Annually the BC Chamber of Commerce produces a policy and positions manual which contains informed opinions and policy statements adopted by Members during the policy sessions at the BC Chamber’s Annual General Meeting held in May.
The Chamber’s policy statements contained in this manual are presented to the provincial and Federal Governments and are individually called to the attention of the Cabinet ministers responsible in order to make it possible for pending government legislation and regulations to reflect the individual opinion of the Members.
Earlier this year, the Fort St John & District Chamber of Commerce sent out a survey asking our members for their input and received an enormous response. It is only with your input that we know what your issues are so that we can lobby on your behalf.
After reviewing the responses from the survey, two issues were identified several times; leveling the playing field for oil and gas and no meal tax for restaurants. We are listening to you! The Fort St John & District Chamber of Commerce formed a policy review committee from our Board of Directors and Staff to write these policies on your behalf. Below are the two policies.
If you have an issue that you would like to see lobbied on your behalf, please don’t hesitate to contact the Chamber office 250.785.6037 or one of our Directors.
A. Leveling the Playing Field for Oil and Gas Companies
British Columbia’s Oil and Gas industry generated the single largest source of revenue to the province in 2008 at $4.09 billion. In fact since 2001, the oil and gas industry has invested almost $38 billion in BC. (Source: www.gov.bc.ca). While the Chamber understands that the Province is attracting new investment through innovative infrastructure and royalty programs, the Oil and Gas Sector, which is centered primarily in the Northeast region of the province feels that the imposed HST is a disincentive to investment and killer of jobs for BC
While we understand that the current provincial government has taken some significant steps to address these concerns, the Chamber feels the Government must ensure taxation and working standards are adhered to by Alberta firms working in BC.
The TILMA agreement was signed by both provinces (Alberta and British Columbia) to level the playing field for business between the provinces, however, it is felt by many businesses that are either directly involved or are suppliers to the Oil and Gas industry that the HST implementation is counterproductive to the goals of TILMA and is in fact detrimental to BC owned companies due to the extra 7% (PST portion of the HST). This proposed taxation hinders the profitability of BC companies compared to Alberta firms, and therefore puts BC businesses at a distinct disadvantage when competing against Alberta firms for the same work.
The Chamber Recommends
That the Provincial Government
1. Implement a more efficient means of policing the tax collection for out of province companies doing business in British Columbia:
· by establishing a very active presence of Commercial Vehicle/Law enforcement on the highways between the Alberta and British Columbia border and,
· by ensuring all work performed in BC is invoiced with the full 12% HST, regardless of the province or state where the company’s offices are located.
That the Federal Government
· by working with the Canadian Revenue Agency to ensure that systems are developed to ensure fair and thorough taxation and collection practices for these companies.
2. Establish a tax incentive in a form of HST rebates to British Columbia businesses to offset the extra 7% impact on profitability
3. Work diligently to fulfill the obligations and commitments promised for leveling the competition between provinces in the TILMA agreement.
B. No Meal Tax for Restaurants
Despite the fact that harmonization of the sales taxes may be good for some businesses other businesses will in fact suffer greatly.
According to the Canadian Restaurant and Food Services Association statistics restaurant sales were already down by 5.6 per cent from 2008.
The HST is going to have a huge impact on restaurants. There is already 5 per cent GST on food and 10 per cent on alcohol in restaurants; adding another 7 per cent meal tax will take a toll on customers’ wallets, employees’ wages and threatens the livelihood of all potential consumers on a regimented budget (i.e. seniors). Restaurant meals are one of the first things that those on a restricted budget can cut back on.
The potential losses for the BC restaurant and food service industry are extensive. Economic analysis indicates that adding 7 per cent meal tax will lead to a 7.5 per cent drop in overall restaurant sales. This translates into a $750 million loss in BC, nearly $50,000 a year for the average restaurant. (Source: News Release December 9, 2009 – New Meal tax will add 7 per cent to your food order: ‘Fed up yet?’). The only way to offset these losses would be to cut staff hours and raise the cost of food served. Competitive food products in grocery stores remain completely tax free. Not exempting the HST from food served will have a profound effect on the province’s unemployment rate and economy as a whole.
80,000 BC restaurant workers are young people under 25 and many depend on their restaurant employment to pay their way through school (Source: BC HST Telephone Survey, November 2009conducted by the Innovative Research Group, Inc.).
Findings from a recent survey commissioned by the CRFA (Canadian Restaurant and Foodservices Association) for the BC restaurant and food service industry demonstrates that 64 per cent of BC consumers agree with the industry and favour exempting food in restaurants from a new meal tax.
The Chamber Recommends
The Chamber recommends that the Provincial Government
1. Make an exception to the Canadian Restaurant and Food Services by exempting restaurant food from HST (not unprecedented as the province has already made HST exceptions to the real estate industry for the HST)
2. Follow through to mitigate the negative impacts of HST on the Food Industry as promised in the September 1st budget speech.
3. Host more public consultations before implementing changes such as the HST