Fighting for tax fairness on food
Fighting for tax fairness on food
Restaurants Canada’s fight for food tax fairness has heated up over the past few weeks, with “affordability” measures being introduced in three provinces to provide sales tax exemptions on food sold in grocery and convenience stores, but not in restaurants. Measures such as these are not a tax cut on food – they represent a tax shift between competitors that creates winners and losers. They only provide relief if consumers change where they purchase their food, favouring one type of seller over another even when the product is identical. We are reminding governments across the country of the restaurant industry’s contribution as a major economic driver and job creator that needs to be supported through smart policies.
It’s imperative that we make a strong stand against unfair policies like these that give a competitive advantage to big-box grocers in the name of affordability relief and dissuade other provinces from following suit. At the same time, we will continue to advocate with the federal government for a GST exemption on all food.
Manitoba
Since the Manitoba budget was tabled on March 24 with a PST exemption on prepared food sold at grocery and convenience stores, we have been pushing back hard.
We met with Finance Minister Adrien Sala and had several conversations with his office and with the Premier’s Chief of Staff. We wrote to all MLAs on the issue, and our criticism of the policy was cited multiple times during debate in the provincial Legislature. Our op ed on the issue was published by the Winnipeg Free Press. Last week, after Premier Kinew refused our repeated requests for a meeting, we called him out in a news release for refusing to engage us on a matter of such fundamental importance. The government then pushed the bill implementing the measure through the Legislature before any further conversations with our industry could happen.
Quebec
On May 25, Quebec Premier Christine Fréchette held a news conference to announce that the government will remove the QST on several food products. Like with Manitoba, the measure is meant to address affordability concerns, targeting ready-to-serve fruits and vegetables, such as fruit salads and cut vegetable platters, and certain foods that are already tax-exempt but become taxed because of size or quantity, such as muffins sold individually. The measure comes into effect on July 15.
The announcement stemmed from a commitment made by the Premier during her leadership campaign. Restaurants Canada wrote to the Premier and Finance Minister Eric Girard to encourage them to ensure that any measure they would propose targeting food inflation be fair to restaurants operating in Quebec.
Ontario
The opposition NDP in Ontario took a page from the Manitoba NDP government, proposing a similar HST exemption for grocery stores. We engaged the NDP Leader and the relevant caucus members to educate them about the folly of their proposal. At the same time, we raised our opposition to the measure with the government, and we were pleased to see the NDP bill defeated almost immediately.
Restaurants Canada Awards of Excellence – Nominate today
If you haven’t already, we invite you to recognize the innovators, leaders and changemakers in your community whose impact deserves to be celebrated and amplified by nominating them for the Restaurants Canada Awards of Excellence. The nomination deadline is June 26, 2026, at 11:59 PM ET.
On-demand webinar: Youth engagement
As part of our new Belong Here: A Toolkit for Attracting and Retaining Youth, we’re pleased to offer Restaurants Canada Members exclusive access to our latest On-Demand Webinar, featuring insights from Kibbi Technologies Inc., First Work and Restaurants Canada.
This webinar recording brings together resources and insights to help members build on the sector’s position as Canada’s leading employer of youth. Whether you’re looking to strengthen your hiring strategy, improve youth engagement, or stay ahead of workforce trends shaping the industry, this webinar offers valuable takeaways and actionable resources tailored specifically for our members.
FEDERAL UPDATE
From Matt Triemstra | Vice-President, Federal Affairs
Federal Pre-Budget Submission 2026
Restaurants Canada has made recommendations in our submission to the House of Commons Finance Committee for consideration to be included in the 2026 Federal Budget in the fall. Canada’s restaurant industry is a jobs and economic powerhouse. We generate $125 billion in annual sales, accounting for 4% of Canada’s GDP, and employ 1.2 million workers, including 480,000 youth. But our industry is also under growing financial strain, as persistent affordability challenges, rising operating costs, and uneven consumer spending continue to erode profitability. We need smart policies from the federal government to reduce the cost burden on operators and improve conditions for investment and growth. Download Restaurants Canada’s full Pre-Budget Submission here.
Ottawa Meetings
With only three weeks left before Parliament’s summer break, we are working hard in Ottawa to build political champions. Our team recently held key meetings with MPs Amandeep Sodhi, Vince Gasparro, Blaine Calkins, and Frank Caputo. We also joined a virtual meeting with the Deputy Minister of Immigration, Refugees and Citizenship Canada. During the meeting, we highlighted our industry’s economic impact and the labour shortages we are experiencing in rural, remote, and tourism areas, while pushing for broader immigration solutions targeting our industry’s unique needs.
We participated in an informal consultation with Employment and Social Development Canada (ESDC) officials managing the Canadian Occupational Projection System (COPS), which forecasts national labour shortages over the next 10 years. With our industry facing up to 105,000 vacancies by 2030, this government-requested meeting signals that our workforce needs are being taken seriously. We were able to directly share details about the severe labour challenges restaurants are facing.
