AIMS: On 1 August 2001, the City of Ottawa (Canada's Capital) implemented a smoke-free bylaw that completely prohibited smoking in work-places and public places, including restaurants and bars, with no exemption for separately ventilated smoking rooms. This paper evaluates the effects of this bylaw on restaurant and bar sales. DATA AND MEASURES: We used retail sales tax data from March 1998 to June 2002 to construct two outcome measures: the ratio of licensed restaurant and bar sales to total retail sales and the ratio of unlicensed restaurant sales to total retail sales. Restaurant and bar sales were subtracted from total retail sales in the denominator of these measures. DESIGN AND ANALYSIS: We employed an interrupted time-series design. Autoregressive integrated moving average (ARIMA) intervention analysis was used to test for three possible impacts that the bylaw might have on the sales of restaurants and bars. We repeated the analysis using regression with autoregressive moving average (ARMA) errors method to triangulate our results. FINDINGS: Outcome measures showed declining trends at baseline before the bylaw went into effect. Results from ARIMA intervention and regression analyses did not support the hypotheses that the smoke-free bylaw had an impact that resulted in (1) abrupt permanent, (2) gradual permanent or (3) abrupt temporary changes in restaurant and bar sales. CONCLUSIONS: While a large body of research has found no significant adverse impact of smoke-free legislation on restaurant and bar sales in the United States, Australia and elsewhere, our study confirms these results in a northern region with a bilingual population, which has important implications for impending policy in Europe and other areas.