An eventful start to the year in Ottawa with Prime Minister Justin Trudeau’s resignation and the prorogation of Parliament

January 13, 2025 Share on your social channels

The start of the year in Ottawa has been eventful with Prime Minister Justin Trudeau’s resignation and the prorogation of Parliament. Despite these changes, Restaurants Canada remains committed to reducing costs, fostering growth, and supporting innovation in the foodservice industry. Moving forward we will continue working with the Official Opposition and meet with Liberal leadership candidates to advocate for tax reforms, smart, strategic immigration policies and workforce regulations that support our industry. Our focus remains on cost relief, workforce solutions, and sustainability heading into 2025.

We have been fully engaged on tariff threats that will impact our industry and most recently attended a business association meeting hosted by the Canadian Chamber of Commerce. Max Roy, Vice President of Federal Affairs and Quebec, has highlighted the impact of a prorogued parliament and details of the Chamber meeting below.

Heading into 2025

We began 2024 facing challenges such as CEBA pressures, rising inflation, increasing bankruptcies, and signs of slowing consumer spending. However, the year ended with important recognition of the restaurant industry’s vital role in Canada’s social and economic vibrancy through our inclusion in the GST and HST holiday. This acknowledgment reinforced the need to prioritize our sector in policy decisions and economic initiatives. Being included in the GST and HST holiday was crucial, and exclusion would have had a significant negative impact on our industry. We remain very pleased that our months of advocacy proved effective.

For the first time in 34 years, all food in Canada is exempt from GST and HST for two months, providing temporary relief for Canadians and raising questions about taxing food.

The introduction of the GST in 1991 created an uneven playing field between grocery stores and restaurants and was devastating to the restaurant industry. An Ernst and Young report found that restaurant sales dropped 11% that year, 7% of which was directly attributed to the introduction of GST.

Prior to the introduction of the GST in 1991, 42 cents of every dollar spent on food went to restaurants, a share comparable to that of the United States. However, following the implementation of the GST, Canada’s foodservice share dropped to 36.8 cents, and it has never fully recovered. In contrast, the restaurant market share in the United States has now surpassed 50 cents.

During the tax break, Restaurants Canada estimates our industry will see $1.5 billion in additional sales. Early feedback from our partners and many of our members tells us that the first two weeks of the tax holiday saw a notable boost in reservations and sales.

It has been great to see restaurants and grocery stores highlight the tax holiday in their marketing initiatives. If you haven’t yet highlighted the tax break to your customers, leverage the marketing resources we’ve provided and encourage them to take advantage over the next month.

Restaurants are a part of Canadians’ daily lives yet operating them has never been more complex or costly. Rising expenses, labour shortages, stretched operators, and increasing regulations add to the challenge. As we reflect on our advocacy efforts in 2024, we enter 2025 with a clear focus on cost relief, workforce and immigration, and sustainability regulations working towards our vision of “vibrant and thriving restaurant and foodservice communities across Canada.”

Check out a few more of our advocacy wins over the past year:

Recent surveys

Thank you to everyone who participated in our recent survey. Based on the results, 16% of operators have experienced a CRA audit related to federal pandemic subsidies, including rent subsidies, CEBA, and wage subsidies. We had received reports of a small number of operators undergoing audits and wanted to assess the scope and focus of these audits. Restaurants Canada will continue to monitor the situation, and if you have any questions or concerns, please don’t hesitate to reach out to your regional Vice President.

GOVERNMENT RELATIONS & PUBLIC AFFAIRS UPDATE

From Richard Alexander | Executive Vice-President, Government Relations & Public Affairs

The future of the restaurant industry’s supply of labour, and what we are doing about it

The changes to immigration over the past year are making sourcing labour more challenging. Restaurants Canada, in reaction to the public’s concerns surrounding immigration levels, advocated strongly to Ottawa and the public to hold on to the levels and streams that we had.

We have provided toolkits and webinars to help operators identify opportunities to source labour in the short and medium term. We strongly encourage operators to be proactive. There are options available now that, in many cases, will be easier than more familiar streams such as the temporary foreign worker program.

Our most recent webinar will help you understand the changes and provide options. Watch it here.

Our Recruiting International Workers Toolkit identifies several immigration streams for our industry. Download it here.

Long-term Labour Supply

We have seen the pendulum of immigration levels swing before. It can and will likely swing back toward a more pro-immigration stance because the economics of immigration in our country is sound. We need immigration to continue to grow our economy.

