From crisis to opportunity: restoring predictability in the food service industry

In order for small business, family-owned and national franchise establishments across Canada to thrive, it’s imperative that labour market and workforce strategies prioritize their needs

// By Kelly Higginson, President and CEO of Restaurants Canada

// By Kelly Higginson, President and CEO of Restaurants Canada

Dining out is about sharing laughs over shared plates, trying new dishes, and making memories with friends and family. It takes a lot to keep restaurants thriving and providing the great service and delicious food we admire them for. But the demand for labour is high.

The $100 billion foodservice industry is the fourth largest private employer in the country, with 96-cents of every dollar spent in a Canadian restaurant going back into the community and the economy. For some perspective - the often-admired mining industry represents $125 billion.

Unfilled positions

The foodservice industry is not one that can be easily dismissed. Unfortunately, the industry realities are stark; 62 per cent of operators are operating at a loss or barely breaking even compared to 12 per cent pre-pandemic. It has the highest number of job vacancies in the private-sector, accounting for one out of every six job vacancies in Canada. These openings aren’t easy to fill due to significant demographic shifts within the workforce. On average, Canadian restaurants operate at 80 per cent of their normal capacity due to labour shortages.

Currently, employers operating within the foodservice sector are able to hire up to 30 per cent of their workforce through the Temporary Foreign Worker program. Beginning May 1, this will be reduced to 20 per cent in an effort to shrink temporary residents’ share of Canada’s population. This new cap on temporary foreign worker permits will exacerbate job vacancy rates in the restaurant sector even further – there are more than 130,000 unfilled positions in restaurants across Canada.

Bankruptcies and closures

Unfortunately, this labour challenge, coupled with inflation, means many restaurants are struggling to keep up. Rising operational expenses have eroded narrow profit margins, leading to a 41 per cent increase in the number of bankruptcies, up 9 per cent from July 2023. Last year saw a record number of restaurants closing their doors. This is heartbreaking for owners and staff, and for those of us who loved dining out at these restaurants.

Smart integration policies

Efforts to reverse this trend will require support from the Canadian government through targeted policy changes. In 2018, Immigration, Refugees and Citizenship Canada (IRCC) launched the Destination Employment program, facilitating the workforce integration of newcomers. It trained new Canadians for in-demand employment opportunities in the hospitality sector. Designed to support new Canadians in their job search, it connected them to well-paying, skilled jobs.

This program saw great initial success but was suspended due to the onset of the pandemic and has yet to be reinstated. However, the infrastructure required for the program’s administration remains in place within the IRCC.

Smart immigration policies offer a win-win solution by alleviating labour shortages while also providing newcomers to the country, including refugees, with valuable Canadian workforce experience.

Keeping restaurants open and thriving

Policies that are good for restaurants are good for Canadian communities. Reinstating and expanding the program to include a broader range of hospitality positions will increase opportunities for new Canadians to build a valuable career in foodservice. Not only will it create economic opportunities for newcomers, but it will help keep our favourite restaurants open and thriving for many years to come.

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Kelly Higginson is an experienced leader with more than 25 years working within the hospitality industry, serving as President and CEO of Restaurants Canada.