Foodosophy – Taxing to Eat


Scanning the news today, I began to wonder how quickly the tide changes from a mood of doom and gloom to sunshine and joy… based on some events that took place in recent days.

News media are happily reporting on the gains made on the TSE today (Thursday) as the Bank of Canada has come out suggesting the recession is over (and noted a 3% rise in economic growth for the Jan-Mar 2009 period), and the Canadian dollar crept up to 92.04 cents U.S.

And today, the BC government has announced they will harmonize the province’s 7% sales tax with the national 5% GST beginning next July. Allegedly done to give the business community a competitive, equal footing with other markets, but to me, I had to look at how it affects me… Mr. Joe Regular. And keeping with the dominant theme of this site, I wondered just how this will affect the power of my dining out dollar.

Brian Bonney, director of provincial affairs with the B.C. and Yukon branch of the Canadian Federation of Independent Business, was interviewed in a Vancouver Sun article and this comment was attributed to him in explaining a very key point for us restaurant fanatics.

“Under the new tax system, the HST will apply to all goods and services to which the GST currently applies, with a few exceptions. So restaurants, for example, will have to start charging 12 per cent on meals when they currently only charge the GST on the meal and the combined PST and GST on alcohol.”

OUCH!

Let’s just hope a corresponding reduction in base prices coincides with this tax hike on restaurant meals.

Weigh in readers…

13 thoughts on “Foodosophy – Taxing to Eat

  1. Yes, ouch! Probably a smaller tip for the serving staff to help offset the cost. I just don’t see them reducing the prices on the menu. Also, buying a new home over $400,000 will be hit too.

  2. Why would the baseline price go down? If everyone across the board going to restaurants is paying HST there is no incentive wrt competing with other restaurants. All there will be is the usual outcry by diners that they won’t eat out as much. Will they really stop going out to eat? There are those justifications touted for harmonizing taxes but I also thought like you of the day-to-day aspect of dining out. I used to live in Nova Scotia where the introduction of HST ten or so years ago reduced our two taxes on goods from 17.7% to 15% HST (but raised taxes on dining from 7% GST to 15% HST!). It’s sad for regular Joes to have to pay more when we’ve been so spoiled with really good dining (base) prices so far.

  3. NO NO NO! This is such a bad idea. How does it help? I’m pretty ticked, from 5% to 12%, more than double the amount of tax.

    I don’t see restaurants voluntarily going, oh hey we need to lower our prices to make up for the extra 7% now so we can retain our customers.

    Servers won’t be happy with the very clear possibility of not receiving the same amount of taxes either.

  4. Hmm I will probably start frequenting Chinese food courts where they dont charge tax on meals. Or will they start doing it now? What about the Chinese barbq places. They dont charge tax out front. Will they also start charging tax? I understand that proprietors have the option of charging GST upfront or not if their sales doesn’t exceed certain level. Now will that be the same for HST? Hmmmm.. for me I think I will reduce my dining out and start cooking food at home using quality local ingredients.

  5. Be taxed to death, that is something I had to accept before I moved here. And to think people in Panama complain about the 5% sales tax!

    At first, it will affect the frequency I will be going out for a meal; however, after a couple of months, I will just resign myself – the way we usually end up doing. For example, do you remember the carbon tax? After the initial uproar, the second “hike” of the tax was a couple of weeks ago and most people didn’t even pay attention to it. (But, then again, last year, gas was over $1.50/L vs. the current ~$1.05/L).

  6. argh….just think, when you go out to dine in larger groups, then we have to pay the mandatory gratuity, plus the HST on top of that……..arghh.

  7. Pingback: Harmonized Sales Tax and Restaurants | I'm Only Here for the Food!

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