November 24th, 2025
In Canada, a temporary sales-tax relief known as the Tax Break for All Canadians Act came into effect December 14, 2024 through February 15, 2025, allowing qualifying food and beverage purchases (including many restaurant meals) to be exempt from federal GST/HST.
For the foodservice sector, this was a meaningful move. The tax holiday included restaurant meals, non-alcoholic beverages, beer, wine and cider up to certain alcohol-by-volume levels. Despite the boost, the tax holiday ended February 15, 2025, and there’s currently no extension planned or confirmed.
So how should restaurant operators adapt this winter without the extra boost?
Last winter’s GST/HST tax holiday boosted traffic and spending, but with no tax holiday this year, restaurants must create their own value-driven promotions to maintain sales.
Consumers remain highly price-sensitive, especially Gen Z and Millennials, making tax-inclusive bundles and loyalty-based incentives essential this winter.
Off-premise channels like takeout, delivery, and digital ordering are key revenue drivers and should be paired with targeted mid-week or off-peak deals.
Menu optimization, cost control, and focusing on high-margin items are crucial since operators cannot rely on external tax relief to support profitability.
Enhancing perceived value through experience, storytelling, and small complimentary touches helps restaurants retain customers despite full taxes.
When consumers expect a tax break and don’t get one, multiple pressures converge:
Therefore, the next few months will demand proactive strategy rather than relying on external relief.
Since you can’t rely on a government tax break, consider these approaches:
Consumers are still shifting to take-out/delivery and value deals when they dine in:
With no tax relief, internal efficiencies and smart menu design become even more critical:
Winter 2025–26 will not have the tax-holiday tailwind that many restaurants enjoyed last season. But that doesn’t mean operators are without tools.
By leaning into positioning value (not just cutting price), streamlining operations, leveraging off-premise channels, and delivering guest-experience enhancements, restaurants can navigate the absence of a tax break and still attract spending.
Last year’s GST/HST holiday (Dec 2024-Feb 2025) boosted diner activity, including reported double-digit increases in reservations during the first two weeks. Restaurants saw improved value perception, especially for casual dining and takeout, but the impact varied by region and business size.
The most effective alternative is a targeted, limited-time “tax included” or “we pay the tax” promotion, paired with loyalty rewards. This avoids the financial hit of a broad discount while still giving guests the sense of getting a deal.
