The food services and drinking places sector increasingly relies on non-permanent residents to fill critical staffing gaps, with this workforce segment growing to 20.8 per cent of all employees in 2023, up from 11.3 per cent in 2019, according to new Statistics Canada data.
The demographic shift comes as the sector faces persistent labour challenges following the COVID-19 pandemic. Despite revenue recovery, employment levels in 2023 remained 2.4 per cent below 2019 levels across restaurants, bars and food service operations, the federal agency reported this week.
Labour shortages drive hiring changes
Job vacancy rates in the sector peaked at 13.4 per cent in the third quarter of 2021 and remained elevated at 7.1 per cent in 2023, well above the national average of 4.2 per cent. The shortage occurred as many displaced workers chose not to return to food service roles after pandemic restrictions lifted.
Limited-service eating places, including fast food establishments, saw the most dramatic increase in non-permanent resident hiring. This segment’s workforce grew to 25.2 per cent non-permanent residents in 2023, compared to 13.0 per cent in 2019.
The increased availability of temporary foreign workers, international students and other non-permanent residents helped ease labour supply shortages, Statistics Canada noted. Strong growth in temporary immigration throughout 2022 and 2023 contributed to this workforce expansion.
Sector maintains young, part-time profile
The food service workforce retained its traditional characteristics despite the pandemic’s impact. Women comprised 56.7 per cent of employees in 2023, down slightly from 59.0 per cent in 2017. The sector continues to employ predominantly young workers, with 43.8 per cent under age 25 and over two-thirds under 35.
Part-time employment dominates the sector at 84.1 per cent in 2023. Among workers under 25, 94.3 per cent work part-time schedules compared to 72.1 per cent of those 25 and older.
Special food services, including caterers and food trucks, employed the oldest workforce with 44.8 per cent of workers aged 35 and over. Limited-service establishments had the youngest staff, with 49.8 per cent under 25.
Financial pressures reshape operations
Rising costs forced operators to increase menu prices by 21.2 per cent between December 2019 and December 2023. Salaries, wages and commissions increased 22.2 per cent over the same period, while food costs rose 20.8 per cent and rental expenses climbed 15.9 per cent.
Operating profit margins fell to 3.6 per cent in 2023, the lowest since 2003. Real gross domestic product in the sector dropped 7.8 per cent from 2019 levels, reflecting reduced economic activity despite revenue growth.
Policy changes may impact workforce
The federal government’s plan to reduce temporary residents to five per cent of Canada’s population by 2026 could affect labour supply. Non-permanent residents currently represent 7.1 per cent of the population as of April 2025, down from 7.4 per cent in October 2024.
The Statistics Canada analysis covered employees who received T4 tax slips and excluded self-employed workers. The study examined workforce demographics from 2017 to 2023 across full-service restaurants, limited-service eating places, special food services and drinking establishments.
