Thunder Bay – BUSINESS – Restaurants Canada is calling on federal parties to make the recent GST/HST holiday on food permanent, arguing the move is essential to protecting affordability for Canadians and supporting the 1.2 million workers in the foodservice industry—many of whom work in communities like Thunder Bay.
As the Canadian food sector braces for economic turbulence brought on by new U.S. tariffs, the industry’s national voice says the next federal government has an opportunity to shield local businesses and jobs by removing sales taxes on all food purchases.
According to a new sparkinsights poll*, nearly 80% of Canadians support making the GST/HST food exemption permanent, and 84% believe food shouldn’t be taxed at all. The sentiment reflects growing concerns over food affordability across the country—including in Northwestern Ontario, where food insecurity and inflation continue to strain household budgets.
Foodservice Growth Offers Hope
Recent Statistics Canada data shows encouraging signs: foodservice sales rose 7.5% year-over-year in January, with inflation-adjusted sales up 4.3%—the strongest performance since April 2023. Jobs followed suit, with 67,500 more positions added year-over-year in the sector that month, in part thanks to the temporary tax relief.
“Restaurants are more than just dining spots—they’re job creators, economic engines, and the first stop in many Canadians’ working lives,” said Kelly Higginson, President and CEO of Restaurants Canada. “Permanent food tax exemptions can ensure we don’t lose that momentum, especially in a time of rising costs and new external trade pressures.”
Thunder Bay Restaurants Under Pressure
For restaurant owners in Thunder Bay, the stakes are high. Many already operate on razor-thin margins. Nationwide, 53% of foodservice businesses are either losing money or just breaking even—up significantly from 12% pre-pandemic. Bankruptcies in the industry surged 45% in the first eight months of 2024.
“Restaurants in Thunder Bay are vital employers and community hubs,” said a regional industry observer. “They’re feeling the pressure from both ends—higher costs and reduced spending. Removing sales taxes on food would be a game changer.”
Restaurants Canada has sent platform recommendations to all major federal parties, including calls to reduce interprovincial trade barriers and lower payroll taxes—further steps that could help small-town and Northern Ontario restaurants thrive.
A Local Economic Lever
Foodservice generates $1.8 million in broader economic output per $1 million in sales and sustains more than 17 jobs per million—above the national industry average. The sector contributes roughly 4% of Canada’s GDP and pays $26 billion in taxes at all government levels.
As the U.S. rolls out new tariffs, Canadian policymakers will be under pressure to shield domestic industries. For Thunder Bay’s foodservice operators and workers, the decision on food taxation could make all the difference between surviving and shuttering.
