A new forecast from Dalhousie University reveals alarming statistics regarding the restaurant industry in Canada. Approximately 7,000 restaurants closed their doors last year, with predictions indicating that another 4,000 could face the same fate by 2026. The province of Ontario is anticipated to experience the most substantial impact, raising concerns among industry stakeholders.
Industry pressures are intensifying on multiple fronts. Sylvain Charlebois, a professor and researcher at Dalhousie University, outlines that various factors contribute to the challenges, particularly focused on input costs and labor expenses. Changes to the temporary workers program have exacerbated these issues for many restaurant operators, creating a complicated landscape for sustaining business.
Richard Pinto, owner of St. Matthew’s BBQ Chicken in Toronto, exemplifies the real-world implications of these pressures. Pinto has noticed that rising costs affect nearly every area of his business. “It’s not just the food; containers, aluminum, metals—anything that goes into the food industry. Year-over-year, we’ve seen 20 to 30 percent increases. That’s not normal,” Pinto stated. He elaborated that there is a limit to how much these costs can be transferred to customers before it becomes unbearable for them to continue patronizing restaurants.
Having operated for 30 years, Pinto emphasizes the challenges of restaurant ownership, likening it to a “contact sport” where resilience through fluctuating highs and lows is essential. He shared, “Me and my wife made a commitment to this place and we’re doing everything we can to keep it open,” indicating her steadfast dedication amid industry turmoil.
Ontario Faces Severe Challenges
The Ontario Restaurant, Hotel and Motel Association (ORHMA) highlights that many establishments are still grappling with the aftermath of the pandemic, with some never fully recovering. Tony Elenis, CEO of ORHMA, noted, “Ontario is probably facing a worse issue than the rest of the provinces; the highest capacity of restaurants is located here in this province.” This indicates that the sheer volume of restaurants in Ontario compounds the challenges faced by individual businesses.
In Toronto, business improvement areas are raising alarms over the potential consequences of restaurant closures. John Kiru, CEO of the Toronto Association of Business Improvement Areas, asserts that restaurants significantly contribute to tourism and the city’s vibrancy. The closure of these establishments could create long-term voids in local neighborhoods. “The small business, small restaurants have always been challenged more than the traditional nationals,” Kiru remarked. He further explained that any increase in labor or product costs hampers small restaurants considerably, leading many into survival mode.
Both the ORHMA and various industry representatives are urging government intervention. They advocate for targeted tax relief and policies designed to support small businesses and mitigate the risk of closures. With current trends suggesting that more restaurants may vanish in the upcoming year, the potential reshaping of Toronto’s culinary landscape could have enduring effects on local communities and dining culture.
