Restaurant, bar owners shocked by retroactive tax
Published Thursday, November 22, 2012 8:23AM EST
The Parti Quebecois budget introduces hikes on cigarettes and alcohol for 2013, but restaurant and bar owners were shocked to learn their share of sin taxes is retroactive and includes bottles they already have in stock.
Barbara Irwin, owner of the Monkland Tavern, is among those wishing she had known in advance.
"Apparently we're supposed to fill out this form and I should have done inventory last night at 3 am, which I had no idea," said Irwin. "It would have been nice for them to give us a little heads up on that."
Irwin found out Wednesday she has to send the government an added tax of 50 cents for every litre of wine and spirits and 17 cents for every litre of beer she's already purchased.
With an extensive inventory of bottles lying in her cellar, that adds up to quite a bit of cash .
"Financially, yeah I'm worried. It can be a large chunk of change."
Like many other upscale restaurants in Montreal, it's not unusual for restaurants to have thousands of bottles of wine and beer in inventory.
"When you're purchasing private import wines you do have to purchase them in bulk because they won't be available down the road," said Irwin. "Especially at this time of year because the SAQ does a lot of specials on alcohol."
With restaurants already coping with increased food costs in recent years, and last year's introduction of mandatory government-tracked receipts, customers can expect prices to rise once again.
But William Gogas of Lafayette restaurant on Ste. Catherine St. says he is very reluctant to do that.
"They're expecting us to increase our prices. I can't increase my prices," said Gogas, worried that he will lose business.
"It's appalling, unfair. I mean I purchased something, three months ago, a year ago, and now I'm going to pay taxes on it?" asked Gogas.
The Canadian Restaurant Association says the retroactive tax is unacceptable.
"It's not a way to look at this industry which is over $10 billion a year, over 200, 000 people that are working in it," said Jean Lefebvre. "We are supposed to be an ally with any government in creating jobs and they bash us with this."
The association plans to pressure the government to remove the retroactive tax.
The new PQ budget requires restaurant and bar owners to pay taxes on bottles they already have in stock (Nov. 21, 2012)