While some restaurants around Ottawa are celebrating the GST/HST holiday, they’re also hoping customers stick around beyond Christmas to continue taking advantage of the tax break and help curtail their dry season.
The tax break, which aims to give Canadians a measure of relief on certain goods, launched on Saturday and is set to last until Feb. 15, covering the restaurant industry’s slowest time of the year — after the holidays.
“The timing … aligns typically with a very challenging time for restaurants,” said Kelly Higginson, CEO of Restaurants Canada. “As we go into January and February, sales are on average 10 per cent lower than at other times of the year.”
Higginson said during that time, restaurants tend to buckle down to make ends meet and employees often face the consequences.
This couldn’t be coming at a more perfect time.– Kelly Higginson, CEO of Restaurants Canada
“Their shifts are cut, there’s less volume in the restaurants, they’re scrambling trying to … make ends meet during this very challenging period. So that is where we see the real benefit [of the tax holiday],” Higginson added.
Johny Bonney, assistant general manager of Lil Z’s Pizza and The King Eddy in the ByWard Market, said he knows that struggle firsthand.
“That’s been the case forever,” he said. “January just hits harder than any other month.”
But now, with meals and some drinks tax-free, he hopes more people will funnel through their doors and help boost business.
“At this point, everything we’ve been through in the last five years … I mean, we’re all for it,” Bonney said. “We’re thankful for it.”
Affordability challenges
With many Canadians battling inflation in recent years and keeping a closer eye on spending, Higginson said it’s left the restaurant industry dry.
According to data from Restaurants Canada earlier this year, 62 per cent of restaurants across the country are operating at a loss or just breaking even.
“This couldn’t be coming at a more perfect time. We have seen a challenging time with spending — a dramatic, dramatic drop in spending due to the affordability challenges Canadians have been struggling with,” Higginson said.
“This last year has been the most challenging year for restaurants, even worse off than during the pandemic.”
But now, she and others are optimistic this move by the federal government will bring in more foot traffic and ultimately help the industry finish the year on a high note.
“We think it’s just going to bring in more business for people who deserve it,” said Melanie Veenbaas, marketing and vibes director at Nan’s Parlour.
To help fill their tables, Nan’s Parlour — described as a “grandma’s dive bar” in the ByWard Market — is sticking with their Christmas theme to market the incentive.
“We’re going to spin it as a ‘ho, ho, hold the tax’ kind of scenario, and we’re going to kind of encourage people … this is your time to shine, this is your time to come out and enjoy yourself. You know, you kind of deserve it after the last year of hardship,” Veenbaas said.