Federal budget fails to help restaurants serve Canada’s future

Published March 20, 2019

Restaurants Canada is calling for stronger commitments to help foodservice and hospitality businesses across the country survive and thrive after a discouraging federal budget was unveiled today by Finance Minister Bill Morneau.

While Restaurants Canada commends the Liberal government for responding to ongoing labour shortages with a new, non-taxable Canada Training Benefit, the budget did little else to address concerns raised on behalf of the Canadian foodservice sector.

New Canada Training Benefit

The federal budget has introduced a new program designed to help Canadians plan and pay for skills training, which will be funded to the tune of $1.7 billion over five years, and $586 million per year after that.

The benefit includes a $250-per-year tax credit to help workers pay for training programs, plus access to employment insurance to cover living expenses for up to four weeks away from work, so that they can upgrade skills and acquire new ones all while keeping their existing jobs.

The program would be available to Canadian workers earning between about $10,000 and $150,000 a year.

While the government has framed this program as a way to rectify the “mismatch” between existing skills training programs and what employers need, data has yet to be shared showing which skills are being sought to satisfy job market gaps.

Failure to address alcohol excise tax

The federal budget unfortunately failed to address repeated calls from Restaurants Canada and other industry allies to dismantle the alcohol excise tax, which is set to rise again on April 1 without a vote in Parliament — the third increase in three years.

This annual tax hike, based on the nationwide consumer price index, has not only created a dangerous precedent, but has added exponential cost increases to the operating budgets of licensed foodservice and hospitality businesses across the country.

Industry-wide consensus is that alcohol excise duties are an outdated form of taxation on alcohol manufacturers whose deficiencies are compounded by a series of cascading federal and provincial liquor taxes and mark-ups that drive consumer prices higher.

As the first of many federal and provincial taxes on beverage alcohol, the alcohol excise tax has ensured that Canadian alcohol duties are among the highest in the world.

Restaurants Canada continues to recommend that the excise tax escalator on alcohol be repealed, in the line with the government’s public commitment to accountability, transparency, and fair taxation policies.

Closing the culinary tourism gap

Budget 2019 includes new commitments to boost tourism: The Liberal government is proposing to provide $58.5 million over two years, starting in 2019-20, to the Regional Development Agencies for the creation of a Canadian Experiences Fund.

This new fund would support Canadian businesses and organizations seeking to create, improve or expand tourism-related infrastructure — such as accommodations or local attractions — or new tourism products or experiences. These pan-Canadian investments would focus on five categories: tourism in rural and remote communities, Indigenous tourism, winter tourism, inclusiveness, specifically for the LGBTQ2 community, and farm-to-table tourism, which is also known as culinary tourism.

Restaurants Canada welcomes this proposal as a step in the right direction and looks forward to learning further details. A foodservice stream would greatly strengthen the federal government’s national tourism strategy, as culinary tourism is a key driver of the Canadian brand at home and abroad.

In addition to being the fourth-largest private sector employer in Canada, and the number one employer of Canadian youth, foodservice is also the number one source of tourism jobs. As the voice for foodservice, Restaurants Canada looks forward to joining the Liberal government in the development of its national tourism strategy so that the unique challenges of our industry are addressed.

Looking ahead

With an election looming, Restaurants Canada looks forward to sharing recommendations with the federal government for a sustainable, strong middle class economy that supports all Canadians.

Foodservice is everyone’s business: With nearly 97,000 restaurants, bars and caterers across the country, our industry is part of every community. And when we thrive, so do the communities we serve.

Further information about Budget 2019

Click here to read the full text of the federal budget announcement from Finance Minister Bill Morneau and to access the full Budget 2019 document via the National Post.

If you have any questions or concerns, you can reach out to Lauren van den Berg, Restaurants Canada National Vice President, Government Affairs, at Lauren@restaurantscanada.org or David Lefebvre, Restaurants Canada Vice President, Federal and Quebec, at DLefebvre@restaurantscanada.org.

Kartikey Bhargava

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