Restaurants Canada has just achieved one of its biggest advocacy wins to date.
This has been a turbulent week in Canadian politics. With the resignation of Deputy Prime Minister Chrystia Freeland and Housing Minister Sean Fraser Monday just before the Fall Economic Statement, it looks like an early election and a change in government are almost inevitable.
Restaurants Canada has been working diligently to prepare for this possibility by building strong relationships with key Members of Parliament and staffers within the federal Opposition. We are confident in our strategy and ability to advocate on your behalf with any future government.
View our full statement on the federal government’s Fall Economic Statement here.
Restaurants Canada has just achieved one of its biggest advocacy wins to date.
Thanks to our focused efforts over the past year in addressing affordability challenges affecting Canadians and our sector, the federal government has included our industry, alongside alcohol sales, in the upcoming GST/HST tax holiday. It’s crucial to note that this was not their initial intent.
I was pleased to join The Honourable Rechie Valdez, Canada’s Minister of Small Business, to launch the GST break in Mississauga this past weekend. Watch the video clip here.
We anticipate an additional $1.5 billion in industry sales over the next two months—providing a much-needed boost to restaurants nationwide. Your team at Restaurants Canada is now turning our efforts toward making this tax holiday permanent.
We’ve made substantial progress in preparing the industry for the GST/HST tax holiday launch, and sharing essential insights and addressing key needs has been our focus.
GST/HST Tax Holiday FAQs: Read them here.
Since the introduction of the GST, our industry has faced considerable challenges, resulting in an uneven playing field in comparison with grocery and retail food sales.
In the early 1990s, the implementation of the GST led to a significant loss of market share to grocery and retail stores. Prior to the tax’s introduction in 1991, 42 cents of every dollar spent on food went to restaurants—a share comparable to our industry counterparts in the United States.
However, over the years following the GST’s arrival, Canada’s foodservice share dropped to 36.8 cents, and it has never fully recovered. In contrast, the U.S. restaurant market share per dollar spent on food has now surpassed 50 cents.
While this tax caused a setback, the holiday offers an opportunity for some recovery, at least in the short term, boosting demand and bringing much needed sales to restaurants during January and February 2025.
I want to commend the entire Restaurants Canada team for their dedication and tireless efforts in making this happen and I encourage all operators to take full advantage of this opportunity to market the GST/HST holiday to your customers. I encourage all operators to leverage the GST/HST holiday to promote the price reductions our customers need, without impacting your bottom line. Let’s unite to boost the foodservice industry and offer customers the chance to enjoy our offerings at lower prices.
For more information on the GST/HST tax holiday and to download shareable social media assets, please visit the dedicated page on the RC website.
You will find a play-by-play of how this initiative came together over the past year in EVP Richard Alexander’s section below. This breakdown highlights how our strategic advocacy efforts support the industry.
Quebec EPR fee hike update.
Quebec restaurant operators have raised concerns with Restaurants Canada about the recent steep and surprising increase in extended producer responsibility (EPR) fees by Éco Entreprises Québec (EEQ).
This fee increase, combined with invoices being issued in January—typically the industry’s slowest financial period—creates a significant burden. We have engaged with the Minister of the Environment’s office, and Maximilien Roy will provide further details on our early engagement in his update below.
Restaurants Canada out and about.
On the event front, I’ve had the privilege of participating in various activities, from restaurant openings and policy panels to round tables and member engagements.
I recently touched down in Vancouver, where I was excited to join TIAC Tourism Congress 2024 and participate in the National Leaders panel. Alongside experts from the Indigenous Tourism Association of Canada, Hotel Association of Canada, Tourism HR Canada, Parks Canada, and Destination Canada, we explored solutions to strengthen, support and elevate our industries.
It was an inspiring session that underscored the power of collaboration and advocacy in driving economic growth, creating jobs and enhancing Canada’s global reputation—showcasing tourism as a key driver of prosperity for communities nationwide.
