November 13th, 2025
As Canada approaches 2026, restaurant operators across the country are preparing for another year of escalating labour costs. The primary driver? Minimum wage hikes in nearly every province. With inflation-indexed adjustments and policy-driven increases pushing base wages upward, restaurants are under pressure to reevaluate pricing, scheduling, and staffing strategies.
Labour typically accounts for 25–35% of a restaurant’s revenue. Even modest wage changes can swing profitability significantly, especially in sectors like quick-service restaurants (QSRs), casual dining, and small independents that rely heavily on hourly employees. This report outlines the projected minimum wage increases for 2026, their percentage and dollar values, and the likely impact on restaurant labour cost ratios across each Canadian province.
Minimum wages will rise in every Canadian province by 2026, pushing restaurant labour costs significantly higher.
Ontario and B.C. will exceed $18/hour, with expected labour cost ratios climbing to 31–34% of revenue.
Quebec’s modest 2.2% hike softens impact, but wage compression will raise total payroll expenses.
Alberta could see an 8.7% jump if catch-up hike occurs, potentially spiking labour cost share by 2.4 points.
Manitoba, Saskatchewan, and Atlantic provinces face 3–5% increases, with costs rising +1 to +1.6 percentage points.
PEI leads Atlantic Canada with a $17.00 wage confirmed, hitting seasonal and small-town operators hardest.
New Brunswick’s projected +5.4% increase is the steepest, raising labour costs to ~31.6% of revenue.
Operators must balance menu pricing, staffing, and technology to stay viable in a tighter 2026 market.
Without tax relief or subsidies, closures and cutbacks could increase in the hardest-hit provinces.
|
Province
|
2025 MW
|
2026 MW (Est.)
|
$ Δ
|
% Δ
|
Gross Labour Cost
|
|---|---|---|---|---|---|
|
Ontario
|
$17.60
|
~$18.00
|
+0.40
|
+2.3%
|
31.2%
|
|
British Columbia
|
$17.85
|
~$18.10
|
+$0.25
|
+1.4%
|
33-34%
|
|
Quebec
|
$16.10
|
~$16.45
|
+$0.35
|
+2.2%
|
30.6%
|
|
Alberta
|
$15.00
|
~$15.00-$16.30
|
+$0-$1.30
|
+0-8.7%
|
30.4%
|
|
Manitoba
|
$16.00
|
~$16.50
|
+$.50
|
+3.1%
|
31%
|
|
Saskatchewan
|
$15.35
|
~$16.00
|
+$0.65
|
+4.2%
|
31.3%
|
|
Nova Scotia
|
$16.50
|
~$17.10
|
+$0.60
|
+3.6%
|
31.1%
|
|
New Brunswick
|
$15.65
|
~$16.50
|
+$0.85
|
+5.4%
|
31.6%
|
|
Prince Edward Island
|
$16.50
|
~$17.00
|
+$0.50
|
+3.0%
|
31%
|
|
Newfoundland & Labrador
|
$16.00
|
~$16.50
|
+$0.50
|
+3.1%
|
31%
|
2025 Minimum Wage: $17.60
2026 Projected: ~$18.00
$ Increase: +$0.40
% Increase: +2.3%
Estimated Labour Cost Impact: +1.2 pts → ~31.2% of revenue
Context: Ontario’s full general wage now applies to all roles, including servers (no liquor-server discount). A $0.40 increase adds approx. $800/year per full-time worker. With ~23% of foodservice workers earning near-minimum, the ripple effect on payroll is widespread.
Outlook: Operators may raise menu prices or trim operating hours. FSRs face added wage compression pressure as back-of-house staff also expect raises. Independents and small chains will need tight controls or relief support to maintain margins.
2025 Minimum Wage: $17.85
2026 Projected: ~$18.10
$ Increase: +$0.25
% Increase: +1.4%
Estimated Labour Cost Impact: +0.9 pts → ~33–34% in FSRs
Context: Already Canada’s highest minimum wage. Labour shortages in Vancouver and Victoria mean many restaurants already pay $18+. The increase may formalize actual market wages.
Outlook: Minimal immediate payroll shock, but high fixed costs persist. Operators continue investing in kiosks, online ordering, and streamlined menus. Expect tech-driven efficiency gains rather than aggressive layoffs.