National Food Security Strategy
Restaurants Canada is preparing an official submission for the federal government’s new National Food Security Strategy. This is an important opportunity to address fundamental issues related to rising food costs. The government has specifically asked for our input given that our industry is the biggest buyer of Canadian agriculture products. Our submission will focus heavily on supply chain issues, food waste, and other cost drivers like EPR. We have been actively engaging members to ensure that restaurants’ lived experiences guide our final recommendations.
SUSTAINABILITY UPDATE
From Jillian Rodak | Vice-President, Sustainability
Advocacy on the Federal Plastics Registry
Restaurants Canada met with Environment and Climate Change Canada (ECCC)’s Plastics Regulatory Affairs Division to discuss the consultation on the Federal Plastic Registry (FPR). We continue to urge ECCC to contain the FPR to phase 1 requirements in their upcoming Notice to support a smooth rollout before considering phases 2 and 3. We underscored the risk of poor-quality data results if the FPR expands too quickly, and the need to limit reporting requirements to data already tracked by producers through EPR programs. ECCC was receptive to our concerns, and we are following up with a written submission to ECCC on this issue.
Vancouver natural gas by-law repealed
On May 21, Vancouver City Council passed a motion by the Mayor to repeal a by-law banning the replacement of gas water heaters as of January 1, 2027, and to move towards ending other Vancouver regulations that ban natural gas in new construction.
The motion also includes harmonizing Vancouver building by-laws with the B.C. Building Code. However, the province has indicated they are reviewing aspects of the provincial Energy and Zero Carbon Step Codes which may result in further provincial changes. The results of the review will be available in the Fall and Restaurants Canada and our partners at the Coalition for Affordable Dependable Energy will continue to monitor and advocate for choice in heating and energy for restaurants.
ATLANTIC CANADA UPDATE
From Janick Cormier | Vice-President, Atlantic Canada
Halifax Patio Fees
Halifax Regional Municipality Council unanimously passed a motion from Mayor Andy Fillmore which directs the City staff to prepare a report reviewing the fees charged for Sidewalk Patio Permits and provide options to reduce or eliminate those fees. Mayor Fillmore quoted Restaurants Canada data in making the case to Council. We look forward to working with Council on reducing patio fees to our members in HRM.
New Nova Scotia Licensee Regulations
New regulations released by the provinces contain some wins for our industry that Restaurants Canada has long advocated for:
- Infusion of liquor is now allowed
- Minors are allowed to serve in lounges until 10pm
- The removal of the perquisite to apply to Alcohol, Gaming, Fuel and Tobacco (AGFT) for approval of an underage performer
- The removal of the perquisite to apply to AGFT for selling alcohol for take away – including mixed cocktails.
Please review this member update from last week for more details. We will continue to advocate for allowing batching of cocktails, transferring of alcoholic product between establishments owned by the same licensee, and for greater licensee discounts.
Nova Scotia Security Staff Regulations
Following the adoption of legislation mandating training and criminal record checks for all door and security staff in pubs and bars in Nova Scotia, the government has finally released the accompanying regulations that dictate how this will be implemented. Security staff will now be required to:
- Complete security and responsible alcohol service training programs (offered for free)
- Wear clothing (hat, shirt, etc.) that clearly identifies them as security employees while performing their duties
- Perform their duties of security in a way that does not compromise public safety
- Provide a clean criminal record.
The regulations also include stipulations regarding notifications to AGFT where licensees must notify AGFT within 10 days of:
- First responders’ presence at their licensed premises in relation to an incident involving a patron in or about the premises.
- Any allegation of use of excessive force by a security employee
- The licensee has information indicating that a security employee has been convicted of OR charged with an offence under the Criminal Code of the Controlled Drugs and Substance Act.
AGFT has assured Restaurants Canada that it will undertake an education-first approach and that they will not be imposing penalties in the first few months of this coming into force.
New Brunswick Licensee Liquor Pricing
Restaurants Canada has long advocated for greater liquor discounts for licensees across Canada. New Brunswick’s rebate system is the only system of its kind in the country and rewards the large players while ignoring seasonal and small operators’ needs.
We have been going full steam ahead on our ask that the province implements a 15% flat-rate discount on all liquor products purchased by licensees. I have recently met with the entire Progressive Conservative Caucus, the Minister of Tourism, the Minister of Small Businesses, the Minister of Agriculture and even the Minister of Health during his visit to my area of the province. We had already met with the Premier and her office on this, but while she was in Richibucto for an announcement, I took the opportunity to bring her and her team food from a member’s restaurant and reminded her that we continue to push for better operating conditions in the province. Of note, the three other Atlantic provinces have a flat 10% discount, making New Brunswick an outlier on this issue.
