North Battleford and area businesses will feel the crunch with the province's budget announcement that PST will not only increase to six per cent, but it also will now be applied to more purchases.
The Provincial Sales Tax is payable by businesses and individuals who purchase taxable goods or services in Saskatchewan, or who import taxable goods or services for consumption or use in the province. The increase from five per cent to six per cent will likely have some impact according to local business owners.
At Porta Bella Restaurant in North Battleford, owner Stacey Caldwell is not overly concerned that PST will increase starting April 1, since it is only a small top up, however she is upset more items will be subject to PST, including meals at restaurants, which were previously exempt.
"I'm not very happy," she said. "Time will tell. I'm still digesting it all.”
Caldwell said she is still looking for more details to find out what exactly is affected now that the PST will be charged to more consumer products.
She said if alcohol is also no longer exempt from PST, people will need to pay a total of 21 per cent in tax for a drink at a restaurant – a 10 per cent liquor consumption tax and five per cent for GST, plus now an extra six per cent for PST.
"I'm concerned about it all," Caldwell said. "It's going to be very harmful to restaurants, I think, until people get used to it.”
Battlefords Chamber of Commerce president Warren Williams worries people in the Battlefords living near the border will decide to go to Alberta to shop and save a little on their purchases. Battlefords businesses will lose that revenue.
"Obviously, it’s a concern to businesses in our community here being close to the Alberta border specifically, where they don’t have a PST," Williams said. "The rise of the PST is certainly going to have an impact there."
He added costs will go up to purchase many items - whether it’s food in restaurants, clothing, or tobacco and liquor.
“Expanding (the PST) now onto children’s clothing, or restaurant meals is certainly going to impact businesses here,” he added.
He pointed out restaurant owners may fear people won’t eat out as much, although the numbers aren’t available to show definitively how this could impact consumer behaviour.
When reviewing the budget, Williams said he did see a couple of good points, however – incremental drops by 0.5 per cent in 2017 and again in 2019, for the corporate income tax rate, and for the personal income tax rates, respectively, which he believes are both positive changes.
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