2025 Minimum Wage: $16.10
2026 Projected: ~$16.45
$ Increase: +$0.35
% Increase: +2.2%
Estimated Labour Cost Impact: +0.6 pts → ~30.6%
Context: Quebec retains a lower tipped wage ($12.90 → ~$13.15), softening the blow for FSRs. However, indirect costs rise due to wage compression – cooks and back-of-house staff may demand $0.50–$1/hr increases to maintain relative pay.
Outlook: The mild increase gives operators time to adapt. Many may focus on retention and modest menu pricing tweaks rather than major operational shifts.
2025 Minimum Wage: $15.00 (unchanged since 2018)
2026 Scenario 1: No change
2026 Scenario 2 (Forecasted): $16.30
$ Increase: +$1.30 (Scenario 2)
% Increase: +8.7%
Estimated Labour Cost Impact (Scenario 2): +2.4 pts → ~30.4%
Context: With rising costs of living, many operators already pay $16–$17 to attract staff, especially in Edmonton and Calgary. Even without a legal hike, market-driven wage increases are likely.
Outlook: Alberta restaurants could remain cost-competitive if the minimum wage stays flat. But labour shortages may force organic pay hikes. If a legal increase is enacted, operators face sharp cost jumps and potential margin compression.
2025 Minimum Wage: $16.00
2026 Projected: ~$16.50
$ Increase: +$0.50
% Increase: +3.1%
Estimated Labour Cost Impact: +1.0 pt → ~31.0%
Context: Follows a ~20% increase over the past 3 years. Many independents still recovering from pandemic-era revenue dips.
Outlook: Operators may face pressure to cut hours or increase prices selectively. Rural and suburban restaurants may have difficulty passing costs to customers.
2025 Minimum Wage: $15.35
2026 Scheduled: $16.00
$ Increase: +$0.65
% Increase: +4.2%
Estimated Labour Cost Impact: +1.3 pts → ~31.3%
Context: Wage growth continues along a multi-year indexed track. Predominantly independent operators with limited technology adoption.
Outlook: Many will seek relief through payroll efficiency and staff cross-training. Tech adoption remains low, but owners may turn to shared staffing across locations.
2025 Minimum Wage: $16.50
2026 Projected: ~$17.10
$ Increase: +$0.60
% Increase: +3.6%
Estimated Labour Cost Impact: +1.1 pts → ~31.1%
Context: NS ties minimum wage to inflation + 1%. High proportion of independents and family-run restaurants with limited flexibility.
Outlook: Operators are at breaking point – 53% already report breaking even or worse. Tax credits or subsidies will be vital if cost pressures persist.
2025 Minimum Wage: $16.50
2026 Confirmed: $17.00 (April 1, 2026)
$ Increase: +$0.50
% Increase: +3.0%
Estimated Labour Cost Impact: +1.0 pt → ~31.0%
Context: PEI will lead Atlantic Canada again. Impact especially sharp for seasonal and tourism-driven restaurants.
Outlook: Operators with low foot traffic or short seasons may struggle. Widespread calls for offsetting policy tools like temporary wage subsidies.
2025 Minimum Wage: $16.00
2026 Projected: ~$16.50
$ Increase: +$0.50
% Increase: +3.1%
Estimated Labour Cost Impact: +1.0 pt → ~31.0%
Context: Wage indexing introduced in 2025, offering predictability. Small operators and diners in rural areas are most exposed.
Outlook: Some restaurants may absorb costs through personal labour (owners taking shifts), but viability of marginal operators remains at risk.
Labour cost pressures are rising across every province in 2026, even in regions with modest increases. The cumulative effect of years of inflation indexing, pandemic recovery, and market pressure is forcing Canadian restaurant operators to rethink how they manage, staff, and price their businesses.
The average restaurant labour cost is projected to rise from ~30% to 31–32% of revenue. This 1–2 point shift may seem minor, but it can reduce profit margins by 20–40% in an industry where typical margins hover under 5%.
Most restaurants will see labour cost ratios increase by 1–2 percentage points, rising from ~30% to 31–32% of revenue, depending on the province and staffing mix.
New Brunswick (+5.4%), Saskatchewan (+4.2%), and a potential Alberta catch-up increase (+8.7%) represent the largest percentage jumps, while Ontario and B.C. will maintain the highest absolute wage levels (near or above $18/hr).
Menu price increases can help but can’t fully offset rising labour costs; many markets are highly price sensitive, meaning aggressive price hikes risk reducing customer traffic.
Operators should focus on labour optimization, cross-training staff, introducing technology (kiosks, QR ordering, scheduling software), streamlining menus, and exploring government tax credits or subsidy programs to mitigate wage pressure.
