A new forecast from Dalhousie University shows that 7,000 restaurants went out of business across Canada last year and predicts another 4,000 could close in 2026, with Ontario expected to take a significant hit.
Industry pressures are mounting on both sides of the ledger.
“The supply side, of course, you have to look at input costs, labor costs as well, changes to the temporary workers program obviously are issues for many operators,” Sylvain Charlebois, a professor and researcher at Dalhousie University said.
For Toronto restaurant owner Richard Pinto, those pressures are more than theoretical. Pinto, the owner of St Matthew’s BBQ Chicken says rising costs have touched nearly every part of his business.
“It’s not just the food, containers, aluminums, metals, anything that’s that goes into the food industry,” Pinto said. “Year-over-year, we’ve seen like 20, 30 per cent increases. That’s not normal, right? But it’s something that we have to deal with, and there’s only so much you can pass on to the customer before it becomes unbearable.”
The family-run restaurant has been in business for 30 years, but Pinto says owning a restaurant can be challenging.
“It’s a contact sport. You need to be able to ride the highs and the lows and it’s unfortunate because every restaurant has a story,” Pinto said. “Me and my wife made a commitment to this place and we’re doing everything we can to keep it open.”
Ontario hardest hit province
The Ontario Restaurant, Hotel and Motel Association (ORHMA) says many businesses are still recovering from the pandemic, and some never fully did.
“Ontario is probably facing a worse issue than the rest of the provinces the highest capacity of restaurants are located here in this province,” Tony Elenis, CEO of ORHMA.
Business improvement areas across the city are also sounding the alarm. Toronto Association of Business Improvement Areas CEO John Kiru says restaurants play a key role in driving tourism, and their loss could leave lasting gaps on the city’s streets.
“The small business, small restaurants have always been challenged more than the traditional nationals,” Kiru said. “Any increase in labor costs, any increase in product cost, etcetera is all a factor that impacts their bottom line and for many of them it is survival mode right now.”
Both industry groups are calling on governments to step in, asking for targeted tax relief and policies aimed at keeping small businesses open.
Meanwhile, industry leaders are warning that more restaurants could disappear in the coming year, which will permanently reshape Toronto’s food scene and neighbourhoods.
