Canada hospitality spending hits $104B as labor shortages persist

By AI, Created 10:01 AM UTC, May 20, 2026, /AGP/ – Canada’s hospitality sector posted $104 billion in spending in 2025 and employment above pre-pandemic levels, but operators are still struggling to keep workers. A new Staffing Agency report says housing costs, rising labor expenses and turnover are pressuring margins and could keep growth uneven through 2030.

Why it matters: - Canada’s hospitality rebound is being limited by staffing instability, even as demand and employment have recovered. - The report says labor shortages, turnover and rising operating costs are squeezing margins across restaurants, hotels and other service businesses. - Housing costs and regional labor differences are shaping where employers can hire and how reliably they can fill shifts.

What happened: - The Staffing Agency released a report titled “Beyond the Boom: Canada’s Hospitality Labor Market in 2025 and the Road to 2030.” - Canada’s hospitality spending reached $104 billion in 2025. - Employment in the sector was higher than pre-pandemic 2019 levels. - Operators are hiring but not retaining enough long-term staff. - The report describes this as a “labor paradox.”

The details: - Part-time roles are filling critical shifts, often staffed by students, newcomers and temporary workers. - That staffing mix keeps operations running, but increases turnover and reduces reliability. - Labor costs now include higher wage floors, premiums in expensive cities, benefits, turnover and training. - Steven Kamali, CEO of The Staffing Agency, said: “In Canada, the wage increase isn’t a threshold; it’s the new baseline. The question now isn’t if we can pay more, but if we can make the model work.” - Housing has become the report’s defining fault line. - In cities such as Toronto, Vancouver and Montreal, workers often cannot afford to live near their jobs. - Longer commutes are leaving some shifts unfilled. - Union activity is rising in urban centers, with effects on scheduling, pay structures and operations.

Between the lines: - The report suggests the hospitality recovery is strong on demand, but fragile on labor supply. - Canada’s dependence on international talent adds sensitivity to immigration and policy shifts. - Kamali said wage growth in the United States is also outpacing productivity in many markets, while housing constraints continue to affect labor availability. - The result is a sector that can grow in volume, but may struggle to scale predictably without more stable staffing.

What’s next: - The report says operators need a more reliable talent pipeline. - It also points to housing near job centers as a key pressure point. - Workforce strategies will likely need to be tailored by region. - Without those changes, the report warns growth will remain uneven. - View the full report