Restaurant industry pushes Ottawa to bring back tax holiday permanently

Restaurants Canada has launched a national campaign to help pressure the federal government to re-introduce cutting the GST on food, including restaurant meals and items at the grocery store.

The campaign comes after former Prime Minister Justin Trudeau rolled out the tax-cutting initiative late last year, which remained in place until mid-February, 2025.

Restaurant Canada’s Richard Alexander tells 1130 NewsRadio it’s crunched some numbers and found bringing back the tax break for good would make a huge difference.

“The biggest issue facing Canadians and the new Liberal government is affordability. If they were to remove the GST from all food, then that would save Canadians $5.4 billion, and it would create close to 80,000 jobs and about 40 per cent of those jobs would go to youth. And we know the youth employment rates are struggling. It would be a great thing to do for employment, spending, job creation and it would give Canadians a break on something that is a necessity — food,” said Alexander.

Given how unstable the economy is, he admits cutting the tax will cost the federal government, but he still thinks it’s worth it.

“Anything the government does to help with affordability is going to cost money. But this is something that it’s not like you’re taking GST off of cars or something like that. This is something that everybody in Canada uses and everybody in Canada pays for.”

Alexander explains the move would create jobs, including for front-of-house hosts, servers, and kitchen staff.

“The economics around this is sound. When the GST came into effect in 1991, lifestyles were a little bit different than they are today… and the government is looking for ways to provide affordability relief for Canadians. I think we make a very good argument and the public wants it.”

He’s hopeful the federal government will consider doing this when it tables its next financial update.

“First, we have the fall budget — that would be a good time to do it. And the following budget would be in March or April of next year. So, I think we have two cycles at this. If we’re going to see it, we’re going to see it in those two time periods.”

A current snapshot of the industry at a national level, Alexander says, is grim.

“We’ve seen bankruptcies increase dramatically. We’ve also seen that about 50 per cent of restaurants in Canada right now are not making money. They’re either breaking even or operating at a loss. The beauty with the GST/HST holiday that we just saw in Canada is not only did we see an increase in spending, but we saw a decrease in bankruptcies in our industry. We saw about a 50 per cent decrease in bankruptcies during that period of time.”

He says members of Restaurants Canada will be meeting with politicians in Ottawa and MPs across the country in the coming weeks to gauge their support.

Part of the campaign includes a petition which will be delivered to Ottawa in the fall.