Restaurants want GST holiday to be permanent, even if some didn't see benefits

Bill Pratt, a veteran chef and CEO of Chef Inspired Group of Restaurants, walks out a shared restaurant space of Cheese Curds Gourmet Burgers + Poutinerie and Habaneros Modern Taco Bar in Dartmouth, N.S. on May 17, 2023. THE CANADIAN PRESS/Darren Calabrese

TORONTO — Members of the restaurant industry are calling on the federal government to make the GST holiday permanent, even though some businesses have yet to see much impact from the tax break.

Some business owners say the tax break on restaurant meals stretching from Dec. 14 to Feb. 15 has been a big enough hit that it’s worth extending for good.

“People are just freaking loving it, like we hear about it every day. It’s just crazy,” said Bill Pratt, the chief executive of the Chef Inspired Group of Restaurants, which owns Habaneros Modern Taco Bar, Cheese Curds and Studio East Asian Gastropub in Nova Scotia.

“There’s always going to be naysayers, but I’m on the other side of the fence going ‘Come on, let’s run it even further. Let’s keep it going.’”

That view is cropping up in corners of the industry as some restaurants crunch holiday numbers and discover they experienced an uptick in sales and visits since the tax break period began in the lead up to Christmas.

Survey data from industry group Restaurants Canada released Friday shows there was a modest increase in how often Canadians dined out at restaurants in December compared with December 2023.

Reservations platform OpenTable similarly saw the number of online bookings at Canadian restaurants between Dec. 14 and Dec. 27 increase 18 per cent from the same period a year ago.

Kelly Higginson, Restaurants Canada’s president and CEO, said the start of the GST relief period was “status quo.”

“But then I think people started to see their bills and thought, ‘Oh, stopping for that snack isn’t as much or I’m going out for dinner and I’m going to order just that little bit of a better bottle of wine because there isn’t that 13 per cent added on at the end of the meal.’”

Customers weren’t just spending more but also showing more willingness to dine out more often.

Pratt said he’s noticing more patrons on weeknights: “On a Wednesday night, we didn’t have that many people last year.”

Higginson expects such behaviour to last through January and into February — months that are known for being slow for the industry — but fears what will happen when the GST break ends after Valentine’s Day.

That’s part of why she said her organization recently started having discussions with policymakers about keeping the tax break around.

The tax break, which also applied to purchases of some groceries, toys and children’s apparel, was framed by the federal government as a way to help ease the high costs Canadians have grappled with.

Arturo Anhalt, the founder and chef at Milagro Cantina in Toronto, said he wouldn’t mind the tax holiday being made permanent because he’s in favour of anything that helps the restaurant industry.

“These are stressful times for people,” he said, noting business margins and the cost of labour have created tremendous pressures for restaurants following COVID-19.

Yet the tax holiday didn’t bring any dramatic change to his Mexican restaurant.

“At the beginning, we were letting our guests know they’re not going to pay GST and thinking that it was going to have some sort of effect, but people don’t really seem to care,” he said.

In fact, he thought this January so far was slower than last — an observation Stacy’s Island Flavor Restaurant and Caterers in Toronto also had.

Owner Stacy Porter said the business serving up Jamaican cuisine hasn’t received more customers because of the GST break, but many that have visited added extra drinks or sides to their orders.

The GST break “was a good idea to try to see if we get more businesses or customers would spend more,” she said, noting that hadn’t really materialized.

“But maybe later on in the month, we’ll see more people coming in.”

This report by The Canadian Press was first published Jan. 17, 2025.

Tara Deschamps, The Canadian Press