Federal Government’s Decision to Cap Alcohol Excise Tax Cheers the Restaurant Industry

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A Crucial Relief for Restaurants and Consumers Amid Economic Challenges

Restaurants Canada has extended its heartfelt thanks to the Federal Government for its decisive action to cap the alcohol excise tax at 2%. This move, long championed by the organization to aid the struggling foodservice sector, has been met with widespread approval for recognizing and addressing the industry’s challenges.

Kelly Higginson, President and CEO of Restaurants Canada, highlighted the immense pressure restaurants have faced in recent years, with 62% of Canadian establishments either operating at a loss or just breaking even—a stark contrast to the 12% pre-pandemic figure. He underscored the vital role restaurants play beyond business ventures, serving as community hubs that foster dreams, passions, and social connections.

“The cap on the alcohol tax gives operators a chance to catch their breath. For the past four years, restaurants have been delt one blow after another,” said Kelly Higginson, President and CEO of Restaurants Canada. “Our most recent data shows 62% of restaurants in Canada are operating at a loss or barely breaking even, compared to 12% pre-pandemic.  These establishments are not just businesses; they are the heart of our communities, representing dreams, passions, and social connections.”

The decision to cap the excise tax comes at a critical time when restaurants are grappling with skyrocketing operational costs driven by food prices and unprecedented inflation levels. This measure is seen not only as a lifeline for restaurant operators but also as a win for Canadians who value social engagements over meals and drinks.

It reflects the success of concerted advocacy efforts by Restaurants Canada alongside a coalition comprising brewers, unions, consumer groups, farmers, and retailers, highlighting the collective voice’s power in effecting positive change.

Special thanks were extended to the Minister of Small Business, Rechie Valdez, and Finance Minister Chrystia Freeland, for their diligent efforts in supporting the file and demonstrating the government’s commitment to assisting the restaurant industry through these challenging times.

This policy adjustment is celebrated by Restaurants Canada members across the nation, from large cities to small towns, marking a significant step towards economic recovery and sustainability for the foodservice sector.

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