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DinersBԪַ health tax not catching on in B.C., restaurant group says

Small businesses look for options to cover employer health tax
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Pubs and restaurants in B.C. are among the businesses looking for ways to cover the provinceBԪַs new employer health tax. (Responsible Service B.C.)

One B.C. restaurant owner is being applauded for his transparency for covering part of the employer health tax with an up-front charge on customer bills, but the idea isnBԪַt catching on yet.

As B.C. small businesses deal with the cost of the new tax on the portion of their payroll exceeding $500,000, they have to look at strategies to cover another cost, along with rising minimum wage, property tax and supplier increases.

In the restaurant business, with part-time staff and narrow profit margins, the choices came down to four, says Rob Chyzowski, owner of BellevilleBԪַs Watering Hole and Diner in downtown Victoria. With the new health tax costing him an estimated $40,000 a year, he could lay off staff, increase the price of food and beer, reduce serving sizes or add a new charge to the bill.

Chyzowski opted for the latter, a one-per-cent charge on customer bills labelled BԪַBCHBԪַ to represent the additional cost. He says most customers have accepted it.

Ian Tostenson, president of the B.C. Restaurant and Food Services Association, says he hasnBԪַt heard of any other restaurant or pub going the same route.

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BԪַThere is a concern about the cost of the health tax, no question about it,BԪַ Tostenson said Friday. BԪַBut there has been nobody else whoBԪַs come out and said, BԪַIBԪַm doing this.BԪַ So I think the industry is probably looking at, will it work, and maybe if it works, they should do the same thing.BԪַ

Another Vancouver Island restaurant owner, Calen McNeil, is looking at his options as his Big Wheel Burgers chain has grown to four restaurants. He pays above minimum wage and health benefits to keep employees in a tight market for skilled workers, but he says the new payroll tax is pushing him below the break-even point.

BԪַIn effect I have to borrow the money to pay the tax,BԪַ McNeil told radio station CKNW this week.

His latest burger restaurant opened in Nanaimo, but for further expansion, heBԪַs looking outside B.C.

The must be paid quarterly by most larger companies, at a rate of 2.925 per cent on payroll amounts between $500,000 and $1.5 million. Above that, the tax is charged at 1.95 per cent, applying to BԪַall remunerationBԪַ including benefits paid to employees.

The B.C. government has an employer health tax so business owners can estimate their payroll and meet the quarterly deadlines to pay it. That system earned the B.C. government a BԪַpaperweight awardBԪַ from the Canadian Federation of Independent Business this week for imposing complicated regulations on business.



tfletcher@blackpress.ca

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