The image of the George Street bar owner: someone who strolls into a packed nightclub surrounded by a throng of friends, partying — presumably for free — into the wee hours of the morning and enjoying life like no other.

While the life of someone who runs a pub on what is arguably the province’s most famous road may appear carefree and glamorous, bar operators would laugh at this notion and argue nothing could be further from the truth.

It is incredibly hard work, they say.

“People think that if you own or run a bar, you basically socialize night time and that’s the brunt of your existence,” says Jim Eastman, who manages Benders on George and has been around ‘the street’ for about 10 years.

“The reality is, it’s a nine-to-five job, combined with a five until four in the morning job. You’re down daytime. You’re doing all the work from an operations aspect and setting up at night for all the promotions you may have coming up. Then night time is when your business starts and actually swings into gear. So you’re around overseeing things in that capacity.”

The people behind the bars — on George Street and across the province — face many challenges in keeping their businesses up and running. Most bars are not the cash cows many think they are, and the long hours certainly aren’t glamorous.

Costs are up — insurance, for example, has tripled for some over the past three years — while revenue is down, 3.9 per cent by some estimates.

A big reason why the bottom lines aren’t better is taxes. And while everyone groans about taxes, the three levels of government hit bar owners in this province with 16 different charges — everything from a tax on the music they play to a levy on the alcohol they buy.

Luc Erjavec is vice-president Atlantic with the Canadian Restaurant and Foodservices Association (CRFA). He is lobbying to get some industry issues resolved in this province. He says Newfoundland operators “are way out of whack” with the rest of the country when it comes to taxes. The two charges that jump out at him are worker’s compensation rates and the aforementioned levy.

“In those two issues,” he says from his Halifax office, “you’re totally out of league with the other provinces.”

Erjavec says the worker’s compensation rates paid by bar and restaurant owners here is “almost triple” the rate people in the industry pay in Nova Scotia, New Brunswick and Prince Edward Island.

And not only is the rate higher, the worker’s compensation commission in this province expects licensed establishments to predict their payrolls for the year and pay rates up front.

“That’s ridiculous,” says Erjavec, whose group is working with the WCC to change that policy.

Brenda O’Reilly, a Newfoundland director on the CRFA and owner of O’Reilly’s Irish Pub, says the rates hurt cash flow. Having to pay compensation rates on estimated staffing levels, she adds, is unfair.

“(It) shouldn’t be because I haven’t incurred the labour,” she notes.

As for the infamous liquor levy — 12 per cent over and above the price public pays for wine and liquor — Erjavec “would almost describe it as obscene.

“You pay 12 per cent tax for which you receive almost zero service,” he says, “and then on the other hand (with) most businesses, you receive bulk discounts, you would receive payment terms. With beverage alcohol products, you’re paying the full pop, plus 12 per cent, and you’re not receiving any of the other benefit.”

New Brunswick doesn’t have such a levy. Nova Scotia and Prince Edward Island do, but the taxes are nowhere near as high as Newfoundland, where bars and restaurants also pay a four per cent levy on beer.

O’Reilly says the industry has been lobbying to change this tax for years.

“When I started getting into the industry, Paul Dicks was the Finance minister,” she says. “We’ve been through a lot of different Finance ministers.

“We’ve seemed close (to getting the levy changed) at some points, but when you’re faced with such a high deficit...(Former Liberal Finance minister) Joan Marie Aylward said to me one time, ‘How are we supposed to get rid of that levy when we can’t afford health care?’ and I’m like, ‘The levy is a deterrent.’ ”

Erjavec says it all comes down to respect. He’d like government to recognize the contributions the industry makes in terms of revenues and employment, and help it grow by addressing issues like the levy.

“They have to recognize the importance of the industry — $450 million in sales, 13,000 employees, one of largest private sector employers in Newfoundland.”

Lowering personal taxes — a move that would increase the public’s disposable income — would also stimulate the industry, Erjavec notes.

Alleviating some of the tax burden would also help bars and restaurants, and it would provide numerous benefits to the industry as a whole — and to places like George Street.

The proprietors there, through the George Street Association, are trying to capitalize on the potential of the strip as an entertainment district. They intend on making physical improvements to the road’s infrastructure.

Many would like to upgrade their bars, too. Lessening the taxes they pay would allow them to put money back into their businesses and help in the struggle to make George all it can be.

The alternative, if expenses continue to soar and revenues to decline, is cost reducing measures — something many bars already face regularly.

“There are a lot of establishments that get by almost day by day,” Erjavec notes.

Says Eastman: “A lot of us are breaking even and just waiting for something to change. It’s not the cash cow people thought it was or that it was to a certain degree a few years ago.”

BY STEVE BARTLETT
The Express, Wednesday, September 22, 2004