Back in Toronto, I had the pleasure of attending the 35th anniversary of the Pinnacle Awards, which celebrate outstanding achievements in the foodservice and hospitality industry. Congratulations to all the winners for their contributions to innovation, public image and civic engagement in our sector!
Then, I was east to Ottawa for the ever-impactful Equal Voice Gala—a favourite event of mine! This non-partisan event brings together all of Ottawa, and is designed to elevate inspiring female leaders, promote networking opportunities, and encourage the involvement of women and gender-diverse individuals at all levels of government.
I had the opportunity to discuss the foodservice sector and the need for smart policies to strengthen the industry with key cabinet champions.
Last, but certainly not least, Restaurants Canada participated in what has become a regular round table and strategy discussion with the tourism industry’s national associations: Hotel Association of Canada, Tourism Industry Association of Canada, and Tourism HR. Our conversations with Employment and Social Development Canada (ESDC) and Immigration, Refugees and Citizenship Canada continue as we dive deeper into a workforce strategy for the future.
Support.
Conversations with our members about global trade and the impact of President-Elect Donald Trump’s recent election led Restaurants Canada to organize an insightful initial discussion on global trade. You can find the recorded copy here. This marks the start of a series of informative webinars on the topic in the coming months.
We’ve compiled a list of essential U.S. products for our sector for the current finance minister Dominic LeBlanc, who is leading trade negotiations with the U.S. and will continue to work with key suppliers to safeguard the supply chain and costs. This is an evolving issue.
Mark your calendars for an upcoming webinar hosted by HR Tourism.
Losing Ground: The Definitive Workforce Update / En terrain glissant – État des lieux de la main-d’œuvre : la parole aux experts
Join Tourism HR Canada for a must-attend webinar on labour market trends impacting Canada’s tourism industry. This “state of the industry” session will explore workforce challenges like labour shortages, competitiveness and policy shifts. Gain insights into workforce projections, actionable recommendations, and programs designed to address these issues, emphasizing the importance of industry-wide collaboration.
Jan 22, 2025 | 1:00 PM EST | Register here.
The holiday season can be tough for industry operators and employees. As we near the end of this busy time, we want to remind you of our mental health webinar, “Supporting Workplace Mental Health for You & Your Team,” from the RC webinar library. Please consider sharing with your teams.
GOVERNMENT RELATIONS & PUBLIC AFFAIRS UPDATE
From Richard Alexander | Executive Vice-President, Government Relations & Public Affairs
How the GST/HST Holiday for Restaurants Came to Be.
Advocacy takes time.
January 2024: A call for immediate cost relief.
As Canadian Emergency Business Account (CEBA) loan deadlines approached, Restaurants Canada launched a campaign advocating for urgent cost relief for the foodservice industry. Recognizing the critical challenges posed by rising costs, inflation and financial strain on restaurant operators, we began calling for measures to alleviate these pressures. Among our key asks was tax reduction. While we didn’t get the win on a CEBA extension, the Prime Minister opened the door to helping the industry by stating he was committed to finding ways to help the industry.
Spring and Summer 2024: Engaging policymakers and partners.
Restaurants Canada held meetings with federal and provincial policymakers to present data illustrating the financial difficulties facing the foodservice sector. This included a detailed analysis of the increasing number of bankruptcies and the impacts of inflation, such as decreased foot traffic to restaurants and sales across the industry. Restaurants Canada’s advocacy team met with more than 70 MPs during the summer. We also worked with allied organizations to amplify our message and demonstrate broad-based necessity for a measure from the federal government that would address cost relief and affordability for the industry and Canadians.
We also launched five separate public-facing campaigns to generate awareness and support for the industry. The geotargeting of MPs at the Liberal Caucus and Cabinet retreats proved very successful. The campaigns leveraged member stories and consumer testimonials, highlighting how cost relief such as tax cuts could make dining out more accessible while helping operators stay afloat. Restaurants Canada members actively participated, sharing their experiences and voicing their support to local MPs. More than 700 letters were sent by members to MPs and copied to Finance Minister Freeland.
