Analysis in Brief
Workforce insights: Demographics in the food services and drinking places subsector, 2017 to 2023

Acknowledgments

The author would like to thank Lily Jiang and Cael Thomas for their contributions to this project.

Businesses in the food services and drinking places subsector are directly influenced by economic conditions, seasonal factors and household discretionary spending. This subsector plays a significant role in the Canadian economy, enriches Canadian culture and has a substantial presence in the Canadian labour market. It has historically been a vital source of entry-level employment, offering flexible work schedules and seasonal opportunities, making it a critical segment of the labour market.

This paper, part of a broader series on employment trends across service industries,^Note  explores the financial trends and demographic characteristics of employees in the Canadian food services and drinking places subsector. In recent years, this subsector has been significantly impacted by the COVID-19 pandemic, rising operational costs and changing consumer behaviours.

This paper leverages administrative data to examine the distribution of the workforce in the food services and drinking places subsector by gender,^Note  age, full-time work status^Note  and residency status^Note  from 2017 to 2023. Results in this paper are based solely on employees who received a T4 slip from employers and exclude self-employed workers.

Food services and drinking places subsector

The food services and drinking places subsector comprises four industries: full-service restaurants, where customers receive table service and pay after eating; limited-service eating places, including fast food establishments, take-out restaurants and cafeterias, where payment is made before dining; special food services, such as caterers, food trucks and food service contractors, which provide meals in various settings; and drinking places, including bars, taverns and nightclubs, which are primarily engaged in serving alcohol.^Note  These industries rely heavily on in-person consumer traffic, tourism and travel, all of which were significantly impacted by the restrictions imposed during the pandemic.

The full-service restaurants industry experienced immense challenges throughout the pandemic. Given the industry’s reliance on tourism, travel and in-person sales, the impact of the pandemic was severe and immediate. Operating revenues plummeted 33.1% from 2019 to 2020 and remained 20.0% below 2019 levels in 2021.^Note  With many dining rooms across the country closed, the industry pivoted to take-out, delivery and e-commerce options, wherever possible.^Note  As a result, e-commerce sales more than tripled at full-service restaurants (+228.6%) to $3.9 billion, increasing the share of e-commerce sales from 3.7% in 2019 to 20.8% in 2020.^Note  However, while e-commerce provided a critical lifeline for full-service restaurants, recovery would not come until 2022, when restaurateurs could once again fill dining rooms and capitalize on increasing higher-margin sales, such as alcoholic beverages.^Note 

Operators of limited-service eating places were impacted to a lesser extent following the introduction of pandemic-related restrictions. Already equipped for take-out and delivery, limited-service eating places saw total operating revenues fall 12.0% in 2020. Recovery in the industry was also swift, with operating revenues fully recovering to pre-pandemic levels in 2021.^Note  Businesses rapidly expanded their e-commerce presence, leveraging third-party delivery services and mobile apps to enhance accessibility. By 2023, e-commerce sales in the industry had surged from $2.0 billion in 2019 to $4.5 billion in 2023.^Note  This digital shift not only supported short-term recovery but also reshaped consumer habits, making online ordering a core aspect of future growth.

Within the food services and drinking places subsector, businesses in the special food services and drinking places industry groups were the most severely impacted during this period. In 2020, operating revenues were almost halved for both special food services (-48.3%) and drinking places (-49.4%), compared with 2019. Because of their reliance on large events and social gatherings, recovery was also slow, with operating revenues returning to pre-pandemic levels in 2023 for both industry groups.^Note  Given the extent of revenue declines, the federal government introduced various support measures, including subsidies and programs such as the Canada Emergency Wage Subsidy and Canada Emergency Rent Subsidy.^Note ,^Note 

Employment across all four industries in the subsector had not rebounded to pre-pandemic levels as of 2023 and remained 2.4% below the 2019 level of employment in the subsector.^Note  Despite this, operators continued to face rising wage pressures, with salaries, wages and commissions increasing 22.2% over the same period. Furthermore, the increasing costs of food and operations drove up the cost of goods sold (+20.8%) and rental and leasing expenses (+15.9%) in the subsector, from 2019 to 2023.^Note  As a result, the operating profit margin in the subsector decreased to 3.6% in 2023, the lowest recorded profit margin since 2003 (3.2%).^Note  With falling margins and increasing wage and cost pressures in the subsector, restaurateurs responded by adjusting prices, ensuring operations remained sustainable. As of December 2023, compared with December 2019, the price of food purchased at a restaurant had increased by 21.2%.^Note  Despite 21.2% growth in revenues, the increase in prices underscores a decline in activity within the subsector. Cost-of-living challenges and shifting consumer habits, partly driven by the adoption of hybrid work, have contributed to lower economic activity, with real gross domestic product in the subsector down 7.8% from 2019 levels in 2023.^Note 

Workforce trends in the food services and drinking places subsector: Gender composition

Across all years of the study and industries, women made up a greater share of the workforce, accounting on average for 57.9% of total employment. This proportion decreased slightly, from 59.0% in 2017 to 56.7% in 2023. The largest share of women employed was in the special food services industry group, where they made up 61.6% of the workforce, on average.

