HST vote results spell complications for business

When life taxes you on lemons, you can still make lemonade.

  • Sep. 1, 2011 8:00 a.m.
Geneva Burton rings in an order at the Pasta Factory restaurant during Thursday’s lunch hour. The HST will eventually be coming off restaurant meals.

Geneva Burton rings in an order at the Pasta Factory restaurant during Thursday’s lunch hour. The HST will eventually be coming off restaurant meals.

When life taxes you on lemons, you can still make lemonade.

Okanagan fruit growers and restaurateurs are hoping to make the best of a sour situation, after the harmonized sales tax was defeated in the provincewide referendum and will take 18 months to dismantle.

Joe Sardinha, president of the B.C. Fruit Growers’ Association, said his members were disappointed in the result, as they had been lobbying government to expand the list of PST exemptions for years before harmonizing was on the table.

“Farming has changed a lot. Certainly the list of new imports, new products that are involved have changed,” Sardinha said. “Along came the HST and it was a chance really for the agriculture industry to benefit in receiving the full tax credit for all items purchased relating to farming. It did away with the exemption list.”

The net benefit to farmers was calculated to be $15 to $20 million, he said, adding that the agriculture industry now wants government to broaden PST exemptions.

“We’d like to see all farm-related items exempt from the PST as a condition to returning to the previous system,” Sardinha said.

Dan Darragh is the Okanagan branch chair of the B.C. Restaurant and Food Services Association. He said members had not been as vocal about the HST issue as when the consumer tax was first applied to restaurant meals.

“It’s not a hot topic anymore. It was back when it was introduced,” he said. “We don’t want to sound like we’re gloating, but the taxes will come down on restaurant meals by seven per cent,” he said. “It’s going to make restaurants more affordable for people, for families and it’s going to be good for business, no question.”

But the news is a double-edged sword, Darragh added. Removing the HST means more costs to government — which is ultimately backed by taxpayers. “As a citizen, I’m not happy about that,” he said.

Couple those changes with a tenuous economy, and Darragh said it may spell trouble for restaurants. He said he has noticed less traffic at his Pizzaway location in Kelowna.

“Although the public has adjusted to it, business is still down overall. Especially this summer. In the Okanagan, it has not been a great summer. The tourism industry which feeds the restaurant business has not helped at all this year,” Darragh said. “A year and a half from now, we’ll have to see where the economy’s at and everything else.”

For Penticton restaurateur Duane Jordan, Friday’s news brought up “mixed” feelings. The HST was a better system in terms of a consumer tax, he said, but most voters were blinded by the anger they felt over how it was implemented.

“It’s definitely a step backwards not having the HST, but shame on government,” he said, adding the PST may not prompt more spending. “If you look at the economic times, everybody is holding on to what’s left of their after-tax paycheques right now.”

The owner of both the Pasta Factory and Best Damn Sports Bar also felt government could pick up the pace on reverting back to the PST.

“They had the election and no mention of it (the HST), and within three months it was on the table and in 10 months it was down our throat. Now they want to take 18 months to dismantle it?” he said. “I think it can be done on a lot quicker scale. If they can shove it down our throats that fast, then in 10 months they should be able to reverse the process.”