Food is food: It’s time to stop taxing restaurant meals in Canada
Food is essential and should not be taxed. It’s a simple truth, and one that should guide federal tax policy, yet in Canada, only some food is tax-free. Groceries are exempt from GST and HST, but restaurant meals continue to be taxed. That contradiction is costing Canadians and hurting the restaurant industry at a time when both need relief.
According to a spark*insights survey, 84 per cent of Canadians believe food should not be taxed, no matter where it’s purchased. That’s a clear message to the government: in times of economic strain, fairness in food taxation matters — not just to consumers, but to the heart of a critical sector of our economy.
Who benefits
Affordability is a top priority for the federal government, and for good reason. Canadians are facing mounting pressure from housing costs, interest rates, and rising prices at the checkout.
In this environment, removing the GST/HST from restaurant meals is a practical and targeted way to deliver relief, especially to those who rely on prepared food out of necessity, not luxury.
Whether it’s a working parent grabbing dinner between shifts, a student fuelling up on the go, or a senior relying on meal delivery, restaurant food is part of daily life for millions of Canadians.
It is a basic need in today’s economy, and yet, these meals are taxed while groceries are not. This tax distinction is outdated and unfair, and creates real economic consequences.
Economic impact
When the GST was introduced in 1991, an Ernst & Young study commissioned by Restaurants Canada found it caused a 7.3 per cent drop in restaurant sales as consumers shifted more of their food spending to grocery stores.
More recently, the GST/HST holiday in late 2024 and early 2025 provided a clear demonstration of what removing the tax can do. According to Statistics Canada, foodservice sales increased in January 2025 during the holiday.
The same two-month period also saw a net increase of over 24,000 jobs in the foodservice sector — more than the previous 12 months combined. By contrast, the two months after the tax holiday ended saw a loss of 10,300 foodservice jobs.
The data clearly shows that removing the GST from restaurant meals stimulates economic activity, protects jobs, and strengthens an essential industry.
The restaurant sector is one of Canada’s largest employers, accounting for approximately 1.2 million jobs and nearly 6 per cent of the national workforce. It’s also a critical source of employment for newcomers, youth, and workers building careers in hospitality.
With unemployment projected to rise, policies that support labour-intensive industries like foodservice will be vital to maintaining Canada’s economic resilience.
Equitable impact
Removing GST and HST from restaurant meals is also a matter of equity. Low- and moderate-income Canadians are more likely to face barriers to grocery shopping, meal prep, and access to kitchen facilities. For them, restaurant food isn’t convenience — it’s survival.
Yet, the tax system punishes them for eating in a way that fits their reality. This is not in line with a fair or inclusive approach to affordability.
This is not a call for new spending. It’s about correcting an inconsistency that is no longer defensible and penalizes Canadians for how and where they eat, undermining one of the country’s most important job creators.
The new government under Prime Minister Carney has an opportunity to do what Canadians want and what the economy needs. The government has rightly made affordability a central pillar of its agenda. Removing the GST and HST from restaurant meals is a tangible, popular, and economically sound step in delivering on that promise.
Food is food. It’s time to modernize tax policy to reflect that.
Remove the GST/HST from restaurant meals and deliver fairness and affordability to Canadians. Learn more at FoodisFood.ca.
Sponsored by Restaurants Canada
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