Dining Out in Canada to Get More Expensive as GST/HST Break Ends
Starting next week, dining at restaurants in Canada will cost more as the temporary GST/HST tax break ends. The tax exemption, which started on December 14, 2024, will officially expire on February 15, 2025.
What Was the GST/HST Break?
During the tax holiday, food, beverages, children’s clothing, and Christmas decorations were exempt from the Goods and Services Tax (GST) and the Harmonized Sales Tax (HST).
For restaurants and bars, this meant no tax was applied to most food and drinks, except for certain cocktails and spirits. Alcoholic beverages such as beer, wine, cider, and sake (with an ABV of 22.9% or less) were tax-free. Spirit coolers and pre-mixed drinks under 7% ABV were also included.
How Did Restaurants Benefit?
Many restaurants saw increased customer traffic due to lower prices. Fox on John, located at 106 John St., reported a noticeable rise in diners.
“This was a great opportunity to welcome new customers, especially during a challenging time,” said Junior Sritharan, President of Reign Company, the hospitality group behind Fox on John.
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He acknowledged the challenges of implementing the tax break mid-month. “Some confusion arose around non-exempt items, such as spirits, but our team was well-prepared to clarify details for guests.”
Preparing for the Price Increase
Some restaurants are preparing for potential drops in sales after the tax break ends. Bao House, with locations at 171 Dundas St. W. and 5336 Yonge St., introduced a countdown promotion from February 9 to February 15 to help ease the transition.
“The reduced tax encouraged more people to dine out and try new dishes,” Bao House staff told blogTO. “But we are concerned about a drop in customers once the tax returns.”
Last Chance for Tax-Free Dining
To attract customers before prices increase, Bao House is offering limited-time deals, including:
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- $1.99 deep-fried tofu
- $5.99 cold shredded chicken noodles (with any purchase over $10)
These promotions aim to keep customers engaged and lessen the impact of the price hike.
What Happens After February 15?
Once the tax break expires, regular GST/HST rates will apply to food and drinks again. Diners should expect higher bills, which could impact how often people eat out.
While the tax relief provided temporary savings, restaurant owners are now preparing for a shift in customer spending habits. Those looking to enjoy a few last discounted meals have until February 15, 2025, to take advantage of the tax-free dining period.
More…
- https://www.blogto.com/eat_drink/2025/02/eating-restaurants-canada-more-expensive
- https://retail-insider.com/retail-insider/2025/01/tariffs-to-raise-grocery-prices-in-canada-as-early-as-next-week
- https://dailyhive.com/vancouver/canada-food-price-report-2025
- https://www.overheretoronto.com/trumps-new-tariffs-on-canadian-imports-begin-saturday
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