1. Newfoundland and Labrador’s Foodservice Industry
Creating Jobs and Economic Growth Throughout the Province
Independent Tax Review Presentation
May 2018

2. Number of Commercial Foodservice Establishments
Newfoundland and Labrador’s Restaurant Industry
Number of Commercial Foodservice Establishments
$1.1 billion in sales
(Commercial + non-commercial)
1,184 establishments
Source: Restaurants Canada and Statistics Canada

3. 6.8% of the province’s workforce
One of Newfoundland and Labrador’s Largest Employers
15,300 direct jobs
6.8% of the province’s workforce
5,800 youth jobs
Source: Restaurants Canada and Statistics Canada

4. Canada 5.3% 2017 Provincial Foodservice Sales 2.2% 7.7% 2.4% 3.3%
-0.6%
6.9%
5.6%
5.9%
1.1%
3.0%
Source: Statistics Canada and Restaurants Canada

5. Financial Operating Ratios – Newfoundland and Labrador (as a percentage of operating revenue)
Source: Restaurants Canada and Statistics Canada

6. Total Foodservice Sales Newfoundland and Labrador
(year-over-year nominal change)
Source: Statistics Canada

7. Basic Personal Tax Exemptions
January 2018
Newfoundland has among the lowest Personal Exemption in Canada
Decreases disposable income and stifles sales
Penalizes low income workers putting pressure on wages

8. Newfoundland restaurant owners are forced to pay to collect government tax:
The increased use of electronic payments means restaurateurs are forced to pay credit card fees to collect government HST.
Assuming 50% of sales use credit cards this equates to over $2 million per year in Newfoundland and Labrador.
A mid-sized, upscale restaurant will pay over $50,000 in credit card fees.
This issue is exacerbated when restaurateurs are also forced to pay bank fees when collecting employee tips.

9. Is this fair? Credit Card companies make more than the restaurant owner on a $50 meal.
Source: Statistics Canada and Restaurants Canada

10. Newfoundland Liquor Taxes are Extremely High
Example: Case of 24 domestic beer:
Canadian Beer Taxes are 5 times higher than the US $20.31 vs $4.12
Newfoundland beer taxes are 20% higher than Canadian average $23.96 vs $20.31

11. Newfoundland Liquor Licensees can’t purchase wholesale from NLC
Despite purchasing in bulk, licensees pay full retail price for alcohol
Up until 2006 licensees actually paid 12% more for alcohol
Difficult to provide competitive priced products to customers, declining market share
Does not recognize the added value of the industry
Agency Stores who in many instances buy less receive wholesale pricing
Other Atlantic Provinces provide discounts
PEI Wholesale Pricing Program
13% wine
10% spirits
10% draught
10% ready to drink
$4 reduction in 24’s of beer for licensees
Nova Scotia Wholesale Pricing Program
10% wine

12. A Restaurants Canada survey of licensees said:
72%
Said the cost of beer, wine and spirits has a negative impact on their business
97%
Want to see wholesale pricing
82%
Said their customers complain about the high cost of alcoholic drinks
78%
Said they were dissatisfied with the cost of alcohol
Said current liquor laws have a negative impact on profitability
30%
Said they receive value from their local liquor/beer supplier

13. The Payroll Tax is regressive and a tax on jobs
The threshold increase has helped but still impacts many restaurants.
The tax does not recognize profitability
Full service restaurant profit is only 1.6% .
Restaurant industry is extremely restaurant labour intensive.
Most multi-unit holders are negatively impacted.
Tax on growth.

14. Questions