Restaurant transactions increased by 7.6 percentage points on average during the GST and HST holiday, according to new data released Friday by Restaurants Canada.
“The data is in: restaurant visits, employment levels and transaction sizes were all up during the GST and HST holiday,” said Kelly Higginson, Restaurants Canada President and CEO. “Anecdotally, restaurant operators have been raving about the impact this has had on their businesses. We call on the federal government to extend the tax holiday.
“Canada is facing potentially one the biggest economic threats in its history. When we have something like the GST/HST holiday stimulating job growth across the country now is not the time to disrupt that momentum. Now is the time to make bold moves to bolster our local economies, protect Canadian jobs and help Canadians bridge to better times.”
Restaurants Canada is a national, not-for-profit association advancing Canada’s diverse and dynamic foodservice industry. Restaurants are a $120 billion industry employing nearly 1.2 million Canadians and is the number one source of first-time jobs in Canada.
The association said the average transaction size at table-service restaurants rose by 5.4% year-over-year in the first six weeks of the GST and HST holiday, based on transaction data from Moneris and applying Restaurant Canada methodology. This represents a 7.6 percentage point swing compared to the three weeks before the tax holiday, when transactions were on average 2.2% lower year-over-year. Quick service restaurants saw an 8.3 percentage point increase in transaction sizes and drinking places saw a 7.5 percentage point boost.
Extending the tax holiday
“Restaurants Canada’s early estimate was that the tax holiday would lead to a 5% to 7% increase in restaurant sales, the equivalent of an additional $1.5 billion during the two-month period. This has been a lifeline for an industry that is in worse shape now than it was during the pandemic. More than half of restaurants are operating at a loss of just breaking even, compared to just 12% pre-pandemic,” added Chris Elliott, Restaurants Canada Chief Economist and Vice-President of Research.
The association said it has been calling on the federal government to extend the tax relief until the tariff dispute with the United States is resolved and pass legislation to make prepared food permanently tax-free once Parliament is back in session.
“Last week, job numbers from Statistics Canada showed employment in the industry is also up by 6%, creating 34,600 new jobs at a time of low job security and worries about the impact of tariffs on employment. Extending the holiday would not only protect jobs it would create additional ones, providing security for many Canadians,” it said.
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