British Columbia restaurants saw a bump in customers dining-in that coincides with the federal GST pause, according to a report from an industry association.
Restaurants Canada released data from OpenTable showing an 18 per cent increase nationally in dining year-over-year, with Alberta at 17 per cent and B.C. at 12 per cent.
“Seeing Albertans and British Columbians embrace the tax relief and treat themselves to a meal out is really encouraging, especially as we navigate a climate of economic uncertainty,” said Mark von Schellwitz, vice president for Western Canada at Restaurants Canada.
The group is now calling on Ottawa to abolish the five percent tax on dining-in and permanently implement the GST holiday.
Von Schellwitz explained to CTV News that last year restaurants saw their operating costs rise by 25 per cent – including spikes in the cost of insurance, utilities, and wages – while also having and lower consumer demand.
“Fifty-three per cent of restaurants are operating at a loss or barely breaking even,” said von Schellwitz.
In B.C. alone, restaurants lost 11,000 employees, and any help to avoid bankruptcy is needed, he added.
Hunnybee Bruncheonette in Vancouver was filled with customers on Wednesday afternoon.
The owner, Matthew Senecal-Junkeer, says since the GST holiday has come into effect, the restaurant has seen a seven per cent increase in sales year-over-year.
“Unfortunately, it is ending very soon, and that little boost, unfortunately, it will be temporary,” said Senecal-Junkeer, who would like to see longer-term relief for the industry.
The five per cent tax is scheduled to come back into effect on Feb. 15.
While some restaurant owners and Restaurants Canada work to convince Ottawa to scrap the tax for good, questions remain as to how the government would be able to generate the revenue associated with the tax.
Tom Davidoff, an associate professor at UBC’s Sauder School of Business, believes the options could include a reduction in services or an increase taxes elsewhere – which may leave consumers worse off.
He went on to explain that U.S. President Donald Trump’s threat to enforce tariffs on Canada could open the door to fiscal stimulus.
“You would have reduced employment and possibly increased prices overall. So that would be very bad for the economy. Fortunately, inflation is already low,” said Davidoff.
The UBC economist went on to say that in a weaker economy, fiscal stimulus is possible without generating hyperinflation, and measures like extending tax holidays should not be ruled out in 2025.
In the meantime, Wednesday marked the first day of the Dine Out Vancouver Festival, a multi-week initiative in which more than 350 restaurants offer a fixed-price menu.
The festival will end on Feb. 9.
