Canadian tax holiday comes to an end, restaurant owners call for extension

As the federal tax holiday comes to an end, Restaurants Canada says it's been good for business, and they want more. CTV London's Bryan Bicknell reports.

This Saturday, federal government’s two month tax holiday comes to an end. Restaurants Canada, the lobby group representing restaurants across the country says people are dining out more often, and spending more, and it’s all because of the tax relief.

At Kelsey’s Original Roadhouse in west London, manager Sean Cross likes what he sees.

“We’re seeing a good uptick in sales. We’re probably up double digits over the same period last year. Where it’s a bit unique is the number of guests we’ve seen is only up just a little bit. So are observation is that people are spending a little bit more while they’re in. The average spend is up,” Cross explained.

According to Restaurants Canada, restaurant transactions increased 7.6 per cent during the first six weeks of the GST and HST holiday. That compares with the three weeks prior, when transactions were down 2.2 per cent year over year.

Restaurants Canada Central Region Vice President Kris Barnier says the sales bump comes as restaurants struggle with inflation, as labour and materials costs increase.

“All the costs of running a restaurant have gone up 20, 25 per cent in the past couple years... But at the same time we’ve seen consumer spending drop,” said Barnier.

The numbers show diners appear to be spending more when they do go out. The average bill at a table-service restaurant is up 5.4 per cent year over year.

At a quick-service restaurant the average bill is up 8.3 per cent, and at drinking places, the average bill is up 7.5 per cent.

Patricia Peirce, a customer at Eastside Bar & Grill, London said she finds the difference in the bill to be significant.

“What you’re seeing is what you’re paying, you know. You don’t have all that extra added on. There’s no expectation to tip on the tax now either,” she remarked.

Michael Knott is a regular at Fireside Grill on Commissioners Road in London. He said he’ll be sad to see the tax holiday disappear.

“I found it saved me quite a bit. We’ve been getting so much tax, it’s nice to get a little tax relief. We’d like to get some more.”

Restaurants Canada is calling for the tax holiday to be extended. “At least through any kind of tension with the U.S. - but we think it is something that should be made permanent,” said Barnier.