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Immigration Policy Changes Impact Canadian Restaurant Workforce and Growth

Naan Kabob, a Toronto-based restaurant group founded by immigrants, is highlighting growing concerns within the hospitality sector as recent changes to Canada’s immigration policy begin to affect workforce stability and long-term growth prospects. The company began as a small, family-run restaurant rooted in the belief that education, hard work, and participation in the local economy could lead to opportunity. From its first location in 2010, Naan Kabob expanded to ten locations across the city by 2024. According to Fahim Ahmadi, VP of Marketing and Development, that expansion was driven by disciplined operations, formal business education applied to daily decision-making, and access to immigration pathways that enabled newcomers to join the workforce, develop skills, and build long-term careers. That model is now under pressure. Canada’s 2025–2027 Immigration Levels Plan sets permanent resident admissions at 395,000 in 2025, declining to 365,000 by 2027. These figures are significantly lower than earlier federal projections of approximately 500,000 permanent residents annually. The plan also introduces formal targets for temporary residents for the first time, including international students and foreign workers, with new arrivals set at 673,650 in 2025, 516,600 in 2026, and 543,600 in 2027. In addition, the federal government has stated its intention to reduce the temporary resident population to less than five percent of Canada’s total population by the end of 2027, down from recent levels above seven percent. Restaurant operators say this policy shifts have immediate operational consequences. Reduced immigration intake means fewer newcomers entering the labour force, particularly in hospitality roles that are consistently difficult to fill locally. Kitchen staff, servers, and support personnel have historically included a high proportion of newcomers, students, and temporary workers. The restaurant industry employs more than 1.2 million people in Canada and contributes over $110 billion annually to the economy. However, it is also one of the country’s lowest-margin sectors. Most full-service and fast-casual restaurants operate on margins of three to five percent in strong years, leaving little capacity to absorb sudden increases in labour costs. Rising food prices, tariffs on imported ingredients and equipment, wage pressure, and annual rent increases have further constrained operators. “As a founder, I applied my education to build structure where many small businesses fail - standardized training, cost controls, leadership development, and responsible expansion,” said Fahim Ahmadi , VP, Marketing and Development of Naan Kabob. “We invested in people, promoted from within, and supported local suppliers and neighbourhoods. Immigration pathways allowed us to build stable teams that stayed, learned, and grew with the business.” Industry observers note that labour is often the most sensitive variable in restaurant operations. When experienced workers are unable to renew permits or transition to permanent residency, restaurants face increased overtime costs, employee burnout, and reduced operating hours. Expansion plans are frequently delayed or cancelled, not due to weak demand, but because staffing stability becomes uncertain. At Naan Kabob, planned growth initiatives intended to create additional local jobs and expand service into new communities are currently being reassessed. The company states that the primary constraint is not customer demand, but the ability to staff locations responsibly while maintaining quality and long-term sustainability. Hospitality has long served as a primary entry point into the Canadian workforce for newcomers, providing first jobs, skills development, and pathways into management. The sector also supports interconnected industries such as agriculture, food distribution, logistics, commercial real estate, and local retail corridors, amplifying its economic reach. Industry operators note that immigration policy must align with demonstrated labour needs. When intake levels are reduced without regard for workforce demand, labour-dependent sectors face constrained growth and operational risk. Canada’s restaurant industry, largely built and sustained by immigrants, has historically thrived when education, employment opportunity, and immigration worked in tandem. Today, operators are increasingly questioning whether current conditions will continue to support that model. For many businesses, the challenge is no longer identifying growth opportunities but determining whether the operating environment still allows those opportunities to be pursued sustainably. About Naan Kabob Naan Kabob is a family-owned Canadian restaurant group specializing in Afghan fast-casual cuisine. Founded in Toronto, they are known for preparing traditional Afghan dishes with a modern approach, including grilled kabobs served with fresh naan bread, aromatic rice, stews such as chana, and house spice blends. Naan Kabob focuses on providing a welcoming dining experience rooted in Afghan culture while offering catering services for events across the Greater Toronto Area.