The recent interprovincial trade agreement has drawn sharp criticism from Canada's restaurant industry for a significant omission: food. Restaurants Canada, the leading industry group, warns that this exclusion is a severe blow to the nation's struggling food service sector.
Skyrocketing Costs and Lost Customers
Kelly Higginson, President and CEO of Restaurants Canada, explained that while progress on breaking down internal trade barriers is welcome, leaving out food does nothing to address the chronic issue of food inflation. Food inflation has outpaced general inflation for nine consecutive months, creating a perfect storm for restaurants.
On one hand, the cost-of-living crisis has caused a dramatic drop in discretionary spending. Seventy-five percent of Canadians are now eating out less. On the other hand, input costs for restaurants have soared. Food costs for food service businesses have increased by 12% over the past two years, with consistent rises even before that period.
The Patchwork Problem and the American Alternative
Higginson highlighted a critical inconsistency in Canada's internal market. A product like beef or pork deemed safe in Alberta isn't automatically accepted in other provinces. Suppliers and owners face a confusing patchwork of labeling, grading, and inspection requirements across provincial lines.
These regulatory hurdles add significant costs, making it more difficult and expensive for operators to source Canadian products. This situation is pushing restaurants toward a difficult choice. With consumer demand for Canadian products rising due to trade pressures with the United States, the internal trade barriers make it easier and cheaper to import food and alcohol from the U.S. than to procure it from within Canada.
A Sector Operating on the Brink
The financial health of the industry is precarious. Higginson revealed that a staggering 40% of Canadian food service businesses are currently operating at a loss or just breaking even. This is a dramatic increase from the pre-pandemic figure of just 12%.
This data, published on November 28, 2025, underscores the immense pressure on an industry that is Canada's fourth-largest employer. Restaurants Canada is now urgently calling on leaders to include food in interprovincial trade agreements, arguing that it is a necessary step to provide relief and ensure the sector's survival.
