Restaurants Canada wants the tax ‘holiday’ made permanent as it approaches the deadline

The group that represents restaurants across Canada wants the government to make the temporary break on sales tax (GST/HST) permanent. They say early signs show it has helped some Canadians with tight budgets eat out more often.

Restaurants Canada said in a report on Thursday that it expects food service sales to increase by $1.5 billion over the 60-day period thanks to the tax break, compared to what they would be without it.

Data from the online reservation platform OpenTable shows an 18% increase in people dining at restaurants during the first two weeks of the tax break compared to the same time last year. Ontario saw an even bigger jump, with a 23% increase.

That differs from data from payment processor Moneris, which reported a 6% decrease in the number of restaurant transactions across Canada during the first month of the tax break.

Kelly Higginson, president and CEO of Restaurants Canada, says the tax break has been a big help for the restaurant industry, especially as people are feeling uncertain about spending as 2025 approaches.

"With the rising cost of living, everyone has been feeling the strain on their wallets," she has said.

The association’s monthly surveys show that about 36% of people are eating out less at both sit-down and fast-food restaurants to save money. Some are also cutting back by skipping extras or just drinking water with their meals.

The survey also found that about one in four Canadian households earning less than $50,000 a year didn’t eat at a restaurant at all this past August, an increase of 8% compared to the previous year.

"I’m hopeful that the government is starting to understand how taxing food affects everyday, hard-working Canadians," says Higginson.