If you’ve been enjoying some extra savings while dining out lately, get ready for a change, because starting next week, Canada’s temporary GST/HST break will be coming to an end.
Starting on Dec. 14, 2024, Canada’s tax relief made dining out at restaurants and bars a bit more affordable. During the break, no GST or HST was charged on certain items including food, beverages, children’s clothing, and Christmas decorations.
For restaurants and bars, this meant food and drinks were tax-exempt unless you ordered certain cocktails or mixed drinks. Alcoholic beverages, such as beer, wine, cider, and sake (with an alcohol by volume of 22.9 per cent or less), along with spirit coolers and pre-mixed drinks that were seven per cent ABV or less, were exempt from tax.
However, as the break comes to an end, you’ll have to dish out regular tax rates again, and some restaurants are expecting diners to change their spending habits.
Many establishments, including Fox on John located at 106 John St., witnessed a huge surge in customers during the tax holiday.
“This was a wonderful opportunity to welcome new customers, especially during a time when many have been feeling the strain of the past few years,” said Junior Sritharan, President of Reign Company, the hospitality group behind Fox and John.
“Seeing our community enjoy this small break, allowed for guests to try different items and find a little extra joy in their extended holiday season was truly heartwarming.”
However, Sritharan highlighted some of the challenges associated with implementing the tax break mid-month.
“With such a wide range of products, programming, and services, there were a few minor technical hiccups in ensuring all eligible items were properly tax-exempt on such short notice,” he said.
“There was some confusion around non-exempt items, such as spirits, but our team was well-trained and prepared to clarify these details for guests.”
For Bao House, with locations at 171 Dundas St. W. and 5336 Yonge St., the tax break also led to a noticeable uptick in customers. To help ease the transition after the break expires, Bao House introduced a countdown promotion for its customers from Feb. 9 to Feb. 15.
“We’ve definitely noticed an uptick in customer visits and orders during the tax break holiday at Bao House. It seems that the reduced tax has encouraged people to dine out more and try different dishes they might not usually order. However, we are a bit concerned about the period after the tax break ends,” staff told blogTO.
“There’s a possibility that we might see a significant drop in customer numbers as the sudden return to regular pricing could deter some diners. That’s partly why we introduced the deals for the entire week as a countdown promotion.”
For those wanted to secure a few last affordable meals before prices go back up, Bao House is offering deals like $1.99 deep-fried tofu and $5.99 cold shredded chicken noodles with any menu item purchase over $10.
“We hope this approach will mitigate any abrupt decline in customer turnout and keep the momentum going!”
The last day to take advantage of Canada’s GST/HST break is Feb. 15, 2025.
