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Forecast: Canada lost 7,000 restaurants in 2025, and another 4,000 could close in 2026, with Ontario hit hardest

Forecast: Canada lost 7,000 restaurants in 2025, and another 4,000 could close in 2026, with Ontario hit hardest

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A new forecast from Dalhousie University says about 7,000 restaurants shut down across Canada last year, and projects a net decline of roughly 4,000 more in 2026, with Ontario expected to face a significant share of the impact.

 

In a CityNews report, Dalhousie professor and researcher Sylvain Charlebois pointed to mounting pressure from rising input and labour costs, alongside softer consumer spending.

 

Toronto restaurant owner Richard Pinto said cost increases have spread beyond food to packaging and other supplies, while noting there is a limit to how much price pressure can be passed on to customers.

 

Industry groups and local business associations in Ontario have warned that many operators are still recovering from the pandemic era, and that restaurant closures can leave long-lasting gaps in commercial streets and the city’s tourism ecosystem.

Separate Restaurants Canada research has also highlighted food and labour costs as top challenges, with a large share of operators breaking even or operating at a loss, and many Canadians reducing restaurant visits due to household budget constraints.