Food is food regardless of where it comes from

In the recent budget, the government of Manitoba announced it will remove provincial sales tax from prepared meals sold in grocery stores, while continuing to apply it to the very same meals sold in restaurants.

This change is presented as an affordability measure. However, if the goal is to make food more affordable, then tax policy should reflect a simple principle: food is food.

Food is not a luxury, it is a necessity.

With just one per cent of restaurants classified as high-end or luxury dining, the reality is that the vast majority operate in the mid-market — serving as an essential part of Manitobans’ daily routines and busy lives. In fact, low-income Canadians spend a greater proportion of their income on restaurants than those with a higher income, so a tax on restaurant food disproportionately affects them.

As a matter of sound tax policy, necessities should be treated consistently, regardless of where they are purchased.

A rotisserie chicken does not change its nature depending on where it is sold. A prepared meal remains a prepared meal whether it is purchased at a grocery counter or from a neighbourhood restaurant.

Yet under this policy, one will be tax-free and the other taxed. That is not a principled approach to affordability. It is an arbitrary distinction.

The government’s stated objective is to help Manitobans manage the rising cost of living. This is both a valid and important goal. But if the intent is to reduce the cost of prepared food, there is no logical reason to limit that relief to one type of seller. Doing so ignores how Manitobans actually access food in their daily lives.

For many, convenience is not optional, it is essential.

A parent with hungry kids in the back seat, a shift worker on the way home, or a senior with mobility challenges may rely on a nearby restaurant. Taxing those options while exempting grocery alternatives does not enhance affordability, it restricts it.

Sound policy would support consumer choice by applying the same tax treatment to the same product. Food is food and the tax system should treat it that way.

This consistency also matters because of the role restaurants play in Manitoba’s economy and communities.

Restaurants generate $3.5 billion in annual sales in the province and directly employ more than 42,800 Manitobans, including 19,000 young people entering the workforce. They are the fifth largest employer in Manitoba and a vital source of first jobs, flexible employment and community gathering spaces, while supporting supply chains that extend across agriculture, food processing and distribution.

Restaurants are not peripheral to Manitoba’s economy; they are foundational to it. They are also significantly more labour-intensive, employing about three times as many workers per location as grocery stores. When tax policy shifts consumer behaviour, the impact on jobs is immediate.

History shows that consumers shift their spending when governments change how food is taxed. When the GST was introduced in 1991 and applied to restaurant meals but not groceries, restaurant sales declined in direct proportion to the new tax, and 46,000 restaurant jobs were lost across Canada.

More recently, the 2024–25 GST/HST holiday, which included restaurant meals, led to an 8.6 per cent increase in restaurant spending and supported the creation of 24,000 jobs.

At a time when 44 per cent of restaurants are operating at a loss or just breaking even, this kind of policy-driven shift has real consequences — not just for businesses, but for workers, suppliers and communities across Manitoba.

This is not about carving out special treatment for one sector. It is about applying a consistent and principled approach to taxation.

A policy that exempts a meal at a grocery store but taxes the identical meal at a restaurant falls short of that standard. It creates inconsistency, limits consumer choice and undermines a sector that plays a vital role in Manitoba’s economy.

Manitobans should not be taxed on a rotisserie chicken sold in a restaurant if the identical product is exempt from PST in a grocery store.

If the government is serious about helping Manitobans with the cost of food while protecting its economy and communities, it should apply its own logic fully and extend the PST exemption to restaurant meals.

In the end, food is food and food should not be taxed.

Kelly Higginson is the president and CEO of Restaurants Canada.