Ontario Budget – Some positive measures for restaurants, but more to do. 

While today’s Ontario Budget contains some measures that will be positive for the restaurant industry, our advocacy continues on core priorities like: 

• workforce stability 
• alcohol pricing that is fair and that matches the lowest priced provinces in Canada 
• PST relief on restaurant meals 
• Help for businesses on issues related to public safety and security. 

Small Business Tax Rate Reduction 

The Budget announced a reduction in the Ontario small business tax rate from 3.2% to 2.2% on the first $500,000 of taxable income. The maximum annual benefit will be $5,000. 

Capital Cost Deductions  

The Budget outlines a number of categories to allow businesses to accelerate the income tax deduction for the cost of depreciable assets, in parallel with changes announced by the federal government. Of note are the following: 

• 100% write-offs for certain clean technology assets and zero-emission vehicles; 
• 100% write-offs for productivity-enhancing assets;  
• Accelerated first-year deductions of up to three times the regular amount for most other depreciable assets. 

Rural Transit 

The government is investing an additional $15 million over three years in the Ontario Transit Investment Fund to support the startup and growth of transit services in rural communities. Eligible projects include new and expanded bus services, on-demand shared rides and door-to-door transportation. For some member restaurants, this investment will help to provide needed transit services for employees to get to and from work. 

Post Secondary Funding 

Restaurants Canada has been active in seeking support for post-secondary culinary and hospitality training programs. The Budget includes additional funding of $6.4 billion for post-secondary education over four years, along with a 30% increase in operating funding. We will be examining the details of this funding plan and engaging the government to prioritize culinary and hospitality training programs. 

LCBO Alcohol Pricing 

The Budget does not provide any greater clarity about the impact on restaurants of the new LCBO pricing model that comes into effect on April 1. As members know, Restaurants Canada has been in active discussions with the government and LCBO for the past several months advocating for a return to the 15% licensee wholesale discount rate which reverted to 10% in January. We have been advised that restaurants will be better off under the new model (“at or above the level of the previous 10% wholesale discount”), but we have yet to see any details to support that claim. We have heard that ready-to-drink products, sold largely by grocery and convenience stores, will be discounted by as much as 16.9%, whereas restaurant products like wine and spirits are more likely to be in the 11% to 12% range. Even then, we understand that lower priced wines may be discounted, but the cost of higher priced wines may be increasing. 

Beer Pricing by Major Brewers 

The Budget contains no reference to addressing the unfairness for restaurants on beer pricing by major brewers, with grocery and convenience stores receiving preferential treatment in the range 30% over restaurants in Ontario. This is an issue we are continuing to push aggressively with the government, building on recent positive discussions with the Premier who is very sympathetic to correcting this unfairness to our sector.