New report says Canadian restaurants are struggling to make profits
According to a new survey, your favorite restaurant may be losing money due to slow foot traffic and rising costs.
A Report from Restaurants Canada Out Today surveyed 220 of its members about their restaurant businesses in late 2025. The results found that 26 percent of restaurants surveyed were at a loss by November 2025, while another 18 percent were at a loss.
Overall, this means that almost half – 44 percent – of respondents were not profitable, compared to 2019 when only 12 percent were in the same financial situation.
However, these figures were slightly better than in 2024, when 53 percent of restaurants surveyed were losing money or at a loss.
Kelly Higginson, president and CEO of Restaurants Canada, told CBC News, “This is a very worrying number that’s going to impact jobs. It’s going to impact turnarounds. We’re going to see more restaurants closing.”
She says restaurants are struggling with rising costs on everything from food to rent and items like cutlery.
Toronto’s dining scene has evolved over the past decade, but some in the industry say the pool for professional chefs hasn’t kept up with the demand. CBC’s Mercedes Gaztambide spoke to restaurant owners about the decline.
In the report, food and labor costs were the two factors respondents were most concerned about – 89 percent said they were concerned about labor costs and 88 said the rising cost of food was an issue.
Inflation has had a particularly large impact on food prices. The inflation rate of groceries in December was up five percent That compares to the same time last year, while the figure for commodities across the board was 2.4 percent.
‘It’s mentally exhausting’: Chef
Food economist and University of Guelph professor Mike von Massow says he’s not surprised some restaurant owners in Canada are struggling. He says the rising cost of food hits them particularly hard — both in the form of increased costs of business and because consumers feel hassled at the grocery store and may choose to eat out less often.
“Restaurants are struggling with the fact that they compete with the grocery store,” von Massow said. “If we’re pressured (on groceries), we go to restaurants less, and if they raise prices to accommodate that, they dig an even deeper hole for themselves. So it’s a really tough situation for restaurants.”
It’s a struggle Frédéric Chartier is familiar with. He’s the owner and chef of Beyond the Gate, a French restaurant in Shelburne, Ontario, but lately he’s been wearing a lot more hats. He is also a dishwasher, an accountant and a slow workerIn the old days, a server because he didn’t have enough customers spending money to employ more people.
“In eight years, you wouldn’t have thought it would be a problem and we would be able to fill that space every day, aAnd instead it’s going in the opposite direction,” Chartier said. “We’re surviving with dinner (service) it is challenging.”
Chartier says that in the years before the COVID-19 pandemicBusiness was good immediately afterwards, but has been struggling for some time now as fewer customers are walking in.ng through his door. He has since canceled his lunch and Sunday brunch service, and recently took a part-time job at a burger joint in Shelburne to help bring in more cash.
“It’s mentally exhausting,” Chartier said. “Up until three years ago, we had employees. It was great. I had a dishwasher every weekend. It was cool, it was fun. Now it’s just work, work, try to work.”
Some owners may increase prices
Restaurant owners surveyed said that with such tight margins, they expect to raise their prices an average of four percent in 2026.
higginson restaurant says in canada It’s a difficult balancing act for their members, who need to cover their costs but also retain customers who may not return if things get too expensive.
Higginson said, “We know Canadians are struggling with affordability. So we may see a four per cent increase in menu prices, but it certainly doesn’t reflect an increase in the operations of our businesses.”
She adds that some of her members are trying to avoid pulling other levers and raising prices, including offering value meals or high-end restaurants adding mid-tier options for customers who want to save.
Previous surveys by Restaurants Canada have indicated that Three out of four Canadians are going out to eat lessPartly because of cost.
Chartier says he has raised prices modestly in the past, a dollar or two at a time, to offset rising costs. But they do add up. He says a beef tenderloin that was $45 three or four years ago is now $60, even though he makes lower margins.
A few years ago, Beyond the Gate introduced a three-course “recession menu” for $30 to attract customers looking for value options, which helped their customer base last a while before “losing interest,” Chartier said.
He hopes the government can introduce measures that will help his customers with the cost of living, so they have more free cash for things like dinners out.
“Put more money in customers’ pockets so they can go out and spend it,” Chartier said.
A new report from Restaurants Canada found that three-quarters of Canadians are eating out less to save money. CBC’s Tyler Cheese has the reaction from Toronto restaurant owners who say they’re not surprised.
The report said restaurant owners surveyed got some relief from the federal government’s GST holidays in early 2025 and a strong summer of domestic tourism.
but higginsIt is hoped that more help can be received from the government. his organizationThe organization would like to remove the federal GST from all food items, including food served in restaurants.
“We operate (restaurants) in every single community in the country,” Higginson said, “which means when restaurants are suffering losses, it has a widespread impact.”
“You’ll feel it in every community,” Higginson said. “You’re going to see job losses, you’re going to see shift reductions and that will have a direct impact on the economy and the communities that we continue to serve.”
