Tax hikes could force St. John's restaurants to close, owners say

The Restaurant Association of Newfoundland and Labrador says tax increases in the recent St. John's budget will be hugely damaging, and could drive some restaurants out of business.

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"Everybody is outraged. We're in shock that there was so little foresight," said Andrea Maunder, the chair of the association and owner of Bacalao restaurant on Lemarchant Road.

"It seems like they were looking for a source of revenue for St. John's and maybe we're an easy grab, I don't know," she said.

In its recent budget, the City of St. John's increased business property taxes by 14.3 per cent on average.

Maunder says that life is hard enough for restaurant owners in St. John's in the present economic downturn.

In the past year, well-known restaurants such as Bianca's and The Club have had to shut down.

Business slow for this time of year

While the busy Christmas season is usually what sees restaurants through the slow post-December months, Maunder said restaurants in the city are seeing 70 to 80 per cent of the business they usually see at this time of year.  

"When there are tightened belts, the public are going to eat out less," she said.

Maunder said less business will impact the amount of product restaurants order from their suppliers, and force owners to employ fewer staff.

A tax increase, Maunder said, might push more establishments over the brink.

"There may be people who just look at it and say, 'I'm not going to be able to do this. I'm going to have to close my doors'," she said, adding that restaurant closures will hurt the tourism industry.

"We're a culinary destination now, we weren't 15 or 20 years ago. We have more and more people now coming for the food," she said.

"If they are coming and they are seeing restaurants boarded up, those aren't the images they saw on TV ads."