REGINA, March 23, 2023 (GLOBE NEWSWIRE) -- Yesterday, Saskatchewan tabled its 2023-24 budget, which was primarily focused on debt reduction and improving the province's overall fiscal position with a $1.0 billion surplus. Restaurants Canada was encouraged to learn the budget contained no new taxes or tax increases, which provides the industry with some stability. Unfortunately, it does not provide any substantial cost relief for the struggling foodservice industry. The budget was also a missed opportunity for the provincial government to address a number of operational challenges impacting Saskatchewan's beleaguered restaurant sector.
"Not even a year on from the end of pandemic-related restrictions, Saskatchewan's restaurant sector is still struggling to recover from its lasting impact. The combination of disappointing revenues, skyrocketing operating expenses, and acute labour shortages are making it incredibly challenging for foodservice operators to recover financially," said Jennifer Henshaw, Vice President, Prairies and the North, Restaurants Canada. "The 2023-24 budget needed to send the right signals to the province's foodservice sector, and the greater business community, that Saskatchewan is ready to support a strong economic recovery for some of the hardest hit industries. While the budget certainly moved the fiscal needle in the right direction without any tax hikes or new taxes, it missed the mark by failing to adopt Restaurants Canada's impactful, common sense recommendations to help our industry," added Henshaw.
The Government of Saskatchewan is also proceeding with its plans, previously announced in August 2022, to increase the reduced small business tax rate of 0 per cent, to 1 per cent on July 1, 2023 and another increase to 2 per cent scheduled to take effect on July 1, 2024.
"It's disappointing that the province is moving forward with its planned restoration of the small business corporate income tax rate, which will be increased to one per cent in 4 months, and then 2 per cent in the summer of 2024. This increase will impact some of our smallest restaurant operators at a time when they can least afford it," stated Henshaw.
In our 2023-24 pre-budget submission, Restaurants Canada and Saskatchewan-based restaurateurs recommended that the government include some key broad-based cost relief measures in the budget, specifically:
A recent Restaurants Canada survey revealed that seventy-five per cent of table-service restaurants are still in debt due to the loss in business and rising costs during the pandemic. This compares to 66 per cent of 'all other foodservice,' such as bars, and 51 per cent of quick-service restaurants. Of those still in debt, nearly 80 per cent of independent table-service restaurants owe between $50,000 and $500,000 - an enormous financial burden. Meanwhile, 20 per cent of chain table-service restaurants have incurred more than $1 million in debt, with many operating between 5 and 25 locations. The survey also revealed that one in four independent table-service restaurants said their business is not expected to recover from the debt incurred due to the pandemic unless current conditions change
Restaurants Canada will continue to advocate strongly for effective solutions to alleviate financial pressures, reduce red tape and address our industry's labour crisis. Restaurants Canada looks forward to continuing to work alongside the Saskatchewan government to keep local businesses, and specifically those within foodservice, alive.
About Restaurants Canada
Restaurants Canada is a national, not-for-profit member-based trade association advancing the potential of Canada's diverse and dynamic foodservice industry through member programs, research, advocacy, resources and events. Saskatchewan's foodservice sector is a $2.6 billion industry, with $905 million in food and beverage products purchased every year. As the third-largest private-sector employer, Saskatchewan's foodservice directly employs 32,100 people and indirectly supports another 7,300 jobs in related industries. www.restaurantscanada.org