Restaurants Canada, a leading industry association, is rallying for a permanent tax exemption on food in eateries and grocery stores, following the success of a recent tax holiday. The organization’s President and CEO, Kelly Higginson, emphasizes that such a move could significantly boost dining out and address affordability concerns faced by many Canadians.
During the temporary tax break from December 2024 to February 2025, the foodservice sector saw remarkable growth, with a notable 8.6% increase in spending and the creation of 24,000 new jobs. Higginson highlights the positive impact on local economies and the potential to generate employment opportunities, especially for young individuals amidst rising youth unemployment rates.
Restaurants Canada underscores that the hospitality industry has been severely impacted by pandemic-related closures and inflationary pressures. The proposed tax exemption is seen as a lifeline for struggling restaurants, offering them a chance to recover from deep debts and operational losses.
While the call for a tax break on food excludes liquor sales, Higginson acknowledges the potential controversy surrounding the proposal. Nevertheless, she stresses the urgency of addressing affordability issues for Canadians and improving the financial stability of food businesses.
Despite active lobbying efforts, there is uncertainty regarding the federal government’s stance on reintroducing the tax exemption in the upcoming economic update. Payment system provider Moneris has raised questions about the economic benefits of such a measure, citing a slight decline in spending during the previous tax holiday.