Cutting the tax credit on tips will leave restaurants in the lurch

MONTREAL, March 20, 2015 /CNW/ - In his bid to balance the government budget, Fiscal Commission Chair Luc Godbout recommends lowering the tax credit on tips declared from 75 to 50 per cent – a move that will hurt Quebec's restaurant industry and its employees.

"It's important to understand the tax credit on tips declared is not a subsidy to the restaurant industry," says Jean Lefebvre, Restaurants Canada Vice President Quebec. "To be completely fair, restaurateurs should not have to pay any tax on revenue – such as employee tips – that they have no access to."

The Government of Quebec introduced a tax credit of 90 per cent in 1998 to reimburse restaurateurs for the taxes they paid on employee tips. This credit was lowered to 75 per cent in 2003, and is now facing the threat of reduction again.

"Cutting the tax credit on tips declared would cost the average restaurant another $2,500 a year, which is completely unaffordable," says Lefebvre.  "Mr. Godbout wants to help the government balance its budget at the expense of restaurants, which are already struggling under intense cost pressures."

The province's restaurants directly employ nearly 270,000 Quebecers, of which one in five is under the age of 25. The restaurant industry is the number one source of first-time jobs. 

"Our members want to partner with the government to boost job and economic growth," says Lefebvre. "We hope the government rejects such measures that will force many restaurants to close their doors and cut jobs."

Restaurants Canada (formerly the Canadian Restaurant and Foodservices Association) is a national association comprising 30,000 businesses in every segment of the foodservice industry, including restaurants, bars, caterers, institutions and their suppliers. Through advocacy, research, and member programs and services, Restaurants Canada is dedicated to helping its members in every community grow and prosper.

SOURCE Restaurants Canada

For further information: Media Contact: Jean Lefebvre at 514-448-2154 or 514-777-8438 (cell) or jlefebvre@restaurantscanada.org; Prasanthi Vasanthakumar at media@restaurantscanada.org.

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