CanadaCan I claim damages from a food manufacturer if their contaminated product caused a recall that hurt my restaurant business?
Yes, you may be able to claim damages for pure economic loss if the food manufacturer breached its duty of care and your losses were reasonably foreseeable — but Canadian courts impose strict limits, as confirmed by the Supreme Court in Maple Leaf Foods.
What the Law Says
The Food and Drugs Act sets baseline safety rules for food sold in Canada — but it does not itself create a private right to sue for business losses. However, it helps define the standard of care in negligence claims.
Under the Food and Drugs Act, it is illegal for anyone to sell food that contains a poisonous or harmful substance, is unfit for human consumption, or was manufactured under unsanitary conditions. This creates a regulatory standard that courts may consider when assessing whether a manufacturer acted negligently.
While the Act prohibits unsafe food, it does not directly allow restaurants or other businesses to sue for lost profits due to recalls. To recover damages, you must rely on the common law of negligence — not the Act itself.
Statutory TextNo person shall sell food that has in or on it any poisonous or harmful substance, is unfit for human consumption, or was manufactured under unsanitary conditions.
— Food and Drugs Act, s. 4 — Prohibited sales of food
What Courts Have Said
The Supreme Court of Canada addressed this exact issue in the Maple Leaf Foods case — involving restaurant franchisees who suffered financial losses after a listeria-contaminated meat recall.
The Court held that a food manufacturer owes a duty of care to downstream businesses (like restaurants) for foreseeable economic losses caused by contaminated products — but only where there is sufficient proximity and policy does not bar recovery. The majority found such a duty existed in this case, though damages were limited by contractual and factual constraints.
What to Do
Gather evidence linking the recall directly to your lost revenue (e.g., sales records, supplier invoices, recall notices).
Determine whether you had a direct relationship with the manufacturer (e.g., contract, exclusive supply arrangement) — this strengthens proximity.
Consult a lawyer promptly; limitation periods for negligence claims in most provinces are 2 years from when you discovered the loss.
Consider whether your losses were truly 'pure economic loss' (no physical injury or property damage) — this triggers stricter legal tests.
Review contracts with the manufacturer or distributor; they may contain liability waivers or indemnity clauses.
Sources
Not legal advice. This article is general information based on publicly available sources, written for educational purposes. Laws change and individual situations vary. Consult a licensed attorney in your jurisdiction before acting on anything you read here. Last reviewed: 2026-06-08.