October–November 2024: Progress in discussions with government.
With the holiday season approaching, Restaurants Canada doubled down on its advocacy, emphasizing the time-sensitive nature of the affordability crisis, its impact on the industry and the need for measures to stimulate spending during a critical period. We commissioned public opinion polling that demonstrated clearly that government action on tax reduction would be extremely well received. The polling results proved critical in generating forward momentum.
The breakthrough.
Our work over the past year had won us advocates in Ottawa, including in the Prime Minister’s Office. Government was looking for something to do on affordability and settled on what is now the GST/HST holiday. The original tax holiday proposal did NOT include restaurants or alcohol. Fortunately, our champion in the PMO fought to include our industry—and succeeded.
Make no mistake, this will have a significant, positive effect on our industry. Chris Elliot, Restaurants Canada’s Chief Economist, has provided the following chart demonstrating the additional spending that will likely happen above what would have happened without the tax holiday.
Looking forward.
In 1991 when the GST was introduced on restaurant meals, it devastated the industry.
Before the introduction of the GST, 42 cents of every dollar spent on food went to restaurants. This was a share that was roughly the same as the United States.
After the GST was introduced, the foodservice share in Canada fell to 36.8 cents and has never fully recovered. By comparison, the restaurant market share in the United States is now above 50 cents. We were left behind because our meals became taxed.
We have started lobbying to make this holiday on restaurant meals permanent.
This is the best—and likely the only—opportunity the restaurant industry will have in our lifetimes to reverse what happened in 1991. We are not going to waste it. Our team is already working and will be reaching out to the industry to support our efforts. Stay tuned. Together we can make great things happen.
Thanks to our Government Relations Team.
Finally, I thank and congratulate the Restaurants Canada Advocacy team for this amazing accomplishment. They are some of the best in the business: Mark von Schellwitz, Kris Barnier, Maximilien Roy, Milena Stanoeva, Kshitija Bandur and our fearless leader, Kelly Higginson—all of whom are supported by the dedicated Restaurants Canada team!
SUSTAINABILITY UPDATE
From Jillian Rodak | Vice President, Sustainability
INC-5 Negotiations Concluded Without a Global Plastics Treaty.
The United Nation’s fifth Intergovernmental Negotiating Committee (INC-5) concluded earlier this month with delegates failing to reach an agreement on a global treaty to end plastic pollution. Delegates remain divided on topics such as capping global plastic production and how to best address chemicals of concern. In order to continue discussions, an INC 5.2 will be scheduled (date/location TBD). Restaurants Canada will continue to monitor and assess potential impacts to the Canadian foodservice industry.
Federal Reporting Reminders.
As a reminder, there are new federal reporting obligations and deadlines beginning in 2025 related to chemicals and plastics. To ensure your company is in compliance, we recommend reviewing reporting requirements, deadlines and thresholds with your teams.
- PFAS (also known as “forever chemicals”) – The government is looking to collect data from the 2023 calendar year on where and how PFAS substances were used, including in food packaging materials and equipment, among other categories. Further information on who is required to respond and how to request an extension is included in the Guidance Manual.
Deadline: January 29, 2025 - Federal Plastics Registry – To help reduce plastic pollution and create a circular economy, the government is setting up a Federal Plastics Registry which will require companies to report annually on the quantity/types of plastics manufactured, imported and placed on the market. Categories include food service ware, apparel and textiles, among others.
Deadline: September 29, 2025 (Phase 1 includes plastics destined for the residential waste stream)
Next Steps: To provide further clarity for industry, the government is expected to release a Guidance Document by end-of-year and share further information on the reporting portal in early 2025. Restaurants Canada will continue to monitor and share further details with members as they become available.
