Canadian Restaurant Sales Growth Masked by GST Holiday; 2026 Outlook Dims
Event summary
- Real commercial foodservice sales grew 2.4% in 2025, but are projected to decline 1.1% in 2026.
- 60% of operators reported 2025 profitability as 'worse' or 'much worse' than 2024, with 77% of quick-service operators struggling more than full-service peers.
- 44% of restaurants were operating at a loss or breaking even as of November 2025, up from 12% in 2019.
- 88% of operators cite food costs as a top concern, while 89% highlight labour costs as a growing issue.
The big picture
The Canadian foodservice industry faced a challenging 2025, with temporary relief from a GST holiday masking deeper structural issues. Rising operating costs and U.S. tariffs squeezed margins, while labour shortages worsened. The sector's $125 billion scale and role as a top employer make these trends critical for economic stability. Without policy interventions, 2026 could see further declines in profitability and operational viability.
What we're watching
- Cost Inflation
- Whether rising food and labour costs will force further operational adjustments or menu price hikes in 2026.
- Policy Impact
- How immigration policy changes will affect hiring challenges, particularly in kitchen staff roles.
- Government Support
- The likelihood of permanent GST exemptions or targeted immigration reforms to alleviate industry pressures.
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