Can Ontario businesses claim 100% of HST back on meals and entertainment?

No. Meals and entertainment expenses are subject to a 50% restriction under both the Income Tax Act (for the expense deduction) and the Excise Tax Act (for ITCs). When you pay HST on a business meal or entertainment event, you can only claim 50% of the HST as an ITC on your HST return.

For example, if you take a client to dinner and pay $600 including $67.08 in HST, your ITC is only $33.54 (50% of $67.08). The other 50% is a non-recoverable cost. This rule applies regardless of how business-related the meal or event is — it is a flat restriction, not a test of the entertainment's business purpose.

There are limited exceptions: meals provided to employees at a remote work site under specific conditions, certain subsidized meal programs, and meals provided to truck drivers under special rules may qualify for the full ITC. But for typical client entertainment and business meals, the 50% cap always applies. If you use the quick method election, this restriction is built into the formula and does not require a separate adjustment.