REGINA - Count the hospitality industry in Saskatchewan as one of those concerned about the impact of the carbon tax increase that came in on April 1.
The carbon tax went up $15 per tonne Monday, resulting in an immediate spike at gas pumps in Saskatchewan and across the country, and prompting axe-the-tax rallies and protests at provincial borders.
Hospitality industry leaders, who were gathered Tuesday at a provincial funding announcement for their sector at the Atlas Hotel on Albert Street, pointed to the inflationary pressures felt in particular by their own operators as creating significant issues. The hospitality industry are heavy consumers of energy for their buildings, restaurants and pools, and rely on tourists from out of town to be able to come in to spend money on hotel rooms, meeting rooms, and food.
Ryan Urzada, Chief Experience Officer of Atlas Hotel, held nothing back to reporters in voicing his disdain for the carbon tax.
“200-room conference hotel, 15 meeting rooms, a water park, a restaurant and a pub — our carbon tax last year was approximately $70,000, is what I pay,” said Urzada.
“That’s $70,000 that isn’t going to wage increases. It’s $70,000 that doesn’t go into reinvestment or expansion. And it’s quite frankly $70,000 that erodes profit margins that we have to actually have confidence in our business. And that’s before the carbon tax increase. So to heat a building like this, which is originally a 1964 building, is significant.”
Urzada adds “it impacts everything. That’s money that comes right off the bottom line. And that’s not money you can recover, so it’s just gone.”
“The amount of pressure that our operators are under right now is staggering,” said Hospitality Saskatchewan President and CEO Jim Bence when asked about the carbon tax increase. He pointed to the mounting pressures on the industry caused by inflation.
“You know the amount of insolvencies are way up, they spiked at 48 per cent within the food (industry) — that’s across-the-board. And in hospitality it’s 112 per cent increase over last year of insolvencies. And it’s attributed mostly to increased pressures in inflation.”
The industry in Saskatchewan is still seeing impacts from the pandemic shutdowns which particularly impacted their sector. A major issue since the pandemic has been an ongoing labour shortage, something the province has tried to rectify with an announcement Tuesday of $400,000 towards the hospitality industry to address that issue.
The shortage of workers, along with inflation, has made it very tough, said Bence.
“All of those types of things really eroded the margins. And also work-life balance, meaning that many operators, particularly small and medium sized, they can’t work seven days a week anymore with the 12 hour shift — they can’t find the labour. So it’s a real combination between prices going up…there’s only so much you can pass along to consumers before the consumer says ‘no it’s just too expensive, I can’t spend $28 on a hamburger platter anymore.’ So it’s a balancing act with operators to keep consumers coming back but then able to make a little bit of money, but not having to work seven days a week.”
