaurant sales and jobs.”
The industry is also concerned by the potential impact on tourism, which may lead travellers to book trips elsewhere.