Official statistics will eventually reflect this contraction, but only after the fact

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According to official figures, Canada’s restaurant sector appears remarkably resilient. The number of food service establishments has climbed steadily since the pandemic, surpassing pre-2020 levels and suggesting a sector that has not only recovered, but expanded. On paper, the industry looks stable.

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On the ground, it does not.

Based on current cost trajectories, balance-sheet conditions, and consumer behaviour, we expect Canada to lose roughly 4,000 restaurants on a net basis in 2026. This adjustment is already underway, even if it is not yet visible in headline statistics.

The lived reality of Canada’s restaurant economy tells a very different story — one defined by margin compression, rising fixed costs, softening demand, and mounting financial fatigue. Speak with operators, suppliers, landlords, insurers, or lenders and a consistent picture emerges: Closures are accelerating, balance sheets are deteriorating, and survival increasingly depends on short-term coping strategies rather than long-term viability.

The problem is not that restaurants are failing suddenly. It is that the sector has been operating in a prolonged state of economic stress since 2021, masked temporarily by extraordinary........

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