Budget 2025: Foodservice Analysis  

Now that the federal budget has been tabled, the team at Restaurants Canada has reviewed the Budget for items of interest to Canada’s foodservice industry.  For reference, please see our statement released after the budget here. 

Top-Line Reaction 

Restaurants Canada is underwhelmed by the lack of measures addressing cost of living in Budget 2025 and alarmed about further cuts to immigration that will make it even more challenging for foodservice businesses to hire for hard-to-fill roles and in rural, remote and tourism areas.   

“The foodservice industry is at a turning point—we are facing intense pressure from rising input costs and reduced consumer spending, and yet we have outpaced other industries in job creation over the past year. We need government to recognize our important role in the economic strength of not just communities, but the country as a whole, and invest in our industry.”   

– Kelly Higginson, President and CEO of Restaurants Canada 

Political Overview 

This budget marks a new approach that shifts the federal budget cycle from spring to fall. The budget is based on core themes from Carney’s pre-budget address: economic resilience, fiscal discipline, empowering Canadians, building national capacity, and creating a leaner, more efficient government. It positions Canada as moving into a new industrial phase driven by global competition and U.S. protectionism, focusing on “Buy Canada” procurement, domestic supply chains, and export diversification. The government combines these ambitions with a promise to protect key social programs and eliminate the operating deficit within three years.  

The budget also detailed significant savings from the federal government’s recent Comprehensive Expenditure Review, which aims to control spending by identifying internal efficiencies through three core pillars: modernizing operations, streamlining delivery, and recalibrating programs.  

Relevant Budget Sections to the Foodservice Industry  

*Full quotes below

• 2026-2028 Immigration Levels Plan (p. 95-97) 
• Canadian Small Business Financing Program (p.313) 
• Modernising Operations at the Regional Development Agencies (p.331) 
• Equipping Companies for Growth and Diversification (p.132-133) 
• Supporting Workers (p.133) 
• Helping Youth Find and Keep Jobs (p.166-167) 
• Royal Canadian Mounted Police (p.322) 
• Canada’s Corporate Tax Advantage (p.86) 

Next Steps 

Rest assured that we have already been on the phone with the Office of the Minister of Finance to voice our concerns. We will be active in the upcoming weeks to better understand the implications of the Budget on our industry and to advocate for the inclusion of the foodservice industry into newly announced measures.  

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Relevant Budget Sections – Full Quotes  

2026-2028 Immigration Levels Plan (p. 95-97) – Restaurants Canada will be very active in working to ensure our sector is recognized in the immigration plan.  Specifics at this point are unclear 

• Budget 2025 announces that the 2026-2028 Immigration Levels Plan will stabilise permanent resident admission targets at 380,000 per year for three years, down from 395,000 in 2025, while increasing the share of economic migrants from 59 per cent to 64 per cent. The new plan will also reduce the target for new temporary resident admissions from 673,650 in 2025 to 385,000 in 2026, and 370,000 in 2027 and 2028.  
• The government recognises the role temporary foreign workers play in some sectors of the economy and in some parts of the country. To that end, the 2026-2028 Immigration Levels Plan will consider industries and sectors impacted by tariffs and the unique needs of rural and remote communities.   
• In addition, Budget 2025 proposes a one-time initiative to recognise eligible Protected Persons in Canada as permanent residents over the next two years. This practical step is a reflection of the fact that the vast majority of these people cannot return to the country of their origin. It will also ensure that those in genuine need of Canada’s protection have their permanent status recognized, accelerating their full integration into the Canadian society and their path to citizenship.  
• Budget 2025 also proposes to undertake a one-time measure to accelerate the transition of up to 33,000 work permit holders to permanent residency in 2026 and 2027. These workers have established strong roots in their communities, are paying taxes, and are helping to build the strong economy Canada needs. 
• Additional details on the 2026-2028 Immigration Levels Plan will be provided when the Minister of Immigration, Refugees and Citizenship tables the 2025 Annual Report to Parliament on Immigration. 

Canadian Small Business Financing Program (p.313) 

To better align its programs with current priorities and reduce redundancies, ISED will transfer the Canadian Small Business Financing Program to the Business Development Bank of Canada. ISED will also streamline its business support services, such as Digital Services to Business, to improve efficiency. Targeted reductions will be made in certain entrepreneurial and innovation programs as well as at the Canada Foundation for Innovation. 