Our goal is to play a long game with Ottawa and, with whoever is in power, to push the supply of labour for our industry back to the levels needed. Current estimates are our industry will need at least 200,000 additional workers by 2030. The supply of labour will most definitely be a long-term advocacy priority for Restaurants Canada.

Restaurants Canada is currently building a comprehensive advocacy strategy designed to create workforce policies that can help supply future demand for labour in our industry. The strategy will include research, public opinion polling, community outreach and targeted communication. This long-term strategy will work to build public and government support for the restaurant industry and influence future labour force and immigration public policies.

Stay tuned for more on this file.

SUSTAINABILITY UPDATE

From Jillian Rodak | Vice President, Sustainability

Greenwashing Guidelines Consultation

To help companies comply with the new anti-greenwashing provisions in the Competition Act, the Competition Bureau has launched a public consultation to gather feedback on proposed guidelines. This will assist companies in assessing whether environmental claims related to business activities or a product’s benefits are in compliance (e.g., emission reductions, use of recycled material, etc.).

The proposed guidelines will be open for public consultation until February 28, 2025 and feedback can be provided directly to environmentalclaims-declarationsenvironnementales@cb-bc.gc.ca. Restaurants Canada will also be working closely with the Sustainability Committee to prepare a submission.

Federal Plastics Registry Guidance

As a reminder, if you supply plastics into the Canadian market, including single-use or disposable items, packaging and more, you may be subject to reporting requirements under the Federal Plastics Registry. The first phase of reporting is due September 29, 2025 (based on 2024 data). To help industry prepare, Environment and Climate Change Canada (ECCC) recently published an updated guidance document. In addition, a foreign supplier letter template has been made available in several languages to help support outreach to supply chain partners. Please contact sustainability@restaurantscanada.org if you would like copies.

Given the prorogued government, evolving political landscape, and ongoing requests to delay the September plastics reporting deadline, Restaurants Canada will continue to remain engaged with government and keep members updated.

Sustainability & Climate-Related Disclosures

Around the world, we are seeing increased pressure on companies to be more transparent when it comes to disclosing information on sustainability and climate-related work (e.g., carbon emissions, risks tied to environmental issues, etc.). As part of this, the Canadian Sustainability Standards Board (CSSB) recently published their Canadian Sustainability Disclosure Standards.

It’s important to note that these standards are voluntary unless mandated by regulators or government, but the Canadian Securities Administrators (CSA) has already indicated they are working towards a revised climate-related disclosure rule and will consider the CSSB standards. Given the potential data requirements and administrative burden for members if mandated, Restaurants Canada will continue to monitor the evolving landscape and keep members informed.

FEDERAL UPDATE

From Maximilien Roy | Vice-President, Federal & Québec

Prorogation: What it means for you

Before announcing his resignation on Monday, Prime Minister Trudeau met with the Governor General and successfully requested the prorogation of Parliament until March 24. Prorogation effectively halts all parliamentary business—debates, committee work, and the progression of legislation—until a new session begins. As a result, all current bills and motions are removed from the legislative agenda, although they can be reintroduced in the new session.

Key points to note:

Regulatory changes continue: While no new laws will be passed during prorogation, regulatory changes can still proceed without parliamentary approval, requiring only Cabinet authorization. This means certain updates to existing policies could still be implemented.
Capital Gains taxation: The Canada Revenue Agency (CRA) will issue taxpayer forms reflecting the proposed changes to capital gains rules by January 31. If Parliament resumes and the government decides not to proceed with the proposed changes, the CRA will cease administering the policy.

Immigration and LMIA delays: Members have reported ongoing delays in the Labour Market Impact Assessment (LMIA) process. As changes to this process do not require Parliament’s approval, Restaurants Canada is actively meeting with the Immigration Minister’s office to advocate for increased resources to address these delays.

Looking ahead: What to expect after prorogation ends

A new session of Parliament typically begins with the Speech from the Throne, where the government outlines its priorities and legislative agenda. However, Opposition parties have signaled their intention to introduce a vote of non-confidence as soon as Parliament resumes, potentially triggering an election on or shortly after March 24.

In preparation for a potential election, Restaurants Canada is engaging with all political parties to ensure that the priorities of the foodservice sector are reflected in their platforms. We will continue to advocate for our members’ interests during this critical period.

Looming US tariffs

Restaurants Canada joined a roundtable organized by the Canadian Chamber of Commerce regarding potential US tariffs. The presentation highlighted the deep integration of our economies and underscored the mutual harm tariffs would inflict on businesses in both Canada and the United States. The presentation was followed by an engaging discussion where participants from different industries expressed their serious concerns about the potential tariffs and their impact on the restaurant industry.

