Canada’s restaurant industry is facing mounting financial pressure, with nearly half of operators either losing money or barely breaking even, according to Restaurants Canada.
In an interview with Retail Insider, president and CEO Kelly Higginson said 44 per cent of restaurants were in that position as of November 2025, a sharp increase from pre-pandemic norms when roughly 10 to 12 per cent struggled to turn a profit. She said rising operating costs, including tariff-related pressures, have squeezed margins at the same time consumers are pulling back on discretionary spending amid ongoing affordability concerns.
While a temporary GST holiday earlier in the year provided a short-term lift in sales and job creation, Higginson said many operators were unable to translate higher traffic into stronger bottom lines because expenses continued to climb. She noted that 60 per cent of restaurants reported profitability in 2025 was worse than expected.
Higginson said the industry is unlikely to see sudden waves of closures due to long-term lease obligations, but warned financial strain is building. She is urging the federal government to permanently remove GST on food, adjust workforce policies in tourism-dependent regions and address broader cost pressures, including taxes and employment insurance premiums, to stabilize the sector.
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