CENTRAL CANADA UPDATE
From Kris Barnier | Vice-President, Central Canada and the North
Governments of Canada and Manitoba launch $4M Building Up Manitoba Program (BUMP)
Small and medium-sized enterprises with fewer than 500 employees make up 99% of Manitoba businesses and are a key part of Manitoba’s economy. The Building Up Manitoba Program (BUMP) will provide eligible businesses with up to $100,000 to support employee training, workforce upskilling, and the development of comprehensive human resources strategies. The employee training stream will provide up to $10,000 per employee to support upskilling or reskilling for current employees, helping them move into better jobs. It also supports training that helps laid-off, unemployed or underemployed individuals secure full-time, permanent employment.
The human resources strategy development stream offers up to $25,000 to help businesses assess workforce needs, develop effective training plans and implementing strategies that support long term growth and resilience.
The program is open to businesses with fewer than 500 employees. For more information click here.
Sending a Clear Message to the Ontario Government
As Ontario restaurants continue to face mounting costs driven directly and indirectly by government action and inaction, we have been working aggressively to ensure the government understands the severe pressures confronting our industry. We have emphasized that Ontario restaurants now operate with the lowest pre-tax profit margins in Canada at the location level.
In particular, we have raised several urgent concerns:
- Bill 105 — Legislation that, if passed, would create new obligations for restaurants related to employee uniform and laundering costs. Labour, Immigration, Training and Skills Development Minister David Piccini personally contacted us to acknowledge our concerns regarding Bill 105 and confirmed that the government understands the challenges facing our industry and intends to respond favourably to the serious concerns we have raised.
- Rising EPR costs — Member data indicates that Extended Producer Responsibility (EPR) costs increased by an average of 339% between 2020 and 2025, rising from approximately $1,600 per location to nearly $7,000 per location. For the average Ontario restaurant unit, this represents approximately 17.4% of pre-tax profit. We met with the Office of the Minister of the Environment, Conservation and Parks to present this data outlining the significant impact of rising EPR costs on restaurants. While no specific measures were discussed, ministry staff indicated that the department is actively exploring options to help mitigate these costs. We will continue advocating aggressively on this issue and keep members informed of developments.
- Labour shortages — As restaurants in rural, remote, and tourism regions continue to struggle with staffing shortages, the Ontario government has not yet indicated whether it will accept the federal government’s offer to temporarily expand the TFW program. We have met with Minister Piccini’s staff to discussion labour shortages and youth unemployment, and the minister has committed to meeting with us again in person in the near future.
- Alcohol pricing and procurement concerns — we have not seen meaningful progress on the government’s commitment to address unfair pricing for licensees related to Beer Store products. Members are also reporting higher costs for premium wines following the introduction of the new LCBO pricing regime. Ontario licensees continue to pay significantly more for many alcohol products than their counterparts in Alberta and British Columbia, while restaurants are also experiencing ongoing procurement and customer service challenges following recent service changes. We met with the Ministry of Finance to raise ongoing member concerns and to again press the government to act urgently to deliver fairness, improve service, and ensure Ontario licensees have access to the best pricing in Canada.
It is clear that our message is being heard across government, and we are continuing to work with the Premier’s office on arranging a meeting with Restaurants Canada in the coming weeks to discuss these concerns directly. We have also received outreach from several ministerial offices.
WESTERN CANADA UPDATE
From Cheryl Maitland Muir | Vice-President, Western Canada
B.C. allowing licensee to licensee alcohol sales
As announced last week, B.C. has approved licensee-to-licensee alcohol sales, allowing restaurants to purchase directly from private retailers through a three-year pilot. This change improves access to unique and specialty products, helping operators differentiate their offerings and meet evolving customer demand. The added flexibility also helps restaurants respond to peak demand by restocking quickly.
Restaurants Canada has long advocated for this change on behalf of our members to support supply chain and business resilience. More information can be found here.
B.C. Minimum Wage Increase
Reminder that effective today, June 1, B.C.’s minimum wage will be increasing to $18.25 keeping inline with the provincial policy to keep minimum wage increases on pace with inflation. We continue to press government on restaurants operating realities and the implications of the various government-imposed cost increases. More information can be found here.
FIFA Reminders
With days to go before the kick off for FIFA World Cup 2026, restaurant operators are reminded to be prepared for shifting demands and consumer habits. The LDB has issued recommendations to wholesale customers on how to prepare, including ordering early and building inventory if possible. You can find more information here.
If you have operations near BC Place, be sure to know about road closures in your area, as well as the impacts on supplier deliveries and platform delivery service providers. Contact LDB Wholesale Operations directly to understand how road closures may impact delivery schedules.
Alberta Immigration Oversight Act Stakeholder Engagement
On May 28th, Restaurants Canada participated in a virtual stakeholder engagement session with the Ministry of Jobs, Economy, Trade and Immigration on the implementation of the Alberta Immigration Oversight Act. The new legislation, which has now passed, will require employers of Foreign Workers to register with the Provincial Government and comply with new provincial rules and oversight in addition to your federal obligations.
Restaurants Canada is encouraging the government to avoid duplicative processes and administrative requirements for businesses and where possible to leverage information and forms already provided through the federal TFW and LMIA process. Restaurants Canada will be submitting written feedback in addition to participating in the virtual roundtable.
With gratitude,
Kelly Higginson
