Restaurant and bar owners unfairly targeted by government
FREDERICTON - The province is imposing millions of dollars
in new costs on bar and restaurant owners, and clawing back an important
revenue stream, even though many bars and restaurants are struggling to
survive during the economic downturn.
The provincial government announced $1.2 million in new fees for licensed
restaurants and bars on Feb. 2. In addition, the government has already clawed
back VLT commissions and removed a large number of machines from small
operators to subsidize racetracks and a new casino.
These changes, along with the increase in minimum wage last week, add up
to more than $11 million in new costs, and millions of dollars in lost
"This is the worst possible time for government to be increasing costs
for restaurant and bar owners," says Luc Erjavec, Vice President Atlantic
Canada with the Canadian Restaurant and Foodservices Association (CRFA). "Many
restaurant and bar owners in New Brunswick are barely hanging on in such a
tough economy, and this latest move by government will push some of them right
over the edge."
The average restaurant in New Brunswick has seen its pre-tax profits
shrink to just 3.1 per cent of sales. The new costs in 2009 will reduce their
profit margin to just 2 per cent.
The 1,700 restaurants and bars in New Brunswick employ 23,700 people, or
6.5 per cent of the province's workforce. The industry has shed 1,300 jobs
since 2006, due to declining sales and rising costs.
The fee hikes announced on Feb. 2 include: $225 for a restaurant license
that used to cost $85; $850 for a lounge license, up from $575; and a new VLT
license fee of $1,200 a year.
"Our industry isn't asking for bail-outs or subsidies. All we're asking
for is government policies that encourage restaurant and bar owners to
succeed, expand, and create more opportunities for New Brunswickers," says
Erjavec. "Unfortunately, the province is doing exactly the opposite and will
end up driving more operators out of business."