Key Takeaways:
- 7,000 restaurants went out of business across Canada last year, with another 4,000 predicted to close in 2026
- Ontario is expected to be the hardest hit province, with the highest number of restaurants at risk of closure
- Rising costs, including labor and input costs, are major contributors to the industry’s struggles
- Industry leaders are calling for targeted tax relief and policies to support small businesses and keep them open
- The loss of restaurants could have a lasting impact on Toronto’s food scene and neighborhoods
Introduction to the Crisis
The Canadian restaurant industry is facing a significant crisis, with a new forecast from Dalhousie University predicting that 7,000 restaurants went out of business across the country last year, and another 4,000 could close in 2026. This is a alarming trend that is expected to have a major impact on the industry, particularly in Ontario, which is predicted to be the hardest hit province. The forecast is a warning sign for the industry, and it highlights the need for urgent action to support small businesses and prevent further closures.
Industry Pressures
The restaurant industry is facing pressures on both sides of the ledger, with rising costs and changing market conditions making it difficult for businesses to stay afloat. According to Sylvain Charlebois, a professor and researcher at Dalhousie University, the supply side of the industry is facing significant challenges, including input costs, labor costs, and changes to the temporary workers program. These pressures are not just theoretical, but are being felt by restaurant owners across the country, who are struggling to keep their businesses open in the face of rising costs and declining revenue.
Real-World Impact
For Toronto restaurant owner Richard Pinto, the pressures facing the industry are all too real. Pinto, the owner of St Matthew’s BBQ Chicken, has seen his costs increase by 20-30% year-over-year, making it difficult to keep his business open. The family-run restaurant has been in business for 30 years, but Pinto says that owning a restaurant is a challenging and unpredictable business. "It’s a contact sport," he says. "You need to be able to ride the highs and the lows, and it’s unfortunate because every restaurant has a story." Pinto and his wife are committed to keeping their restaurant open, but it’s clear that the industry is facing significant challenges.
Ontario’s Struggles
Ontario is expected to be the hardest hit province, with the highest number of restaurants at risk of closure. According to Tony Elenis, CEO of the Ontario Restaurant, Hotel and Motel Association (ORHMA), many businesses are still recovering from the pandemic, and some never fully did. The province’s high capacity of restaurants makes it particularly vulnerable to industry downturns, and the loss of restaurants could have a lasting impact on the province’s food scene and neighborhoods. Business improvement areas across the city are also sounding the alarm, warning that the loss of small restaurants could leave lasting gaps on the city’s streets.
Call to Action
Industry leaders are calling on governments to step in and provide targeted tax relief and policies aimed at keeping small businesses open. The Toronto Association of Business Improvement Areas CEO John Kiru says that small restaurants are disproportionately affected by increases in labor costs and product costs, and that many are operating in "survival mode." The loss of these businesses could have a significant impact on the city’s food scene and neighborhoods, and it’s clear that urgent action is needed to support them. By providing targeted support and relief, governments can help to prevent further closures and ensure that the industry remains vibrant and diverse.
Conclusion
The Canadian restaurant industry is facing a significant crisis, with rising costs and changing market conditions making it difficult for businesses to stay afloat. The forecast from Dalhousie University is a warning sign for the industry, and it highlights the need for urgent action to support small businesses and prevent further closures. By providing targeted tax relief and policies aimed at keeping small businesses open, governments can help to prevent further closures and ensure that the industry remains vibrant and diverse. It’s clear that the loss of restaurants could have a lasting impact on Toronto’s food scene and neighborhoods, and it’s up to industry leaders and governments to take action to prevent this from happening.