Price Hikes at Restaurants During Canada’s GST/HST Relief Period Spark Controversy

From December 14, 2024, to February 15, 2025, the Canadian government implemented a GST/HST relief policy intended to stimulate consumption and promote economic recovery. This policy primarily targeted food and beverage consumption, aiming to reduce the tax burden on citizens. However, during this period, most Chinese restaurants chose to raise their prices or cancel cash payment discounts, with an average price increase of about 15%, which sparked widespread attention and discussion.

Reasons for Price Adjustments

Market Mechanism Adjustment:

With the GST/HST relief in place, consumers were expected to benefit from lower prices. Nevertheless, several restaurants preemptively raised their base prices or discontinued cash discounts during the relief period, effectively increasing the overall spending for customers, potentially leading to dissatisfaction.

Operational Cost Considerations:

The cost of raw materials and labor for restaurants did not decrease due to the tax relief. To ensure profitability during the relief period, restaurants might have raised their prices to compensate for the increased costs.

Tax Evasion Concerns:

Some citizens are concerned that restaurants are using cash discounts to conceal part of their income, and such behavior has even been reported to the Canadian Revenue Agency by the public.

Government Regulation and Policy Impact:

The government’s regulatory efforts on the relief policy seem to have been relaxed, allowing some restaurants to choose whether to participate in the relief, which may lead to inconsistent pricing in the market. The supervision and enforcement of the policy might affect consumer confidence and restaurants’ pricing strategies.

Consumer Response:

Many citizens, disappointed by not achieving the anticipated savings, believe that the price adjustments by restaurants contradict the government’s initial intention of tax reduction. This practice has impacted trust in restaurants, leading to dissatisfaction and protests.

List of Restaurants That Increased Prices

Below is a list of restaurants that raised their prices during the GST/HST relief period. Consumers who wish to fully benefit from the tax relief might consider avoiding these establishments: