TORONTO — Ontario Finance Minster Peter Bethlenfalvy and Treasury Board president Caroline Mulroney recently announced plans for the LCBO to increase the 10-per-cent licensee discount it first introduced in 2022 to 15 per cent. Minister Bethlenfalvy also announced plans to deliver $3 billion in payroll tax and premium relief.
“Amid ongoing industry challenges, during a particularly vulnerable time, increasing wholesale discounts for restaurants and bars on LBCO purchases will significantly support those relying on alcohol sales,” says Kelly Higginson, president and CEO of Restaurants Canada. “The Ontario government has already made key moves to aid the sector, including freezing alcohol taxes, allowing alcohol delivery and takeout, and expanding the wholesale discount in 2022 — showing a strong commitment to sustaining Ontario’s restaurant industry.”
The foodservice industry employs 445,000 Ontarians across 40,000 restaurant locations, more than 14,000 of which depend on alcohol sales for a significant part of their revenue. Many Ontario full-service restaurants rely on alcohol sales for 10 to 30 per cent of their revenue, and that share is considerably higher for pubs and drinking places.
The past several years have been incredibly difficult for the foodservice industry. Pre-pandemic, 12 per cent of restaurants and bars across Canada were operating at a loss or just breaking even, a number that today stands at 53 per cent. The industry has seen food, labour, energy, insurance, and other costs rise by 20 per cent or more over the past two years alone. During the same period, real per capita spending in Ontario restaurants fell from $2,952 to $2,378 in 2024.
The looming and growing trade war with the U.S. will put additional pressure on restaurants and bars with higher operating costs and lower sales as Canadians pull back on restaurant spending in the face of income reductions and higher costs for essentials.
This announcement from the government could result in thousands of dollars per year in savings for a typical restaurant location, with the deepest savings going to drinking places, the part of the industry that is struggling the most (11-per-cent decline year-over-year in real per capita sales last year).
“Restaurants Canada has been working on expanding wholesale discounts at the LCBO for months and we thank the government of Ontario for listening. The measures announced today will help the foodservice industry remain resilient in the face of significant challenges,” says Kris Barnier, vice-president for Central Canada at Restaurants Canada.
