Tax holiday winds down to mixed reviews from Ottawa restaurateurs

While many restaurants in Ottawa celebrated the GST/HST holiday at its outset, some say it hasn't been as beneficial as they'd hoped.

The tax holiday, which was billed as a break for Canadians on the purchase of certain goods including prepared foods, launched in mid-December. After two months, it's set to end on Saturday. 

Restaurant sales typically drop by an average of 10 per cent in January and February, according to industry advocate Restaurants Canada. While the tax holiday offered a welcome boost during the industry's slowest time of the year, it left many restaurants hungry for more.

"I might say it helped, but not as much as I expected, unfortunately," said Magdi Bazara, owner of 3Cents Resto & Cafe in Ottawa's Heron Gate neighbourhood.

The Yemeni-Egyptian café serves traditional food and drink to a set of regulars — customers Bazara had hoped would visit more frequently during the tax holiday. But while the restaurant did see a boost compared to an earlier lull in November, business in January and February remained slower than in previous years.

Johny Bonney, assistant general manager of Lil Z's Pizza and The King Eddy in the ByWard Market, said his restaurants had a similar experience. While he said the tax break might have helped some, he didn't see enough of an increase in business to consider it a major success.

Bonney said the lull could also be caused by Canada-U.S. trade tensions and the threat of an economic recession, as well as the fact that fewer people are spending time downtown.

"I think just the general malaise that's been felt over the last few months is that people are cutting back and making tough decisions," Bonney said. "And I think restaurants are probably suffering as part of that."

While individual restaurants may not have felt as much of a boost from the tax holiday, Restaurants Canada says the numbers show the industry did benefit overall. 

"There will be differences from one restaurant to the other," said vice-president Maximilien Roy. "Our industry has had a lot of difficulties, but [the tax holiday] certainly helps."

He said sales were generally slowing down before the tax break, but once it was announced, restaurants saw an average revenue boost of 7.6 per cent.

He added there's been an 18 per cent increase in online reservations made through the platform OpenTable during the tax break, and said since November, the industry has created 35,000 additional jobs.

"It's been a very tough year," he said. "The GST holiday has been a lifeline."

While not everyone felt that, some Ottawa restaurants did benefit.

"January ... we don't see a whole lot of new clientele, so having our regulars come out, it was nice," said Anthony Epifano, owner of Merivale Fish Market.

Roy said his organization is encouraging the federal government to extend the tax holiday or make it permanent, but it will be some time before that happens.

Until then, some restaurant owners are just hoping the return of GST/HST doesn't mean a deeper lull in business, once customers see their bills increase.

"I hope that at least once the GST is back, the customer will not feel the price is increased," Bazara said.