Participants emphasized the importance of unity in addressing these challenges, particularly when engaging with the Trump administration. They also stressed the need for the private sector to secure a strong voice in discussions with the Canadian government to ensure our industry’s interests are effectively represented.

Due to uncertainty around potential tariffs after January 20th, we recommend restaurant operators assess their supply chains and inform suppliers of critical inventory needs and concerns. If possible, consider alternative Canadian suppliers. Continued communication with suppliers will be crucial in the coming months.

Stay tuned for a follow up webinar on this evolving issue – if you missed the discussion, please take the time to view it here here.

Quebec: EEQ fee increase

Restaurants Canada, in collaboration with the Association Restauration Québec (ARQ), has met with the Éco Entreprises Québec (EEQ) to raise our significant concerns related to their 2025 fee increase and fee schedule. Not only are the fees almost twice as high as last year, the deadline for the first payment is set for January 31^st, at the worst possible time for restaurants. We are advocating for some flexibility on the payment date for our industry and for a reviewed fee increase that better reflects our industry’s capacity to absorb it.

ATLANTIC UPDATE

From Janick Cormier | Vice-President, Atlantic Canada

New Brunswick: Meeting with the new Premier

The Executive Vice President and I met with Premier Susan Holt and Deputy Premier and Finance Minister René Legacy in December.

Restaurants Canada presented an overview of the industry’s economic and social impact in New Brunswick and highlighted our need to continue immigration levels, fix the convoluted licensee discount on alcohol and make discounts competitive with neighbouring Nova Scotia.

Both the Premier and Finance Minister were supportive of our immigration ask and receptive to our licensee discount request. They are reviewing now, and we will continue to push on these issues for our members.

Nova Scotia Cabinet

Following his successful re-election bid, on December 12th, Premier Tim Houston expanded Nova Scotia’s Executive Council to 21 members. Key changes:

John Lohr (Kings North): Transitioned to Minister of Finance and Treasury Board and Minister of Labour Relations, while continuing as Minister of Municipal Affairs. He is also the Minister responsible for the Liquor Control Act and the Nova Scotia Liquor Corporation.
Barbara Adams (Eastern Passage): Appointed Deputy Premier and retains her roles as Minister of Seniors and Long-Term Care and Minister responsible for Military Relations.
Nolan Young (Shelburne): Elevated to Minister of Labour, Skills, and Immigration.
Dave Ritcey (Truro-Bible Hill-Millbrook-Salmon River): Appointed Minister of Communities, Culture, Tourism, and Heritage, with responsibilities for Gaelic Affairs.
Colton LeBlanc (Argyle): Named Minister of Growth and Development (formerly Economic Development), which now includes the housing portfolio. He continues as Minister of Acadian Affairs and Francophonie.
Brendan Maguire (Halifax Atlantic): Becomes the Minister of Advanced Education and the Minister of Education and Early Childhood Development
Fred Tilley (Northside-Westmount): Recently crossed the floor from the Liberals to the Progressive Conservatives and was appointed Minister of Public Works.
Timothy Halman (Dartmouth East): Formerly deputy premier, is now Minister of Service Efficiency (formerly the Office of Regulatory Affairs and Service Efficiency) and continues as Minister of Environment and Climate Change.

Nova Scotia Posts Transitional Rules for HST Reduction

The Nova Scotia Department of Finance and Treasury Board has released transitional rules to guide businesses and other stakeholders on the upcoming reduction of the HST from 15% to 14%, effective April 1, 2025. Detailed guidance can be found here.

Atlantic Canadian Appointments in Federal Cabinet

In a recent federal cabinet shuffle, Prime Minister Justin Trudeau appointed several Members of Parliament from Atlantic Canada to key positions:

Dominic LeBlanc (Beauséjour, New Brunswick): Assumes dual roles as Minister of Finance and Intergovernmental Affairs.
Gudie Hutchings (Long Range Mountains, Newfoundland and Labrador): Appointed as Minister of Rural Economic Development and Minister responsible for the Atlantic Canada Opportunities Agency.
Lawrence MacAulay (Cardigan, Prince Edward Island): Continues as Minister of Agriculture and Agri-Food.
Ginette Petitpas Taylor (Moncton—Riverview—Dieppe, New Brunswick): Appointed as President of the Treasury Board.
Darren Fisher (Dartmouth-Cole Harbour, Nova Scotia): Appointed as Minister of Veterans Affairs and Associate Minister of Defence
Joanne Thompson (St. John’s East, Newfoundland and Labrador): Appointed as Minister of Seniors

