Major Restaurant Closures Looming for Canada in 2026

A recent prediction from Dalhousie University reveals that 7,000 restaurants closed their doors across Canada last year, and it estimates that another 4,000 could shut down in 2026, with Ontario likely facing the brunt of the impact.

Challenges are growing on all fronts for the industry.

“On the supply side, you have to consider input costs and labor expenses as well; changes to the temporary workers program are significant concerns for many operators,” said Sylvain Charlebois, a professor and researcher at Dalhousie University.

For Richard Pinto, who owns a restaurant called St Matthew’s BBQ Chicken in Toronto, these issues are very real. He mentions that rising expenses have affected nearly every aspect of his business.

“It’s not just food; containers, aluminum, metals-everything involved in the food industry has increased,” Pinto explained. “Year-over-year, we’ve seen like 20 to 30 percent hikes. That’s not normal at all! But it’s something we have to face. There’s only so much we can pass on to customers before it gets too tough.”

This family-owned eatery has been around for three decades, but Pinto admits running a restaurant is no easy feat.

“It’s a contact sport. You need to navigate both ups and downs; it’s unfortunate because every restaurant has its own story,” Pinto shared. “My wife and I are committed to this place and doing everything possible to keep it going.”

Ontario Faces Toughest Challenges

The Ontario Restaurant, Hotel and Motel Association (ORHMA) reports that many establishments are still trying to recover from the pandemic’s effects, with some never fully bouncing back.

“Ontario seems to be dealing with a more severe situation than other provinces since it’s home to the highest number of restaurants,” stated Tony Elenis, CEO of ORHMA.

Business improvement areas throughout Toronto are also raising alarms. John Kiru, CEO of the Toronto Association of Business Improvement Areas says that restaurants play an essential role in attracting tourists; losing them could create lasting voids on city streets.

“Small businesses and local eateries always face more hurdles than larger chains,” Kiru noted. “Any increase in labor or product costs affects their bottom line significantly; many are currently just trying to survive.”

Both industry organizations urge government action for targeted tax relief and policies designed to help small businesses remain viable.

Meanwhile, industry leaders warn that even more restaurants may close over the next year which would permanently alter Toronto’s culinary landscape and communities.

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