‘Moderate effect, if any’: B.C. restaurant association reacts to planned GST break

The B.C. restaurant industry has mixed reactions to the potential upcoming federal GST tax break, with some skeptical customers will enjoy any savings.

On Thursday, Prime Minister Justin Trudeau announced his government’s plans to temporarily lift the federal sales tax off a slew of items with a goal to make the holidays cheaper for Canadians.

If approved, the GST break, which would begin Dec. 14 and end Feb. 15, applies to restaurant meals — whether dine-in, takeout, or delivery — snacks, beer, wine, and pre-mixed alcoholic beverages below 7 per cent ABV.

Ian Tostensen, president of the BC Restaurant and Food Services Association, says the conditions might be confusing for some people.

“So you and I have a glass of wine, which is typically around 12 per cent, those products are not going to be GST-exempt,” Tostensen explained. 

He adds servers and point-of-sale employees might also be burdened with managing the change.

“Does it mount to a great uptick in industry to go through all this just be a bit of a break for the consumer?” Tostensen asked. “We think it’s going to be a very moderate effect, if any.”

If the federal government wanted a tax measure to truly stimulate the industry, he says, it should be under different conditions.

“Having to explain these nuances at a time in December when we’re busy, it’s not the right time… they should have made this longer-term to make the changeover worthwhile, communicate it properly to the public that there’s potentially a little bit of a savings here.”

Tostensen says he’d rather see restaurant meals made deductible as a business expense or have the change be permanent to allow restaurants time to adjust.

He notes the rest of Canada may feel differently under different economic pressures than the industry in B.C.

Overall, Tostensen believes the tax break is too little, too brief.

“Yes, we want to pass on savings to our guests. But I think when you do that, you want to pass [on something] that is substantial. You don’t want to pass it on with the guest going, ‘That wasn’t a big deal.’ So that’s where I think this is going to run a problem.” 

Also announced Thursday, Canadians who worked in 2023 and earned $150,000 or less would receive a $250 cheque in the spring.

If approved, about 18.7 million people will receive the cheques, costing the government about $4.7 billion, while the GST break is expected to cost another $1.6 billion.

—With files from Cole Schisler