Thank you, Mr. Chair.
The Canadian Restaurant and Foodservices Association represents the nation's $61-billion restaurant industry, one of the largest industries in the country. We're pleased to have the opportunity to put forth some recommendations that will advance the committee’s goals of high levels of job growth and business investment, with a view to ensuring a shared prosperity and a high standard of living for all.
We have many recommendations. For example, we favour eliminating the $40 million in credit card fees on sales taxes, but I'm just going to talk about two recommendations.
First, our overarching recommendation is to establish a private and public sector task force to study the central role of restaurants in Canada and to make recommendations to promote and grow this industry. This recommendation would have limited cost implications, but would create an opportunity to break down the agriculture and tourism silos in Canada and unleash the potential of one of Canada’s most important industries.
Our second recommendation concerns reducing the burden of profit-insensitive, job-killing payroll taxes, which has always been a priority for the labour intensive restaurant businesses.
Our proposal is for the introduction of a $2,000-a-year basic exemption, YBE, modelled after the YBE in the Canada Pension Plan, as the most efficient and effective way to deliver payroll tax relief to the groups most affected—the entry level workers and labour intensive businesses. It's estimated that a $2,000 YBE would reduce EI revenue by approximately $1.4 billion per year.
With respect to the restaurant industry task force, during the recent federal election, food and agriculture policy received a great deal of attention from all political parties. Although the economic and employment contributions of restaurants exceed those of agriculture and all supplier groups, the restaurant industry is treated as secondary in food policy discussions.
Similarly, over 50% of the jobs in the tourism industry, by far the largest component of tourism jobs, are restaurant jobs. Yet the restaurant industry is an afterthought in Canada’s tourism strategy. Canada’s restaurant and food service industry is one of the largest industries in Canada. We employ more than a million Canadians, making our industry one of Canada's largest private sector employers. The industry’s workforce represents 6.4% of the country’s employment, more people than agriculture, forestry, automotive manufacturing, mining, and oil and gas extraction combined. An additional 250,000 Canadians are indirectly employed by the industry as suppliers, distributors, and consultants.
A Decima poll commissioned by Kraft Foodservice Canada showed that the industry is the number one source of first jobs for Canadians, and that 80% of Canadians recognize restaurants as a vital source of employment.
Every $1 million in restaurant sales creates nearly 27 jobs, making our industry one of the top four job creators in Canada. The diverse nature of our industry means the benefits are felt in every community, not just in major centres.
The industry is much more than a huge contributor to the Canadian economy and a major job creator. It is at the heart of what Canada is about—food, youth, multiculturalism, agriculture, health, and community.
We're faced with some daunting challenges. The high Canadian dollar relative to the U.S. dollar and weak economic conditions internationally have discouraged visitors from coming to Canada and have significantly reduced tourism. A full 74% of the respondents to our restaurant outlook survey indicated that rising food costs are having a negative impact on their business; two-thirds said that rising labour costs are having a negative impact; and one of four operators said that they are struggling to find qualified labour. Given the competitive nature of the business and the price sensitivity of restaurant consumers, it's difficult for operators to pass on higher costs.
In recent years, the federal government has focused resources on capital- and resource-based sectors, which are a fraction the size of the food service industry, together with the agriculture and tourism sectors. We're not asking for grants or handouts. We're just saying the government should recognize the significant social and economic contributions of the food service industry and its growth potential. Since food service is a touchstone for so many government priorities, it's important that the government take a more holistic approach to this industry, beginning with the establishment of a task force to study it and make concrete recommendations to promote and grow Canada's restaurant and food service industry.
Second, on payroll taxes, we want you to consider--