How to run a food truck in Canada: licences, commissaries and HST at events

A food truck puts a kitchen on wheels, and the rules treat it as both. It is a food premises for public health, a vehicle for the road, a vendor for the city and a seller for the tax office. No federal permit covers all of that. Each province and each city sets its own, so the useful question is not "what is the Canadian rule" but "who do I ask first".

What approvals does a food truck need in Canada?

The layers are much the same in every province:

• Public health approval for the mobile unit, from the local health unit or health authority.
• A municipal licence or mobile vending permit, which often sets where and when you may park.
• Fire and gas safety checks for propane and generators.
• A GST/HST account once your sales pass the small supplier limit, and a provincial sales tax account where your province has one.
• Vehicle, insurance and, in some places, a highway vending approval.

Start with the health unit where your truck is based. It decides what the build must include, and it tells you which other offices to call.

What does Ontario require inside the truck?

Ontario's Food Premises regulation has a short part for mobile food premises. In every mobile unit, food must be prepared inside the unit and served to the public by people working inside it. Only single-service articles may be used to serve the food. There must be separate holding tanks for drinking water and waste water, and each tank needs an easily readable gauge. The tank rules do not apply to a unit that sells only pre-packaged or non-hazardous food. The regulation as a whole does not apply to farmers' market food vendors, but a market may set its own conditions, and local health units may still have a say. Your health unit has the final word, so ask before you build.

Do you need a commissary?

In British Columbia, health authorities generally expect a base of operation, often called a commissary: an approved place where food is prepared and stored and where the truck is cleaned. Vancouver Coastal Health, for instance, asks applicants to name a base of operation within its area and to provide a commissary agreement. Some units that carry all the space and equipment they need may be allowed to operate without one, at the health authority's discretion. Other provinces use different words, but the question is the same: where do you fill water, empty waste and store food between shifts? Settle it before you buy the truck. The guide to food truck licences in Toronto and Vancouver goes through the two biggest city systems.

How do rules differ by city?

Parking distances, hours, zones, fees and whether spots are assigned by lottery or by first come are set by the city. A licence from one city rarely lets you work in the next. Check the bylaw for every place you plan to sell, and keep a copy of each permit in the truck. For market stalls, read selling food at farmers markets in Ontario and BC. For the wider picture of opening in a province, see how to open a restaurant in Ontario and in BC; the permit steps are similar.

How does sales tax work at events?

You collect GST or HST on taxable food and drinks wherever you sell in Canada, once you are registered. You do not have to register while you are a small supplier: your taxable sales stay at or below 30,000 dollars over four consecutive calendar quarters. A truck that works hard through a summer of festivals can pass that line quickly, and the date you cross it matters. The guide to HST registration and the small supplier rule explains how the test is counted.

The rate depends on where the sale happens. Ontario's combined HST is 13 percent, and a sale at a festival in another province carries that province's tax. In British Columbia, GST is 5 percent and PST applies separately, so read GST and PST registration for BC businesses before you cross the border. If you sell at a festival out of province, ask the organizer how vendors are expected to register and report. Quebec runs its own sales tax alongside the GST, and its rules are not covered here.

What about tips and card readers?

Almost every truck takes cards, and the tip prompt is where staff money is made or lost. In Ontario, a tip is not a wage, an employer cannot withhold or take it, and the only deductions allowed are those the Employment Standards Act permits. An employer may collect tips into a pool that is shared among employees, and may deduct a share of the credit card processing cost from a tip, but not debit or other processing fees. See the guide to the Ontario tip law and the one on BC tip pooling and gratuity rules.

A tip a customer chooses to give is not subject to GST/HST. If you add a service charge to the bill, it is. For payroll and the Canada Revenue Agency's view of controlled and direct tips, read tips on payroll. For what the reader itself costs, read Interac debit and card payment costs.

What do new trucks get wrong?

• Buying the truck before the health unit has approved the plans.
• Assuming a licence from one city works in the next.
• Missing the temporary event deadline at a festival.
• Passing the 30,000 dollar line without noticing.
• Splitting tips by hand with no record.

Keep one folder with every approval, inspection result and commissary agreement. An organizer who has to choose between ten trucks for six spots will pick the owner who can hand it over in a minute.

More guides for your business:

• How to run a coffee shop in Canada
• How to run a bar or brewpub in Canada
• How to run a bakery in Canada

More in the Canadian guides for food businesses.