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Industry rep sees impact of abolished HST in local restaurant industry

April 11, 2013 - 5:57 PM

Less than two weeks after the HST was abolished in B.C., an industry rep says it's impacting some restaurants but not others.

B.C. returned to separate taxation systems - GST and PST - on April 1.

Restaurants were of the many businesses affected by the change as food was taxed under HST, but is exempt from the seven per cent PST.

Chair of the Kamloops region's chapter of B.C. Restaurant and Foodservices Association, Bryce Herman, said quick service restaurants such as fast-food restaurants are seeing the impact.

"What's happening is it's very noticeable on a small ticket," Herman said. "If you're driving through and you're grabbing your favourite bagel and coffee, you're going to notice it right away."

Herman said restaurants like McDonald's and Tim Hortons have seen an increase in customers as their price has dropped slightly with the seven per cent reduction in taxes on food and beverages.

"It's far more noticeable," Herman said. "That's why I think the guys I've talked to in the (quick service locations) have seen that change more than anyone."

Higher-end restaurants, on the other hand, aren't seeing the same change, said Herman.

Most people don't notice the minimal dollar amounts when they're already spending a fair amount on dinner.

And despite a seven per cent reduction in taxation on food, the tax on alcohol has gone up three per cent.

"At the end of the day the impact on the bill is minimal," Herman said. "It's increased on one side and lowered on another."

He said it's still hard to tell this early how the switch will affect local restaurants in the long run, but admitted taxation only plays a small part in the minds of consumers.

"It wasn't like all of a sudden people shut the door."

To contact a reporter for this story, email: jwallace@infotelnews.ca or call (250) 319-7494.

News from © InfoTel News Ltd, 2013
InfoTel News Ltd

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