Why are restaurant costs still rising in Canada, and what is already set for 2027?

If your costs feel higher than your sales can carry, you are not imagining it. Restaurants Canada, the industry association, reports that food and labour remain the biggest pressures on independent operators in 2026, and its surveys show a large share of businesses earning less than they did a year ago. Here is what is already scheduled for 2027, and which costs you can still move.

What do operators say is driving costs in 2026?

In Restaurants Canada's first-quarter 2026 report, 91 percent of operators named food costs as a pressure and 87 percent named labour. In the same report, 69 percent said customers were dining out less because of affordability. Those are survey answers from operators, not audited accounts, but they point the same way as every other source.

Profitability is the sharpest symptom. The first-quarter report found 36 percent of operators at a loss or breaking even, and the later second-quarter report put that figure at 41 percent. It also found that 64 percent of operators said their profitability was lower than the year before. Quick-service businesses reported the steepest declines in the first-quarter report, at 81 percent against 70 percent for full-service.

Is restaurant menu inflation really that high?

Not by itself. Statistics Canada's consumer price index for food purchased from restaurants jumped in January and February 2026, at 12.3 percent and 7.8 percent over the year before. Statistics Canada explained that this was largely a base effect: prices in early 2025 had been lowered by the temporary GST and HST break on restaurant meals. By March 2026 the year-over-year figure had fallen to 3.2 percent. Read those early-year numbers as a tax artifact, not as owners raising prices by double digits.

Are independents all losing money?

No. An industry survey of independent full-service operators, reported in January 2026, found thin profit margins. That is a different sample from Restaurants Canada's, so the two sets of numbers are not directly comparable, but it is a reminder that averages hide a wide spread. Some businesses are doing well while others are struggling, and the difference is often in how they manage costs and fill quiet hours.

Which labour costs are already scheduled?

Provincial minimum wages rose on October 1, 2026 in several provinces. Ontario, Manitoba and Nova Scotia were among them. Check your own province's labour ministry for the rate that applies to you, and for any student or liquor-server rules. Employer payroll contributions also change each January, so confirm the Canada Pension Plan and Employment Insurance rates on the Canada Revenue Agency's website before you budget for 2027.

What cannot be forecast yet?

Food prices, tariffs, fuel and rent are all moving, and no one publishes a reliable forecast for 2027. Restaurants Canada issues a quarterly report with an updated sales outlook, which is the best place to look for the next reading. Treat any single forecast as a range, and plan with a margin for error.

What can you control?

You cannot set the price of beef, but you can see exactly what each dish costs you. Work through these in order:

1. Cost every dish again. Use today's invoices, not last year's. A dish you thought earned a comfortable margin may have slipped.
2. Adjust a few prices, not all of them. Raise the items guests order without comparing prices, and keep one or two anchor dishes steady.
3. Cut waste before you cut portions. Count what goes in the bin for a week.
4. Fill your quiet hours. An empty table costs the same rent as a full one.
5. Review suppliers every quarter. Ask for quotes, and ask what your supplier expects to change.
6. Keep staff. Replacing a trained server or cook costs more than most owners think.

Are you worried that rising costs are eating into every busy Friday?

Costs you cannot change are one problem; empty seats you can fix are another. Mosey is a food discovery app where diners find places by the dish and rate what they ate, and it gives food businesses a page that shows up for the meals they are best at. Nobody can pay to outrank you there, because Mosey Gold is earned from ratings alone.

More guides for your business:

• How to get more customers for a Halifax restaurant, in and out of cruise season
• How to get more customers for a restaurant in Hamilton, Ontario
• How to get more customers for a restaurant in Kitchener-Waterloo

More in the Canadian guides for food businesses.