Apparently before Wendy's bought them out (mid-90s) that was true, but I'm too young to remember. It certainly hasn't been true since that time. Even co-founder Ron Joyce lamented at the time about how the quality was decimated under their ownership.
> Tim Horton's real problem is that they are becoming known for bad coffee, bad donuts, and bad food
Tim Hortons' problem is that Tim Horton's daughter, who is a Tim Hortons franchisee, made some negative comments towards minimum wage workers which was mistaken to have come from Tim Hortons corporate.
The bad coffee, food, and donuts isn't anything new. They moved to the par-baked donuts in 2003 (a part of the same Wendy's push for cheapness). People were willing to overlook the bad quality for decades because they felt they were supporting an upstanding Canadian business. The aforementioned comments changed minds about that.