A chilling reality has gripped Canada’s restaurant scene. As of late 2025, a staggering 44% of establishments are either losing money or simply breaking even, a dramatic shift from the industry’s health just a few years prior.
This isn’t a gradual decline; the situation is rapidly worsening. In June 2025, only 41% of restaurants faced this precarious financial position, a stark contrast to the comfortable 12% struggling in 2019.
Looking ahead, the outlook is grim. Nearly half of all foodservice operators – 46% – anticipate even lower profitability in the coming year, bracing for a period of intense financial pressure.
A temporary reprieve in the previous year, fueled by tax relief and increased domestic travel, masked the underlying issues. That support is vanishing, leaving operators exposed to the full force of escalating costs.
The squeeze on margins is relentless. A full 60% of operators reported that 2025 profitability fell short of expectations compared to 2024, a clear indication of the mounting challenges.
Quick-service restaurants are feeling the brunt of this pressure, with a concerning 77% reporting weaker-than-expected profits, significantly higher than the 58% observed in full-service establishments.
The core drivers of this crisis are painfully clear: food and labor costs are soaring. A massive 88% of operators now cite food costs as a major concern, while an even higher 89% are grappling with rising labor expenses.
Adding to the complexity, recent changes to immigration policies are casting a long shadow over the industry. Over half of restaurant owners – 55% – foresee a negative impact on their businesses.
The ability to find and retain kitchen staff is particularly threatened, with 57% of operators predicting that the policy changes will exacerbate existing labor shortages.
These converging pressures paint a picture of an industry on the brink, desperately seeking solutions to navigate a turbulent economic landscape and secure its future.
