Further to the tabling of the Quebec budget earlier today, Restaurants Canada congratulates the government on lowering payroll taxes through a gradual reduction in contributions to the health services fund. Until January 1, 2022, the health services contribution rate applicable to an employer with a total payroll of $1 million or less per year will be gradually reduced. This represents a reduction of close to 40% compared with the rate before June 2014. This could save owners and operators with a $1 million payroll up to $10,000.
“We are very pleased to see this measure included in today’s budget, said David Lefebvre, Vice President, Federal and Quebec at Restaurants Canada. Reducing payroll taxes, which has an impact on all our members, was our priority. With the increase in the minimum wage coming into effect on May 1and new labour standards that will cost small businesses $350 million per year, this budget measure is very welcome.”
In addition, the gradual reduction in the corporate tax rate for SMEs from 8% to 4%, with 1% effective immediately, is a positive step forward. This will reduce the tax burden by approximately $275 million a year over five years. “Combined, these two initiatives will give a break to operators who face ever increasing taxes, fees and regulatory obligations,” adds Lefebvre.
The sums invested in employee training are also good news, and we hope the desire to help with the hiring of immigrant workers will provide real opportunities for our industry. In this environment of labour shortages, we asked for strong measures to shape and improve Quebec’s workforce, and the government appears to have listened.
In total, five of Restaurants Canada’s main concerns are addressed in Quebec’s 2018-2019 budget.
“Our industry works well when the economy is strong and growing. Given the current environment, we are happy that the issues of labour shortages and payroll taxes have been taken into consideration in this budget. The sums announced for tourism are also encouraging. We will continue to work to develop the restaurant industry and support it in its role as an economic driver in our cities and regions,” notes Lefebvre.
On a disappointing note, the Quebec government chose not to reduce alcohol taxes. However, the alcohol licence reform proposed under Bill 170, tabled last February, gives us hope that we will get reasonable administrative and financial relief in the mid-term for licensed establishments.
We also caution the government regarding the tax measures on income splitting for people working in small businesses, as we want to avoid the fiasco that occurred last year at the federal level. The Finance Minister is talking about harmonizing measures, and we will follow this closely to make sure this does not lead to more stringent policies.
Quebec’s restaurant industry generates annual sales of $16 billion, representing 3.8% of the province’s GDP, and employs 286,600 Quebecers.
Restaurants Canada is a growing community of 30,000 foodservice businesses, including restaurants, bars, caterers, institutions and suppliers. We connect our members from coast to coast, through services, research and advocacy for a strong and vibrant restaurant industry.
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For questions or interview, please contact: David Lefebvre, Vice President, Federal & Quebec, 613-325-3298 or dlefebvre@restaurantscanada.org, or Andrew Speller, Communications Specialist, 1-800-387-5649, ext. 4254 or media@restaurantscanada.org.
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