Six out of 10 Foodservice Businesses Expect Negative Impacts from Tariffs

Businesses across Canada’s foodservice sector are bracing themselves for rising food costs resulting from tense international trade negotiations. According to Restaurants Canada’s most recent quarterly Restaurant Outlook Survey, six out of 10 respondents believe tariffs imposed on products imported from the United States will have a negative impact on their businesses

“The survey results are not surprising, given how integrated Canadian supply chains are with the United States,” said Lauren van den Berg, Restaurants Canada National Vice President, Government Affairs. “When ingredients that foodservice operators would normally source from south of the border are tacked with tariffs, domestic substitutions are not always a viable solution for businesses with already razor thin profit margins; nor is raising menu prices and passing on costs to consumers.”

Of the food items on Canada’s list of retaliatory tariffs that came into effect on July 1, a significant percentage are considered ingredients, while still other items are required for serving and delivering food to consumers. When these prices increase, so too will the cost of preparing — and ordering — food and beverages served at restaurants and other establishments.

“As the voice of Canada’s foodservice sector, our presence at the table is crucial”

Canadian foodservice businesses employ more than 1.2 million people across the country, serve 22 million customers every day, and generate $85 billion in annual sales. The foodservice sector also provides more first jobs than any other industry: 22 percent of Canadians start their careers in a restaurant or foodservice business.

“As the voice of Canada’s foodservice sector, our presence at the table is crucial as responses to trade disputes are considered,” said Shanna Munro, Restaurants Canada President & CEO. “We appreciate our government’s need to stand up for fairness on the international stage. We can do so while still protecting the interests of our businesses and consumers here at home.”

The results of Restaurant Canada’s Restaurant Outlook Survey for the second quarter of 2018 were compiled from responses to a survey conducted in July 2018. In total, 283 completed surveys were submitted, representing 9,181 establishments, including table-service restaurants, quick-service restaurants, and other foodservice businesses, such as accommodation, institutions and drinking places.