Workforce trends in the food services and drinking places subsector: Age composition

The food services and drinking places subsector employed a predominately young workforce, with over two-thirds of employees under the age of 35 and 43.8% of employees under the age of 25 in 2023. This contrasts sharply with the overall Canadian workforce, where 36.2% of employees were under 35 and 13.1% were under 25.^Note  The limited-service eating places industry had the highest share of young workers, with 49.8% under 25. Among employees under the age of 25, 94.3% worked part time, compared with 72.1% of those aged 25 and over. Across all years of the study, age composition varied across industries: the special food services industry group had the oldest workforce (44.8% aged 35 and over), followed by drinking places (34.8%), full-service restaurants (30.8%) and limited-service eating places (24.7%).

Workforce trends in the food services and drinking places subsector: Work status

The food services and drinking places subsector relies heavily on part-time workers. Throughout the pandemic, this reliance became even more prevalent, with the proportion of part-time employees increasing from 84.6% in 2019 to 88.2% in 2020. However, as operations returned to normal in the subsector, the proportion of the workforce employed part time returned to pre-pandemic levels. This phenomenon was observed across all four industries and was likely due in part to the reduced availability of hours throughout the pandemic. Although work status was consistent across industries, the special food services industry group uniformly employed a larger proportion of full-time employees (18.1% on average).

As was the case in the accommodation services subsector,^Note  unmet demand for employees posed a significant challenge for the food services and drinking places subsector in the wake of the pandemic. Since a significant number of employees displaced by the pandemic opted not to return to the food services and drinking places subsector and demand for restaurant services rebounded as pandemic-related restrictions were eased or removed, job vacancy rates in the subsector soared throughout 2021 and 2022. Following a peak of 13.4% in the third quarter of 2021, the average job vacancy rate in the subsector remained elevated in 2022 (10.2%) and 2023 (7.1%), compared with the Canadian labour market average of 5.4% in 2022 and 4.2% in 2023.^Note 

Throughout this period, the share of non-permanent residents employed in the food services and drinking places subsector’s workforce grew to 20.8% compared with 11.3% in 2019. This increase was most pronounced in the limited-service eating places industry, where the share of non-permanent residents in the workforce increased to 25.2% from 13.0% in 2019. The increased availability of non-permanent residents in the labour supply as a result of strong growth in temporary immigration throughout 2022 and 2023^Note  helped lower the job vacancy rate and eased the labour supply shortage in the subsector.^Note 

Conclusion

The food services and drinking places subsector is a vital component of the Canadian economy. It is one of Canada’s largest industries based on total employment; in addition, it makes significant contributions to economic growth, consumer spending and community engagement. Following significant negative impacts caused by the pandemic, the subsector has recovered in terms of revenue. However, employment levels in 2023 remained below 2019 levels in all four industries. Despite this, the composition of the workforce in terms of gender, age distribution and full-time work status remained largely unchanged from 2017 to 2023. The subsector continued to employ primarily young workers, the majority on a part-time basis. However, the residency status of the workforce shifted during and after the pandemic, with increased reliance on non-permanent residents—such as international students, temporary foreign workers and others without Canadian citizenship or permanent residency—because of their growing presence in the labour supply. In 2023, the food services and drinking places subsector employed a larger share of non-permanent residents than the accommodation services industry.^Note 

Operators in the food services and drinking places subsector are facing changing economic conditions over the near term. Economic implications of trade tensions with the United States reach far beyond businesses involved in cross-border commercial activities. Service providers, including restaurants, may experience changes in costs, wages and consumer spending.^Note  Additionally, with one in five jobs in the food services and drinking places subsector filled by a non-permanent resident employee in 2023, the reduction in the targeted share of temporary residents to 5% of the total Canadian population by the end of 2026^Note  may impact labour supply. As of April 1, 2025, there were 2,959,825 non-permanent residents in the country, or 7.1% of the population. This is down from 7.4% on October 1, 2024, with a decrease of 61,111 since the start of the year.^Note Note 

Finally, as technological advances continue to reshape various sectors, concerns about workforce reductions driven by automation and artificial intelligence (AI) have grown. However, recent empirical analysis^Note  shows that employees in industries such as accommodation and food services face relatively lower exposure to AI-related job transformation and downsizing.