A recent forecast from Dalhousie University indicates that the Canadian restaurant industry is facing significant challenges, with 7,000 restaurants having closed last year alone. There are predictions that an additional 4,000 restaurants may shut down by 2026, with the province of Ontario expected to experience the most severe impacts.
The pressures affecting the industry are substantial. On the supply side, rising input costs, increased labor expenses, and changes to the temporary workers program are all significant challenges for operators. Sylvain Charlebois, a professor and researcher at Dalhousie University, emphasized the urgency of these issues, stating that they compound the difficulties faced by restaurant owners.
Richard Pinto, the owner of St. Matthew's BBQ Chicken in Toronto, highlights the tangible impact of these rising costs on his business. Pinto notes that costs have surged across almost every aspect of the food service industry, including food items, containers, and materials. He reported year-over-year increases of 20 to 30 percent, a trend he describes as unsustainable. Pinto expressed concern over the limits of how much of these increased costs can be passed on to customers before it becomes unbearable for them.
St. Matthew's BBQ Chicken has been serving the community for 30 years, but Pinto acknowledges the ongoing challenges of running a restaurant. He characterized the restaurant industry as a "contact sport," requiring resilience to endure both the peaks and valleys of business. Pinto and his wife are committed to preserving their family-run establishment, doing everything in their power to keep it operational amidst these tough conditions.
Ontario Faces Unique Challenges
The Ontario Restaurant, Hotel and Motel Association (ORHMA) reports that many restaurants are still grappling with the aftereffects of the COVID-19 pandemic, and some have not fully recovered. Tony Elenis, the CEO of ORHMA, noted that Ontario, which has the highest concentration of restaurants in Canada, faces more severe challenges than other provinces.
Business improvement areas throughout Toronto are also raising alarms about the situation. John Kiru, CEO of the Toronto Association of Business Improvement Areas, stressed the crucial role that restaurants play in tourism and urban vitality. He warned that the loss of these establishments could create lasting voids in the city's streetscapes.
Kiru further pointed out that small businesses and restaurants are disproportionately affected compared to larger national chains. Rising labor costs and product prices are all factors contributing to financial strain, pushing many establishments into "survival mode." The ongoing difficulties emphasize the precarious situation that small restaurants currently find themselves in.
To counter these challenges, both ORHMA and other industry groups are urging government intervention. They are advocating for targeted tax relief and policies designed to support the survival of small businesses in Ontario. In light of the potential for further restaurant closures in the coming year, industry leaders warn that the culinary landscape and neighborhood dynamics in Toronto could be irrevocably altered.
