Political parties courting hospitality sector votes in the upcoming federal election are trotting out a mix of conventional policies and novel ideas.
With the Liberal Party of Canada largely campaigning on the party’s record in government and policies they put in place to help employers during the pandemic, the NDP and the Conservative Party of Canada are trying to break out and attract attention.
Take, for example, the Conservatives’ promise to compensate restaurant owners so they can offer dine-in customers a 50% discount on food and non-alcoholic drinks on all Mondays through Wednesdays in one month in 2022, once it is safe to do so. The cost of that promise is expected to be about $1 billion.
The party is also vowing to eliminate the goods and services tax (GST) during December – something that would not only encourage consumer spending at restaurants, but also at retail stores and service businesses.
The problem, restaurant owners say, is that creating policies for a single month or for a few specific days in the week would be an administrative nightmare.
“You can’t say that you’re going to remove the GST for one month and then re-implement it because of the amount of energy that would be required, and the people needed to work it out – from the menus to the accounting,” Vij’s Restaurant co-owner Vikram Vij told BIV.
“It’s better to just say, ‘Hey, we’re reducing the GST for one year, and instead of 5%, it will be 4.8%.”
That 0.2 percentage-point reduction over the year would be equivalent to one month with no GST, but Vij said it would be easier to manage.
He added that the 50% discount on food and non-alcoholic drinks for three days of the week would similarly be an accounting headache.
Glowbal Restaurant Group owner Emad Yacoub agreed. He called the Monday-through-Wednesday discounts promise “stupid.”
Yacoub said the policy would be a challenge for small-restaurant owners to navigate, particularly if they have basic point-of-sale systems.
The policy would help some struggling restaurant owners stave off an inevitable closure, but that would also not be healthy for the industry as a whole, Yacoub said.
Vij and Yacoub like the Conservatives’ promise to halt annual increases to the federal alcohol tax and the NDP’s promise to cap credit-card merchant fees at 1%. But both longtime restaurateurs said they doubted that the NDP would be able to keep that promise.
The Conservatives’ platform is silent on capping credit-card merchant fees. The Liberal government has been consulting industry, with the aim, according to its 2021 budget, of “reducing credit-card transaction fees.”
British Columbia Restaurant & Foodservices Association CEO Ian Tostenson said his organization has long wrestled with the issue but has come away with little progress.
“The complexity of the system needs to be unravelled, so people can understand it,” Tostenson said, adding that consumer-reward programs and the wide range of fees that credit card companies charge for them makes it a thorny issue.
“We were trying to get to a point where there would be a flat rate, so you’d pay 1.7%, and that’s your charge on every single card, and we could never get there because they just had all these excuses. So just to simplify the process would be a good starting point.”
Vij, Yacoub and Tostenson all agreed that the biggest issue facing restaurant owners is the lack of available workers and that increased immigration or looser visa-entry policies would be a big help.
B.C.’s minimum wage rose 4.1% on June 1 to $15.20 – the highest rate among provinces and second only to Nunavut in Canada.
Simply paying more is not the issue, Yacoub said.
“The guy that was making $20 an hour, we offer him $30 an hour,” he said. “It’s going to get to a point where it’s going to crack, and nobody is going to be able to afford anybody.”
Yacoub has been waiting in vain to hear a party promise to change government policy around business lunches to make it either easier for customers to deduct those costs on their taxes or for them to be able to deduct a higher percentage than the 50% customarily allowed.
“In the ’80s, people were allowed to claim their meals as business lunches,” he said. “Then, the government cut [the tax-deduction limit] to 50%, and I think they are very tough on what meals qualify.” •