FEDERAL UPDATE
From Maximilien Roy | Vice-President, Federal & Québec
GST/HST Holiday: Representing the industry’s interest in front of the Senate.
Restaurants Canada was honoured to participate in the Senate Committee hearings as part of the study on Bill C-78, the Cost of Living Relief Act (Affordability). During our intervention, we underscored the vital role the foodservice sector plays in Canada’s economy, employing nearly 1.2 million people and serving 23 million Canadians daily. We highlighted the immense challenges our industry faces, including skyrocketing costs—25 per cent for food, 18 per cent for labour, and 24 per cent for insurance—and a 45 per cent rise in bankruptcies in 2024 compared to 2023.
Watch the video here.
We also emphasized how temporary GST relief could provide meaningful support to restaurateurs, enhance job security for workers, and offer Canadians a chance to reconnect with loved ones over a meal while alleviating financial pressures. This measure could generate an estimated $1.5 billion in additional sales, representing a shared win for businesses, workers and consumers.
ATLANTIC & CENTRAL CANADA UPDATE
From Kris Barnier | Vice President, Central Canada and the North
Nova Scotia: Post-election movements.
The recently re-elected government affirmed its commitment to drop the HST from 15 per cent down to 14 per cent, making it the lowest HST in Atlantic Canada. The tax break is expected to commence in April of 2025.
Zach Churchill has resigned as Liberal Party Leader. A date has not yet been announced for the election of a new leader.
Newfoundland: Proposed change to sick note policy.
The Minister Responsible for Labour proposed an amendment to the Labour Standards Act in the House of Assembly that will remove the requirement for employees to provide employers with sick notes after three consecutive days of sick leave.
Read the release here.
Ontario: Restaurants Canada and ORHMA press province for expanded alcohol discounts.
Restaurants Canada has joined forces with ORHMA in response to the launch of a government consultation on tax and LCBO mark ups on alcohol. We are actively meeting with top decision-makers inside the Ford Government, pressing that expanding LCBO discount pricing for licensees that serve alcohol on-site represents the most efficient and impactful opportunity the Government of Ontario has to deliver meaningful cost relief to a large segment of our membership.
Ontario: Proposed Working for Workers Six Act offers increased worker health and wellness and lower costs.
Ontario has introduced the Working for Workers Six Act, 2024. If passed, the Act will create a new parent leave for parents through adoption and surrogacy and will create a new 27-week, job-protected long-term illness leave for workers with a serious medical condition. As previously shared, the government will rebate $2.5B in surplus premiums back to eligible Ontario employers and will reduce rates.
Read the release here.
Read the backgrounder here.
Manitoba: Meetings and updates.
I was recently in Manitoba for meetings with government officials, including Finance Minister Adrien Sala. MRFA CEO Shaun Jeffrey and I had a great and promising discussion with the minister about our key priorities including relief on alcohol costs, help for restaurants and bars struggling with the impact of crime, and support for training and employee recruitment efforts and costs. We emphasized urgency with the minister, explaining that the affordability crisis and crime are having huge impacts on our industry that need to be addressed in, or ahead of, the government’s upcoming budget. Shaun and I have also continued to push back against proposed municipal tax efforts targeting alcohol, home delivery and other potential matters that would do harm to restaurant operators.
Combatting violent crime remains a priority for the government. On December 6th, the government announced it will proclaim the Long-Bladed Weapon Control Act, restricting access to machetes.
WESTERN UPDATE
From Mark von Schellwitz | Vice-President, Western Canada
Saskatchewan: Province introduces Employment Standards Amendment Act.
With the new Saskatchewan legislative session underway, the government introduced the Saskatchewan Employment Standards Amendment Act. The proposed Employment Standards amendments are designed to reduce the administrative burden for employers while still supporting employees in today’s changing workplaces.
The legislative amendments, if passed, would make several Employment Standards changes based on feedback from Restaurants Canada and other stakeholders, including:
- Allowing employers to use a calendar day rather than 24 consecutive hours for the purposes of work schedules and overtime provisions.
