Thank you for the opportunity to be here today to provide comment on the budget on behalf of Canada's $75-billion restaurant industry.
Restaurants Canada is a national association, representing a growing community of 30,000 businesses in every segment of food service, including restaurants, bars, caterers, full and quick-service restaurants, and food service management companies. With 94,000 locations and 18 million customers every day, the restaurant industry has a more personal, direct, and frequent connection with Canadians than just about any other industry. The restaurant and food service industry is one of the largest private sector employers in the country, with 1.2 million employees. We are most proud of the first job opportunities we provide for youth, which is more than any other industry in Canada. Restaurants also open doors for many new Canadians as they seek to establish themselves in a new country and to gain work experience and contacts in the Canadian job market.
With regard to the budget, some of the things that we like include the following:
First, there is the renewed youth employment strategy, with additional funding for vulnerable youth and for an expanded Canada summer jobs program. We are grateful for your commitment to youth and youth employment, and we look forward to working with your government on a youth employment growth strategy.
Second, we see $50 million in additional funding to promote Canada as a tourist destination. Restaurants account for 27% of total tourism jobs, the largest of any sector. Dining out is something that almost every tourist will do when they are here in Canada. Our cuisine can compete with the best in the world. We need to promote Canada as a culinary destination.
Third is a commitment to review spending and the tax system to make it more efficient and effective. Our members find the tax system overly complex, taking valuable time away from running their businesses. A more streamlined system, with an objective of more broad-based tax reduction, is something that we support.
Fourth are the tax breaks that will lead to an increase in disposable income for the middle class, and hopefully more spending in restaurants.
Fifth is higher permanent resident admissions, with more funding to process permanent residents and for settlement programs. Our diverse multicultural industry was built and continues to built by immigrants.
On the flip side, Restaurants Canada is very disappointed about the deferment of the small business tax reduction beyond 2016. This was one of the government election commitments that was strongly supported by restaurants. In fact, all parties committed to reduce the small business tax rate to 9% by 2019. While the rate will decrease this year from 11% to 10.5%, future cuts remain up in the air.
We were even more disappointed when the government's election commitment to implement an EI youth hires initiative was missing from the budget. Employers of youth were promised an EI premium holiday from payroll costs for youth hires beginning in 2016. Recognizing that the youth unemployment rate is more than double the unemployment rate for Canadians over the age of 25, we think that payroll tax reduction for youth employers should be the cornerstone of any youth employment growth strategy.
CPP enhancements were also part of the government's election platform and were touched on in the budget. As with EI, Restaurants Canada recommends that enhancements to CPP be targeted to Canadians needing additional retirement earnings support, without jeopardizing youth jobs. I'd be happy to expand on this during the question period.
Finally, I'd like to touch on one other issue that we included in our pre-budget submission that wasn't included in the budget, which is the high cost of credit card acceptance fees. These fees have long been a major source of concern for restaurant operators. Canadians are being incented to use their cards for all types of purchases, from their morning coffee to basic groceries, to take advantage of generous rewards points and cash-back deals. These rewards and deals are financed through the high processing fees charged to merchants.
We are encouraged that there is a private member's bill before Parliament, sponsored by MP Lapointe, which we will support and hope will lead to a regulatory cap on credit card acceptance fees. We hope that this committee will support this bill as well.
To conclude, I'm here representing the industry that's in every Canadian community, urban and rural. We build neighbourhoods, attract tourists, and provide more first jobs than any other industry. With the right measures in place, we can contribute even more to the employment of youth and to a strong and growing economy. I look forward to a productive discussion with you during question period.
Thank you.