Restaurant Closure Trends Are a Warning Sign for Toronto’s Main Streets
TABIA’s John Kiru recently had the opportunity to highlight the BIA perspective on CityNews Toronto regarding new Statistics Canada data that points to mounting pressure on independent restaurants and what’s at stake for Toronto’s neighbourhoods.
Analysis of Statistics Canada data by Sylvain Charlebois of the Dalhousie Agri-Food Analytics Lab shows that after a post-pandemic rebound, the restaurant sector has begun contracting again. Across Canada, 7,000 restaurants closed last year, with projections suggesting another 4,000 closures by 2026.
Source of chart: @FoodProfessor
Pressure From All Sides
Restaurants are facing sustained pressure on multiple fronts. Labour costs have increased and are unlikely to reverse. Commercial rents continue to rise even as foot traffic softens. Consumers are dining out less frequently and are increasingly price-conscious.
Independent Restaurants Are Hit Hardest
The projected losses will not be evenly distributed. Independent, main-street restaurants — the backbone of Toronto’s neighbourhood economy — are bearing the greatest burden.
Unlike large chains, independent operators lack scale, buying power, and financial buffers. Rising food costs, insurance premiums, utilities, financing, and rent resets hit small restaurants harder. With limited ability to absorb increased costs when passing costs on to increasingly cautious customers is more difficult than ever, many are operating in survival mode.
Big chains can absorb shocks. Your favourite local restaurant often cannot, and that is where the pain is showing first.
What We’re Hearing from Restaurants in BIAs
In the best of times, restaurants operate on thin margins. In today’s environment, with high input costs and customers’ tightening their wallets, even strong operators are focused on staying afloat rather than growing. But, we have to remember survival is not success.
In the CityNews Toronto interview, a Rogers Road BIA restaurant owner, Ricardo Pinto of St. Matthew’s BBQ Chicken, shared that cost increases are touching every part of the business — from food and packaging to supplies — with year-over-year increases of 20 to 30 per cent in some areas. There is only so much that can be passed on to customers before it becomes untenable.
Why This Matters for Toronto Neighbourhoods
When independent restaurants disappear, Toronto loses more than storefronts.
Neighbourhood restaurants are economic anchors. They generate local jobs, support surrounding retail, drive foot traffic, and contribute to Toronto’s cultural diversity and culinary identity. When a well-loved restaurant closes, it often leaves behind a large vacancy that is difficult to fill, weakening the entire main street.
Vibrant neighbourhoods depend on vibrant restaurants.
What Governments Can Do
This data is a warning sign, but it is also an opportunity to act.
Reducing cost pressures on small, independent businesses is essential to supporting long-term viability. Targeted tax relief, regulatory flexibility, and policies that recognize the unique challenges of main-street businesses can make a meaningful difference.
Toronto’s CaféTO program continues to be a strong example of effective support, helping restaurants expand capacity, animate streets, and attract visitors. Continued investment in this program will be especially important as Toronto prepares to welcome visitors for major events such as the FIFA World Cup.
A City-Building Issue
Supporting independent restaurants is about protecting the economic and cultural fabric of Toronto.
This is not just a restaurant issue. It is a main-street issue, a neighbourhood issue, and a city-building issue.
TABIA will continue to advocate for policies that help ensure Toronto’s main streets remain vibrant, resilient, and welcoming for residents, visitors, and local businesses alike.