A temporary suspension of the GST on restaurant and take-out meals provided only a modest sales boost of just over 3%, despite costing the federal government an estimated $2.7 billion, according to new data from Statistics Canada.
Blacklock's Reporter says the GST holiday, part of Bill C-78, ran from December 14 to February 15 and aimed to ease cost-of-living pressures during the winter months.
Finance Minister Chrystia Freeland had described the move as a timely assist to families, urging swift passage of the bill just ahead of the holidays.
Statistics Canada reported total receipts for food services and drinking places reached $22.76 billion during the tax-free window — up from $22 billion over the same period the previous year, marking a 3.3% increase.
While the government framed the measure as meaningful relief, the actual spending impact appeared relatively modest in relation to its cost.
The bill, passed by Parliament on December 12, also extended GST relief to a hodgepodge of consumer goods ranging from diapers and ice cream to printed newspapers and video game consoles. But the list sparked criticism for its inconsistencies.
Senators on the national finance committee, including chair Claude Carignan, questioned the logic behind the exemptions. Christmas trees were tax-free, for instance, but not the decorations. Real guitars were taxed, but toy guitars were not. Hockey cards were taxed; Pokémon cards weren’t.
“Who was in charge of this list? What is the logic?” Carignan asked. Freeland admitted the selections were difficult, calling the approach “pragmatic” and based largely on advice that prioritized food and affordability.
Retailers were left to untangle the tax rules themselves.
Dan Kelly, CEO of the Canadian Federation of Independent Business, testified that merchants had to decide whether items like model planes or dolls were intended for children and therefore exempt, while related products such as glue or paint remained taxable — with no clear guidance from the government.