WINNIPEG – As food prices continue to climb, Joy Whitesell says she is feeling the pinch at the grocery store.
“It’s getting expensive to eat healthy,” she said while grocery shopping Wednesday.
But Manitobans like herself may soon see a tax break at the checkout. While basic grocery items are already tax-exempt, prepared items will soon be too.
The provincial government announced in its latest budget earlier this week that starting July 1, it plans to eliminate the provincial sales tax (PST) on all food items in the grocery store.
“I think that’s a great idea that it’s going to happen,” Whitesell said. “It will help families. Every little bit helps.”
Currently, fruits and vegetables, most meat and milk products, eggs, and coffee are exempt from the seven per cent tax in Manitoba. But Tuesday’s budget is aiming to extend that relief.
Items set to be exempt from the tax include:
- Prepared foods, such as sandwiches, soups, rotisserie chickens, prepared fruits and vegetables, and platters
- Carbonated drinks, fruit juices, dealcoholized beer and wine
- Baked goods
- Snack foods, such as candy, chips, salted nuts and granola
The province says Manitoba’s revenue will drop $24 million due to the tax change.
Shopper Leslie Carter welcomes the move, but still has some concerns.
“Everything seems to be going up, but at what cost is that going to happen,” she said. “How are they going to do that? Where is that money coming from?”
Carter says she doesn’t have a big family to feed, but is always “shocked” when she sees prices at the grocery store.
She hopes this relief will help families, like hers, in some way.
“Some of the prices that have gone up, the regular stuff that we used to buy all the time, sometimes it’s double, and it’s hard to believe it’s gone up that much,” she said.
‘It’s pennies’: grocery store owner
Munther Zeid owns and operates Food Fare, an independent and family-owned grocery store in Winnipeg.
He emphasizes that any savings for anyone is a good thing and said that shoppers may see some relief at the till. However, he warns it won’t be much.
“If you look at a lot of people’s receipts that they do on a daily basis, whether they are spending $50 or $100, they may have something of PST under a dollar,” he said. “That’s not really going to put money in people’s pockets. It’s not going to really be significant savings for anybody.”
Zeid says the provincial government really needs to find a way to truly put “dollars back into people’s pockets.”
“It seems like they are picking on the retailers,” he said. “Don’t pick on the retailers, go on the wholesalers. That’s where the savings can happen.”
Restaurants not included in exemption
Unlike grocery stores, however, restaurants and other food retailers will still be subject to the sales tax.
Restaurants Canada says the budget fails “to exempt all food, including restaurant meals.”
Kelly Higginson, the president and CEO of Restaurants Canada, says Manitobans should not be taxed on items sold in a restaurant if the same product is not taxed in the grocery store.
“Exempting prepared meals sold at grocery stores from PST, but not those sold at restaurants, would hurt consumers while putting restaurant businesses and their workers at risk,” Higginson said in a statement.
“Many Manitobans depend on restaurants for their daily meals, as well as for their livelihoods. We call on the Manitoba government to include restaurant meals in the planned PST exemption.”
Shiu-Yik Au, an associate professor in accounting and finance at the University of Manitoba, agrees the policy could influence consumer behaviour.
“If you’re a family trying to take your family out for dinner, and you’re watching every penny, you might consider trying to bring home a chicken from Costco, or a grocery store, and save that little bit of extra money,” he said.
Budget is ‘about fairness’: Manitoba’s Kinew
Manitoba Premier Wab Kinew responded to concerns from the restaurant industry.
“We love the restaurant industry. They do great work,” he said at a press conference Wednesday. “A lot of low-income Manitobans can’t go out to eat, but they are still going to go to the store.”
“Saving money for your family on all food and drinks from the grocery store, that’s a way to help everybody,” he said. “That’s a way that we can make sure we are helping with the cost of living and helping with fairness.”