Modernising Operations at the Regional Development Agencies (p.331) 

To meet up to 15 per cent in savings targets over three years, the Regional Development Agencies (RDAs) will recalibrate their programming suite to focus on their mandate to promote long-term economic development. The agencies will reprioritize their respective Regional Economic Growth through Innovation programs towards support that strengthens their regions’ economic development, focusing on investments that drive economic growth. The RDAs will also wind down the Tourism Growth Program after 2025-26, with the industry continuing to be supported by regular programming. 

Equipping Companies for Growth and Diversification (p.132-133) 

Canada’s new government is helping companies overcome immediate trade pressures and providing them with support to pivot, grow, or diversify their operations by supporting projects to deepen their reach within Canada and find new reliable markets abroad.  

• Up to $1 billion over three years, starting in 2025-26, to the Regional Development Agencies for the Regional Tariff Response Initiative to support businesses impacted by tariffs across all affected sectors, including increasing non-repayable contributions for eligible businesses. 

Supporting Workers (p.133) 

The government is implementing a new reskilling package for workers, has made Employment Insurance more flexible and with extended benefits, and will launch a new digital jobs and training platform with private-sector partners to connect Canadians more quickly to careers.  

• $570 million over three years, starting in 2025-26, through Labour Market Development Agreements with provinces and territories to support training and employment assistance for workers impacted by tariffs and global market shifts.  
• $382.9 million over five years, starting in 2026-27, and $56.1 million ongoing, to launch new Workforce Alliances to bring together employers, unions, and industry groups to work on ways to help businesses and workers succeed in the changing labour market and coordinate public and private investments in skills development. A new Workforce Innovation Fund will invest in projects tailored to local job markets to help businesses in key sectors and regions recruit and retain the workforce they need.  
• Temporary flexibilities to the Employment Insurance Work-Sharing program, as announced on March 7, 2025, to provide EI benefits to eligible employees who agree to work reduced hours due to a decrease in business activity beyond their employer’s control. This helps employers and employees avoid layoffs while supplementing reduced income with EI benefits. This measure is expected to cost $370.5 million over five years, starting in 2025-26, and $18.5 million ongoing. 
• Temporary Employment Insurance measures that enhance income supports for Canadian workers whose jobs have been impacted by the economic uncertainty caused by foreign tariffs. These supports are expected to cost $3.7 billion over three years, starting in 2025-26.  
• $50 million over five years, starting in 2026-27, and $8 million ongoing, to implement a new digital tool to facilitate job search and applications, and launch a national online training platform in partnership with the private sector. 

Helping Youth Find and Keep Jobs (p.166-167) 

Budget 2025 proposes to provide $594.7 million over two years, starting in 2026-27, to Employment and Social Development Canada for Canada Summer Jobs to support around 100,000 summer jobs in summer 2026;  $307.9 million over two years, starting in 2026-27, for the horizontal Youth Employment and Skills Strategy to provide employment, training, and wraparound supports (e.g., mentorship, transportation, mental health counselling) to around 20,000 youth facing employment barriers annually;  and $635.2 million over three years, starting in 2026-27, to Employment and Social Development Canada for the Student Work Placement Program to support around 55,000 work-integrated learning opportunities for post-secondary students in 2026-27. 

Royal Canadian Mounted Police (p.322) 

Recognizing its essential mandate to keep Canadians safe and secure and protect our sovereignty, the Royal Canadian Mounted Police (RCMP) was provided with a reduction target of 2 per cent of its review base. Proposed savings will not impact policing operations. Budget 2025 makes significant investments in the RCMP to expand its capacity by hiring 1,000 personnel to increase federal policing capacity across Canada to combat crime. 

Canada’s Corporate Tax Advantage (p.86) 

The marginal effective tax rate (METR) provides a comprehensive indicator of how one dollar of additional business investment is taxed—a comparable indicator of tax competitiveness across countries that considers national and sub-national corporate tax rates, as well as investment tax credits, capital cost allowances, and sales and capital taxes.  

The productivity super-deduction will reduce Canada’s METR by more than two percentage points, strengthening our competitiveness with the U.S. following measures implemented in the One Big Beautiful Bill Act (OBBBA). Moreover, Canada will have the lowest METR in the G7 and below the OECD average. This means that businesses can invest and scale more easily and that Canada will remain an attractive destination for investment.