Nova Scotia’s restaurant industry is facing mounting financial pressures as operators grapple with rising costs, shrinking profit margins and changing consumer spending habits, even as tourism continues to grow across the province. According to the Restaurants Association of Nova Scotia, food costs have increased between 20 and 25 per cent over the past several years, while labour, rent, insurance and equipment expenses have also risen significantly. Natasha Chestnut, president and CEO of the association, said many restaurant owners have been reluctant to raise menu prices at the same pace as inflation out of concern for customers already dealing with higher living costs. “We ended 2025 with around 40 per cent operating at a loss or a break even,” Chestnut said. “In 2019 it was 12 per cent.” She said the industry expected to see business closures in 2026 as operators continue to struggle with razor-thin profit margins averaging about four per cent. The challenges are being felt in both urban and rural communities, where labour shortages and supply costs can create additional obstacles for restaurant owners. Ron LaCorte, owner of Happy Place Restaurant in Halifax, said rising food costs have made running a restaurant increasingly difficult. “Running a business, especially nowadays, not really easy,” he said. “Especially the costing were getting high, especially those meat, like beef, chicken and anything.” Despite the higher expenses, LaCorte said he has not increased menu prices and is trying to absorb some of the costs while maintaining quality and service. He said his primary motivation for owning the restaurant is not profit. “It’s my passion to cook, to serve for the customers,” he said. Chestnut said many consumers are dining out less frequently or spending less during restaurant visits as economic pressures continue to affect household budgets. While new restaurants continue to open, the association expects 2026 to remain a challenging year for the industry as operators work to navigate rising costs and uncertain consumer spending. For more Nova Scotia news, visit our dedicated provincial page
