After tax holiday's success, industry group calls for GST/HST to come off all food for good

A group that advocates for the restaurant and food service industry wants to tackle Canada's affordability crisis, starting at the table.

Restaurants Canada has launched a national campaign calling on the federal government to reintroduce a policy that eliminates GST and HST taxes on all food — restaurant meals as well as grocery store items.

Janick Cormier, Restaurants Canada's vice-president for the Atlantic region, said the call comes as restaurants continue to struggle with rising operating costs and stagnant revenues.

"It's no secret that the pandemic was hard on our industry, and we've never fully recovered. Today, about 53 per cent of restaurants are either operating at a loss or barely breaking even," Cormier told CBC's Island Morning.

Cormier said the organization wants the tax relief to apply not just to restaurant meals, but to all prepared food items, whether they're sold in restaurants or at grocery stores.

"At the end of the day, food is food. Everybody needs to eat, and taxing food is wrong," she said.

Tax holiday 'a tremendous boost'

Cormier pointed to the federal government's two-month GST/HST holiday that began in December as proof of the proposal's value.

She said it led to noticeable increases in sales and revenue across the country, particularly during January and February, typically the slowest months for the food industry.

"It was a tremendous boost for industry at a time where we needed it the most," she said. "That's why we're here talking about it, and asking the government to remove the tax permanently."

The organization argues the proposal could stimulate broader economic growth as well.

"We're estimating that this could lead to an additional 64,000 new jobs in the industry, over 15,000 spinoff jobs in related industries... the deliveries, the agriculture, fisheries," she said.

"It would be about $1.5 billion in additional tax revenue from all of this employment, and our unemployment rate would go down quite significantly. And this would also equate to about $5.4 billion in tax saving for consumers who are also struggling to make ends meet."

'We need to be cautious'

Patrick Ross, owner of China Garden in Charlottetown, said he supports the proposal.

"I think it's a positive move. I think that it was certainly something that gave us a boost when we had it done back in the wintertime," he said.

"And it's something that I would like to see happen again — not sure for how long, but it certainly gives an added boost when needed, especially during challenging times."

Ross said his restaurant has also faced the ongoing pressures of rising costs.

"Prices have continued to increase — and this has happened over a long period of time and restaurants are feeling that effect — and now with what is happening with the United States, that is going to start making its way into the cost of our supplies, and that then affects prices, and it also affects people's disposable income, to be able to come out and treat themselves to dinner out," he said.

We need to be cautious, because government needs taxes. It is something that the country needs in order to function right.— Restaurant owner Patrick Ross

"Doing something like this will help individuals be able to enjoy a meal out together, and then in return, help the restaurants with increased sales to help with the increased expenses."

While supportive of the tax cut proposal, Ross mentioned the need for balance.

"We need to be cautious, because government needs taxes. It is something that the country needs in order to function right. So there needs to be a balance with reducing the taxes, but at the same time being fiscally responsible as a government."