Restaurants across Canada are feeling intense financial pressure from multiple directions, with profit margins shrinking to razor-thin levels. According to Kelly Higginson, chief executive of Restaurants Canada, the average restaurant profitability currently sits at just three to five per cent, leaving operators with virtually no wiggle room to absorb rising costs.
Profit Margins Under Siege
In a recent interview, Higginson highlighted the precarious state of the industry. “With restaurant profitability sitting at just three to five per cent, there’s not a lot of wiggle room there,” she said. The slim margins mean that even small increases in expenses—such as food costs, labor, or rent—can quickly push restaurants into the red.
The financial strain is compounded by inflationary pressures on ingredients, higher wages needed to attract staff, and ongoing supply chain disruptions. Many operators are struggling to pass these costs onto customers without driving away diners.
Calgary Chef Shares Perspective
Calgary chef Matthias Fong, who runs the restaurant Primary Colours, recently participated in the Canadian Culinary Championship in Ottawa on Feb. 1, 2025. His experience reflects the broader challenges faced by chefs and restaurateurs: balancing culinary excellence with financial sustainability.
While the article focuses on Higginson’s comments, the broader context underscores that restaurants are being squeezed from all sides—rising food prices, labor shortages, and increased operating costs are eroding already thin margins.
Industry Calls for Support
Restaurants Canada has been advocating for government support to help the sector weather the storm. Higginson’s remarks serve as a reminder that without relief, many establishments may be forced to close or reduce services. The industry continues to urge policymakers to address issues such as tax burdens and regulatory costs that further strain profitability.
