A restaurant overlooking Victoria鈥檚 Inner Harbour is charging a one per cent fee on food and drink to recover costs associated with sa国际传媒鈥檚 Employer Health Tax.
Rob Chyzowski, owner of Belleville鈥檚 Watering Hole and Diner at 427 Belleville St., said he started charging the fee a few days ago as a way to 鈥渟urvive,鈥� noting the health tax will cost him at least an additional $40,000 a year. 鈥淲e had a number of choices 鈥� we could lay off employees, increase the price of beer and food, or cut portions, or put a fee on,鈥� said Chyzowski.
A Belleville鈥檚 bill now shows the cost of the items purchased along with PST, GST and a one per cent 鈥淏CH.鈥�
Chyzowski said he looked at several ways to absorb the cost for health care being offloaded by the government and found the fee to be the most transparent, equitable and palatable way for patrons.
鈥淚鈥檓 not interested in any more profit,鈥� said Chyzowski. 鈥淚 am just trying to recoup what we have to pay to the government for the health tax. We鈥檙e trying to keep employment and not increase prices.鈥�
Chyzowski said he has kept the fee to a minimum and is trying to pass on the 鈥渁ctual cost.鈥�
鈥淥n $10, it鈥檚 10 cents,鈥� said Chyzowski. So far, patrons have been 鈥済reat鈥� and accepted the fee, he said.
Premiums paid by individuals under the province鈥檚 Medical Services Plan were eliminated on Jan. 1, saving individuals up to $900 a year while families will save up to $1,800.
To make up for the lost revenue, the province introduced an Employer Health Tax of 1.95 per cent for businesses with annual payrolls above $1.5 million. Companies with a payroll under $500,000 are exempt, while those in between pay a reduced rate.
Small businesses have criticized the payroll tax, saying the government simply shifted the burden from individuals to businesses.
Without charging the fee, 鈥淚 would have to lay off people 鈥� there鈥檚 no doubt about it,鈥� said Chyzowski.
Ian Tostenson, president and CEO of the sa国际传媒 Restaurant and Food Services Association, said the cost of the payroll tax to businesses is real and $40,000 to $50,000 for Belleville鈥檚 is 鈥渟ignificant.鈥� Profit margins in the restaurant business are thin and the consumer only has so much capacity, said Tostenson, suggesting others in the industry will likely follow.
鈥淚 think what he鈥檚 trying to say is: 鈥榠nstead of having a wholesale price change, I鈥檓 going to call it what it is,鈥� 鈥� said Tostenson. 鈥淚t鈥檚 not an easy thing to absorb.鈥�
The new tax will not help employment in the restaurant industry, he said.
A one per cent increase will not be that noticeable and is more palatable than an increase in food or drink prices for price-savvy consumers and a much better outcome than having to lay off or restrict the hiring of new staff, said Tostenson.
鈥淚 think most people will accept it, I hope,鈥� he said. 鈥淚 think people will appreciate his straightforward honesty.鈥�
The Canadian Federation of Independent Business has asked the province to better balance the burden between employers and residents, suggesting that otherwise, employers will be footing the entire bill for health-care costs.
