CRA treats the cost of gift cards redeemable at a supermarket as food and beverage expense

S. 67.1(1) denies the deduction of 50% of the cost of food and beverages, and an exemption from this rule in s. 67.1(2)(a) appears to be restricted mostly to restaurants, bars and caterers rather than to any purchase made in the ordinary course of business.

CRA considers that the cost of gift cards purchased for promotional purposes (e.g., to thank customers who attend marketing presentations) will be treated as a food and beverage expenditure subject to the 50% limitation if the cards are "exchangeable for merchandise in an establishment that is primarily engaged in selling foods and beverages," e.g., a supermarket (unless the business can establish that in fact the cards were exchanged for something else).

Neal Armstrong. Summary of 4 November 2014 T.I. 2014-0521211E5 F under s. 67.1(1).