The next government can protect the 1.2 million workers in the foodservice industry, improve food affordability for Canadians and help keep foodservice businesses afloat during the tariff war by exempting all food from sales taxes, as it did during the recent GST/HST holiday, says Restaurants Canada.
The national organization said eight in 10 (77%) Canadians would like to see the GST/HST holiday made permanent, and 84% believe food should not be taxed, according to a spark*insights public opinion poll conducted on behalf of Restaurants Canada.
New Statistics Canada data reveal that commercial foodservice sales increased by a robust 7.5% year-over-year in January. Even after adjusting for inflation, real sales rose by 4.3%—the highest real growth since April 2023. This supports earlier findings that the GST/HST holiday led to a 67,500 year-over-year increase in foodservice sector jobs in January, it said.
“Restaurants are the number one source of first-time jobs and the fourth largest private-sector employer in Canada,” said Kelly Higginson, President and CEO of Restaurants Canada.
“A million dollars in sales in our sector generates $1.8 million in output in the wider economy and 17.6 jobs, both above the average for other industries. There is real opportunity here for the next government to invest in a major driver of the Canadian and local economies, protect jobs and help make life more affordable for Canadians.
“2024 was a tough year for restaurants, with consumer spending down due to the affordability crisis impacting Canadians across the country, while every operating cost was going up. The GST/HST holiday was a much-needed boost, but we need permanent measures to address affordability for Canadians and allow our industry to continue to be a major contributor to the Canadian economy, especially as we face the new threat of U.S. tariffs.”
Restaurants and their employees pay $26 billion in federal, provincial and municipal taxes and contribute 4% of the national GDP. However, economic instability has left the sector vulnerable: 53% of foodservice businesses say they are operating at a loss or just breaking even, up from 12% pre-pandemic. Bankruptcies in the industry increased by 45% in the first eight months of 2024 compared to the same period in 2023, explained Restaurants Canada.
Restaurants Canada said it has reached out to all the major federal parties with a list of additional recommendations for their platforms, including reducing interprovincial trade barriers and reducing payroll taxes.
Restaurants Canada is a national, not-for-profit association advancing Canada’s diverse and dynamic foodservice industry. Restaurants are a nearly $120 billion industry employing 1.2 million Canadians and is the number one source of first-time jobs in Canada.
