Rising costs keep Dal students from dining out

Canada is expected to end 2026 with 4,000 fewer restaurants than it started with, according to a recent projection from Dalhousie University’s Agri-Food Analytics Lab.

This doesn’t surprise Adrian Colbert, a second-year Dalhousie law student, at all. 

“A lot of people are not eating out as much because they don’t have the money for it,” he says.

Colbert goes out to eat once or twice a week and is a big fan of downtown Halifax restaurants Black Sheep and Sushi Nami Royale. The high prices keep him from indulging any further. 

“If the price was down, I think I would go out more,” he says. 

John Coplin, a second-year computer science student, says he wasn’t shocked by the projections either. He goes out to eat once a week, often with friends or family. Cost is the biggest obstacle to dining out more regularly. 

“If I’m going somewhere with friends, it kind of limits where we go,” says Coplin. “With family, it’s a bit different, because we’re more comfortable [incurring] bigger expenses.” 

Students with tight budgets will be among the first demographics to cut back on dining out, according to Sylvain Charlebois, senior director of Dalhousie’s Agri-Food Analytics Lab.

He says the lab’s forecast was created by comparing Statistics Canada data with economic data based on the job market, food expenditures and alcohol consumption trends. The study cited “margin compression, rising fixed costs, softening demand, and mounting financial fatigue” as factors behind the expected loss of 4,000 restaurants. 

The lab estimates 7,000 restaurants permanently closed in Canada in 2025.

“It’s tough out there,” says Charlebois. “Input costs are higher, labour costs have gone up, it’s much more difficult to make a profit.” 

Declining alcohol sales are also a significant factor, since they’ve historically subsidized food margins. Alcohol consumption is declining, particularly among younger Canadians, and Charlebois says restaurateurs will likely have to raise menu prices to supplement the loss of revenue. 

These rising prices will further impact the popularity of restaurants. 

“Consumers aren’t going out as much, and if they do go out, they don’t spend as much, so it’s very difficult for restaurants,” says Charlebois. 

Halifax has already seen restaurants close this year, including Driftwood Coastal Diner and the Smitty’s near Clayton Park.

Natasha Chestnut is the executive director of the Restaurant Association of Nova Scotia. She says eateries are being “squeezed to the max” between rising costs and dwindling demand. Despite this, menu prices are not going up at the same rate as inflation on groceries. 

“You can only up your menu prices so high or else you’re going to lose consumers,” she says. 

Chestnut says restaurants in rural and remote areas face extra challenges because they don’t have access to the post-secondary student labour pool that Halifax does. 

To help restaurants, Chestnut says the association requested that the province increase the alcohol discount from 10 to 15 per cent for licensed restaurants and bars, and add incentives or rebates on local food products.

The restaurant association also supports Restaurants Canada’s request for a permanent GST/HST exemption on food. 

“[The restaurant industry is] going to enter into 2026 with a lot of the same challenges we’ve been seeing,” says Chestnut. 

Increasing labour costs pose another challenge for Nova Scotia’s restaurant industry. The provincial minimum wage is set to rise from $16.50 to $16.75 per hour on April 1, before seeing another hike to $17 per hour on Oct. 1. 

“Restaurants will have to pay labour a little bit more, and that’s probably going to force restaurant operators to increase prices,” Charlebois says.

Chestnut says significant reductions in the number of work permits issued by the federal government are also making it difficult for restaurants to recruit and retain staff.

“That labour piece is going to be a significant challenge in addition to the increase in cost,” Chestnut says. “It’s concerning.”