B.C. budget 2023: A missed opportunity to address top industry concerns of rising business inflation costs and labour shortages

Restaurants Canada is pleased to see B.C.’s provincial budget includes no business income tax increases, but rather offers a number of measures to address affordability challenges for British Columbians. Unfortunately, it does little to help struggling foodservice businesses reduce rising inflationary costs or address labour shortages.

“Our members have struggled to return to profitability and pay off pandemic-related debts, the price of food is up 15 per cent, labour costs are up by 12 per cent, and the labour shortage has continued to cause most foodservice businesses to operate at an average of 80 per cent capacity,” said Mark von Schellwitz, Vice-President, Western Canada. “We’ve found that for the most part menu inflation has only been running at six per cent, meaning restaurant operators are absorbing most of these increased costs to avoid passing them along to value-conscious guests” added von Schellwitz.

Restaurants Canada had hoped to see more support in the province’s 2023 budget to reduce inflated business expenses in light of recent policies implemented that have continued to increase the cost of doing business, including:

• the employer health tax;
• five paid days of sick leave;
• the implementation of another new statutory holiday and;
• several years of minimum wage increases that were well above inflation

“The B.C. government needs to be part of the solution instead of part of the problem when it comes to reducing financial pressures on businesses. This budget does not go far enough to address rising business costs,” said Mark von Schellwitz.

B.C.’s 2023 provincial budget failed to offer solutions that aim to tackle the province’s current labour shortages, which have had an immense impact on local businesses. While we appreciate the $480 million commitment to support the province’s ‘Future Ready’ programs which include new funding to assist employers in implementing practical solutions to current market challenges, the commitment does not specifically address the fact that the foodservice industry is suffering from the most acute labour shortages of any sector. With nearly 26,700 job vacancies in the province’s foodservice and hospitality sector, 44 per cent above pre-pandemic levels, providing sector-specific labour shortage support is critical to prevent shortages from becoming a long-term crisis.

“With our sector having the highest job vacancy rate of 10.5 per cent, nearly double the industrial average, we’ve seen owners and operators implement major changes to their businesses in response to the crisis; 77 per cent have increased wages, 72 per cent have had to increase hours worked by staff to cover gaps in schedules, and another 64 per cent have had to reduce hours of operations due to a lack of staff. We are now calling on the B.C. Government for additional help” added von Schellwitz.

While B.C.’s budget does address some affordability challenges it does not do enough to help with the challenges of doing business in the province. Restaurants Canada was looking to see more sector-specific support for the foodservice sector including:

• Additional provincial supports to help alleviate B.C.’s foodservice sector labour shortage including a dedicated tourism and hospitality PNP stream.
• Specific hospitality industry measures to help our fragile industry recover from the pandemic.
• An increase of the employer’s tax payroll exemption level from $500,000 to $1.5 million.
• Encouraging B.C. municipalities to adopt consistent Single-Use Item (SUI) standards across jurisdictions and harmonize waste management practices to avoid implementing a patchwork of different environmental packaging bylaws that increase red tape and add to the operating costs of restaurateurs.

We are encouraged to see inflation as a main theme in the 2023 B.C. budget by placing more dollars back into the hands of British Columbians. However, Restaurants Canada will continue to strongly advocate for meaningful sector-specific support and solutions that work to alleviate financial pressures, red tape and address our industry’s labour crisis. We look forward to future opportunities to work alongside the B.C. Government to keep local businesses, and specifically those within foodservice alive.