Consumer spending showed no significant year-over-year increase during the first month of the GST/HST holiday, according to Moneris, Canada’s leading commerce provider.
Data from Dec. 14, 2023, to Jan. 15, 2024, compared to the same period in 2024-2025, indicated a decline in overall transactions across the country.
Across Canada, overall spending fell by four per cent, transaction count down one per cent and transaction size was down three per cent.
Sean McCormick, director of business development for data services at Moneris, said the tax break appeared to have limited impact on consumer demand.
“While the tax break aimed to spur spending, Moneris’ data shows it may have unintentionally slowed it down. With a three per cent decline in overall transaction sizes year-over-year, the data suggests that the break may not have had its anticipated effect,” McCormick said.
Some retail categories showed modest growth.
Children’s and infant apparel stores saw transaction counts rising by eight per cent, while transaction size remained unchanged
Family clothing stores experienced a modest two per cent growth in transaction size while transaction count was down four per cent.
Hobby, toy and game stores saw a five per cent decline in transaction size, while transaction count was unchanged.
Restaurants and fast-food places experienced declines in consumer spending, with restaurant transaction counts falling by six per cent and fast food dropping by one per cent. Average transaction sizes at restaurants and fast-food locations fell by five and eight per cent, respectively.
“The tax holiday brought growth to certain sectors, but for restaurants and fast-food establishments, the story was different,” McCormick said. “Our data shows a decline in both transaction count and average spend, likely reflecting post-holiday budget tightening.”
With all food at restaurants tax free, Grounded Kitchen and Coffee House owner, Amir Rahim, was hoping to see a boost in sales over the past two months.
“I think the idea of being able to save 13 per cent on certain products and, you know, at the time of year being just before Christmas and also in January, where usually pocketbooks are a little bit thinner, that it would have had more of an impact. But I haven’t seen a big spike,” Rahim said.
Some diners say the tax-free food didn’t convince them to eat out more.
“I didn’t change my habits in terms of eating out,” said Stephanie Price, a diner.
Diner Evelyn Spence adds “I would say I only ever noticed it when I was paying restaurant bills.”
For grocery shoppers like Maureen Draycott, not having to pay taxes on food items is always nice.
“I buy the same groceries that I need. And right now, I’m going to be checking that they’re Canadian-made groceries,” said Draycott.
“I don’t think it’s affected what I do at all, same old, same old,” added another shopper, Karl Marszowski.
Once the tax holiday ends, Moneris says they will have more data to understand its impact on overall spending, including Valentine’s Day.
