Early data on the two-month tax break on restaurant meals showed a meaningful boost in dining out, says Restaurants Canada
The Canadian restaurant industry is calling on the federal government to make its GST holiday permanent after seeing a boost in dining out during the past month of tax relief.
Restaurants Canada and OpenTable have revealed new data showing a signifcant boost in diners in both B.C. and Alberta since the GST and HST holiday began in December.
From Dec. 14 to 27, data from OpenTable — which specializes in restaurant tech and reservations — shows an 18 per cent increase across the country in dining compared with the same period in 2023. That included a 12 per cent increase in B.C. year over year and 17 per cent in Alberta.
Those numbers align with Restaurants Canada’s own survey, which calculates a consumer dining index based on the number of times Canadians bought a meal or snack from a restaurant over the past month. It showed a national bump from 85.1 in December 2023 to 92.1 last month. The December 2024 index captures two weeks of the tax holiday.
“Seeing Albertans and British Columbians embrace the tax relief and treat themselves to a meal out is really encouraging, especially as we navigate a climate of economic uncertainty,” said Mark von Schellwitz, regional vice-president for Restaurants Canada.
“The GST holiday discount is not as big in our provinces as it is in HST provinces, making these sales increases even more impressive.”
Von Schellwitz said more sales means more work hours for the 335,000 people who work in the food service industry in the two provinces.
Restaurants Canada calls 2024 “an incredibly difficult year for restaurants, between rising operating costs (total food costs have increased by 25 per cent, insurance by 24 per cent, utilities by 20 per cent and labour costs by 18 per cent) and lower consumer demand.”
The industry representative warns that 53 per cent of restaurants are operating at a loss or barely breaking even, and Restaurants Canada has been asking for government affordability measures like the tax holiday.
“Alberta has no provincial sales tax, providing Albertans with more discretionary income to spend at restaurants,” said von Schellwitz, “and B.C. recognizes the need for food tax fairness by exempting restaurant meals from provincial sales tax, which also reduces the cost of eating out for British Columbians.
The two-month GST and HST break was announced by the federal government last month and runs from Dec. 14, 2024, to Feb. 15, 2025. It offers tax relief on such things as food, beverages and restaurant bills; kids’ essentials like clothes, diapers, car seats and toys; books and video game consoles; and print newspapers.
While the tax holiday was announced by Chrystia Freeland, that and other government spending led to a rift between the then finance minister and Prime Minister Justin Trudeau that led to Freeland’s resignation last month.