- Prohibiting employers from withholding tips from their employees.
- Increasing the threshold when employers are required to notify employees, the minister and the union of a group termination from 10 to 25 employees.
- Limiting when employers can request sick notes.
- Providing the director of employment standards with the authority to order reinstatement or compensation for lost wages in cases of discriminatory action by an employer.
- Extending leave provisions related to sick leave, maternity leave, interpersonal violence leave and bereavement leave.
Alberta: Update on AAIP Tourism and Hospitality Stream.
Last week the Immigration Minister’s office provided Restaurants Canada an update on the new Alberta Advantage Immigration Program’s (AAIP) Tourism and Hospitality Stream. We were informed that most of the permanent resident applications in the new stream came from Restaurants Canada members. Currently more than 650 applications under the stream have been approved, but roughly 120 nominations are still available in the new stream’s allocation. If members were contemplating sponsoring temporary workers to become permanent residents under the new AAIP stream, but have not yet done so, there is still time to submit applications.
More information on the Tourism and Hospitality Stream can be found here.
British Columbia: Chamber of Commerce holds Premier and Cabinet lunch event.
On December 10th Restaurants Canada participated in the annual B.C. Chamber of Commerce Premier and Cabinet reception and lunch event. It was a great opportunity to meet with new ministers and listen to Premier Eby’s priorities for the newly elected government.
Premier Eby said he has hit the reset button with respect to working with B.C. businesses and looks forward to working collaboratively with them and their respective associations to grow the economy and address affordability concerns. The Premier also mentioned that the promised $1,000 middle class income tax rebate will help increase disposable income for British Columbians and boost sales for the province’s restaurants and other small businesses once implemented.
Restaurants Canada was pleased to be seated with B.C.’s new Tourism, Arts, Culture and Sport Minister Spencer Chandra Herbert at the event.
Recent webinars—now available to watch on demand.
Restaurants Canada has recently hosted a number of important and engaging webinars. Available to watch on your own schedule, they feature top industry thought leaders and companies and are designed to provide clear, current and helpful information to help you learn, grow and thrive.
Managing the Impact of U.S. Tariffs on Canadian Foodservice
How will proposed U.S. tariffs impact Canada’s foodservice industry?
Whether you’re a supplier or operator, Part 1 of this essential webinar provides critical insights into evolving trade policies and their implications for Canadian foodservice businesses. Get clarity on trade policies, including the CUSMA review, and the economic and operational impacts of U.S. tariffs with comparative perspectives and potential collaborative solutions from the National Restaurant Association.
Restaurants Canada President & CEO Kelly Higginson hosts leading experts: Ann Penner, Director, Trade Practice at Wellington Advocacy; Chad Moutray, Ph.D., CBE, Vice President, Research & Knowledge at National Restaurant Association; and Chris Elliott, Chief Economist & VP, Research at Restaurants Canada.
Immigration Cuts & What It Means for Canada’s Foodservice Industry
Presented by Restaurants Canada with Canadian Chamber of Commerce and Saskatoon Immigration & Employment Consulting Services Inc.
Canadian GST/HST Holiday – What it is and how to prepare.
Squirrel hosts Restaurants Canada for a look at the new GST/HST changes announced by the Canadian government as well as the benefits and implications for operators.
As 2024 winds down, what truly stands out to me about the journey so far is the growing return we’re beginning to see on our combined efforts. The support of our members, the persistence of our team, the significant government and industry relationships we have nurtured, and the remarkable effectiveness of our government relations and advocacy strategy are working, and I believe they can work even harder.
Your support is vitally important for our advocacy work. It adds the human experiences we need to continue to push for an ever-louder, clearer and more respected voice for our industry.
Thank you for your continued support. Please help spread the word about our work at Restaurants Canada. Together, we grow stronger.
Kelly Higginson