CENTRAL CANADA UPDATE

From Kris Barnier | Vice President, Central Canada and the North

Ontario update

Pre-budget submission – the Ontario government has opened pre-budget consultations. We are actively engaging with several relevant ministries, primarily focusing on the expansion of alcohol discount pricing for restaurants and bars, and on expanding HST relief on restaurant meals. We are also engaging the government on public safety and labour shortages. Our full submission can be found here.
Government consultation – Alcohol tax and wholesale pricing – We are continuing our efforts to secure deeper discounts for restaurants and bars purchasing alcohol products through the LCBO. We also continue to press for discounts to be expanded to include beer in January 2026, upon the expiry of the Master Framework Agreement. We are working in partnership with ORHMA and we continue to meet with key elected officials and senior government representatives from the Ministry of Finance, Premier’s Office, and other key offices.
Attention businesses with operations in Guelph–the City of Guelph has released a new Reusable Containers Survey to gather input from local businesses who offer food in single-use containers.

The city is looking for input to help inform potential amendments to the existing Single-Use Items Bylaw, including learning more about your ability to provide reusable food containers for take-away/dine-in, and accept customers’ reusable food containers.

Restaurants Canada has met with Guelph officials to share initial concerns about how a compulsory by-law could potentially impact restaurant operations.

Given the many operational, economic, and environmental considerations associated with reusable containers, we urge members to complete the survey by the January 17, 2025, deadline. It should take 5 minutes or less to complete.

Manitoba update

Continued focus on core priorities – Working closely with MRFA, we remain focused on our core objectives: expanding discount pricing for restaurants and bars purchasing alcohol for resale; landing a $3,000 per location crime grant to help restaurants and bars secure their premises and recoup costs associated with crime; and the creation of a $2,500 per trainee grant for restaurants and bars that hire workers from targeted groups.

Last year, MRFA and I met with numerous key cabinet ministers and senior staff and built positive momentum for our asks. We will continue our focus into 2025.

WESTERN UPDATE

From Mark von Schellwitz | Vice-President, Western Canada

2024 State of the Industry Christmas & Congratulations MLA letter

Just before Christmas Restaurants Canada sent a year-end State of the Industry letter to all MLAs in Saskatchewan, Alberta, and British Columbia which also congratulated all newly elected MLAs in Saskatchewan and British Columbia following the recent provincial elections. A few MLAs have since reached out to Restaurants Canada in response to discuss industry challenges and solutions.

Meeting with Saskatchewan and BC Tourism Ministers

On January 7th Restaurants Canada held an introductory meeting with Saskatchewan’s new Minister of Parks, Culture and Sport Alana Ross who is also responsible for Tourism and the Saskatchewan Liquor and Gaming Authority (SLGA). The meeting focused on providing all liquor licensees with wholesale liquor prices following a commitment made by Premier Moe last year that they would implement this once the transition to private liquor retailing was complete. We also discussed Restaurants Canada’s recommendation to implement a Saskatchewan PNP Tourism and Hospitality Stream like the AAIP Tourism and Hospitality Stream in Alberta as well as other 2024 Saskatchewan Pre-Election Submission policy priorities.

On January 14th Restaurants Canada will also be meeting with British Columbia’s new Tourism, Arts, Culture and Sport Minister Spencer Chandra Herbert to discuss Save BC Restaurants Menu of Issues including implementing a British Columbia PNP Tourism and Hospitality stream.

WorkSafe BC Gratuities as Assessed Payroll Meeting

On January 9th Restaurants Canada and our Colleagues at the BCRFA met with WorkSafe BC to discuss consultations on WorkSafe BC’s 2024 policy directive asking employers to include all direct as well as controlled gratuities as assessed payroll. In 2024 we convinced WorkSafe to postpone implementing the new policy as there was no industry input or notification of the policy directive. As a result, WorkSafe BC are starting a consultation on the proposed policy directive. We are strongly opposed to the new policy directive which will cost our members significantly more in WorkSafe BC premiums at a time they can least afford it and creates confusion between WorkSafe BC’s and the Canada Revenue Agency’s definitions of direct gratuities as it relates to payroll.

On behalf of the entire Restaurants Canada team, I wish you a strong start to the year and look forward to many exciting opportunities to connect with operators across the country.