Toys R Us Canada Closing 50+ Stores: What Workers and Shoppers Need to Know

What This Means for You

The iconic Toys "R" Us brand is rapidly disappearing from Canadian malls and shopping centres. With 38 stores already closed in 2025, 12 more up for sale, and only about 40 of the original 103 locations still operating, this retail collapse affects thousands of workers and millions of Canadian families who grew up with the brand.

Whether you're a laid-off employee seeking severance, a parent wondering where to buy toys this holiday season, or simply curious about what went wrong, here's your comprehensive guide to navigating this situation.

If You're a Toys "R" Us Employee Facing Layoff

Your immediate rights under provincial employment standards:

The minimum severance you're entitled to depends on your province and years of service. Here's what the law guarantees:

Ontario (ESA minimums):

1 week per year of service (up to 8 weeks)
Plus severance pay if 5+ years and employer payroll exceeds $2.5 million: 1 week per year (up to 26 weeks)
Example: 10 years of service = 8 weeks termination + 10 weeks severance = 18 weeks total

Quebec (Act Respecting Labour Standards):

1-2 weeks notice for 1-5 years of service
2-4 weeks for 5-10 years
4-8 weeks for 10+ years
Plus additional compensation if mass layoffs exceed 10 employees

British Columbia (Employment Standards Act):

1 week per year of service (up to 8 weeks)
Example: 6 years = 6 weeks

Alberta:

1-8 weeks based on service length

Important: These are minimum amounts. According to employment lawyers contacted by media, you may be entitled to significantly more under common law—potentially 1 month per year of service, depending on your age, position, and ability to find similar work.

What to do right now:

Don't sign anything immediately. If you're offered a severance package, you typically have time to review it. Employment lawyer Lior Samfiru advises that employees should have their packages reviewed before signing.
Document everything. Keep copies of your employment contract, pay stubs, and any termination letters.
Calculate your common law entitlement. A 45-year-old assistant manager with 12 years of service might be entitled to 10-14 months of pay under common law, compared to the 8-week ESA minimum.
Consider legal consultation. Many employment lawyers offer free initial consultations. Firms like Samfiru Tumarkin LLP, Monkhouse Law, and others have specifically addressed Toys "R" Us layoffs.

Resources for displaced workers:

Ontario: Rapid Re-employment and Training Service (the provincial labour ministry has already activated this for Toys "R" Us headquarters employees in Vaughan)
Quebec: Commission des normes, de l'équité, de la santé et de la sécurité du travail (CNESST)
Federal: Service Canada Employment Insurance

Example severance scenario:

Maria, 52, worked as a store supervisor in Mississauga for 15 years at $55,000 annually.

ESA minimum: 8 weeks termination + 15 weeks severance = 23 weeks (~$24,300)
Common law estimate: 15-18 months (~$68,750-$82,500)

The difference is significant. This is why legal advice matters.

If You're a Parent Looking for Toys

With Toys "R" Us shrinking rapidly, here's where to find toys this holiday season:

Major retailers with toy departments:

Walmart Canada — Largest toy selection, competitive pricing, available online and in-store
Costco — Bulk toy deals, especially for popular items
Canadian Tire — Growing toy selection, particularly outdoor and sports toys
Amazon.ca — Widest online selection, Prime delivery available

Specialty toy stores:

Mastermind Toys — Canadian-owned, educational focus, 68+ locations
Scholar's Choice — Educational toys and games
Local independent toy stores — Often stock unique, high-quality items

Big box alternatives:

Indigo/Chapters — Expanded toy sections, especially LEGO and games
Staples — Surprising toy selection, especially educational items

Tips for holiday shopping:

Shop early—supply chain issues can cause delays
Check flyers and price-match policies (Walmart price matches)
Consider buying gift cards to stores that are financially stable
Support local toy stores when possible

For All Canadians: Understanding This Retail Collapse

Why is this happening?

Toys "R" Us Canada's decline reflects broader retail trends:

E-commerce dominance: Amazon and online retailers capture an increasing share of toy sales
Discount competition: Walmart and Costco offer competitive pricing
Digital entertainment: Kids increasingly want digital games, subscriptions, and devices
Real estate costs: Large-format retail spaces are expensive to maintain
Ownership changes: The brand has changed hands multiple times since the 2017 U.S. bankruptcy

According to retail consultant David Gray of DIG360, he's "not surprised they're pulling back" given these market pressures.

The Canadian ownership story:

2017: Toys R Us USA files for bankruptcy
2018: Fairfax Financial Holdings buys profitable Canadian operations
2021: Sold to Doug Putman's Putman Investments
2025: Mass closures begin as turnaround efforts stall

Interestingly, Canadian toy sales are growing. Industry data shows toy sales up 18% in early 2025—but smaller specialty stores and online retailers are capturing that demand, not large-format chains.

The News: What Happened

Toys "R" Us Canada has closed at least 38 stores in 2025 and listed 12 more locations for sale, according to HR Reporter and multiple news outlets. Only approximately 40 of the original 103 Canadian locations remain operational.

The most recent closures affect Quebec significantly. According to notices filed with Quebec's labour ministry, stores in Quebec City, Laval, and Brossard will close on January 5, 2026, with 68 employees losing their jobs at those three locations alone. After these closures, only one Toys "R" Us location will remain in Quebec.

In Ontario, five stores are closing: London (Argyle Mall), Thornhill, Mississauga (Hurontario Street), Sudbury, and Stoney Creek. The company's Canadian headquarters in Vaughan, Ontario has also been affected, prompting Ontario's labour ministry to activate its rapid re-employment service.

Records from Quebec's labour department show that nine store closures in that province led to 183 job losses as of September 2025. Employment lawyers report being contacted by at least 30 employees from the Ottawa region and Greater Toronto Area seeking guidance on severance.

Some closed store properties are being listed for sale—stores in Montreal, London, and Red Deer are among seven properties listed for a total of $121 million, according to commercial real estate reports.

Analysis: Why This Matters

This retail collapse represents more than nostalgia—it signals ongoing challenges for large-format specialty retail in Canada.

The math doesn't work for big-box toy stores:

Consider a typical Toys "R" Us location: 30,000-45,000 square feet of retail space, requiring substantial lease payments, utilities, staffing, and inventory. That space needs to generate enough sales to cover these fixed costs, and competition from Walmart, Amazon, and specialty stores makes that increasingly difficult.

What happens next:

Based on current trends, we anticipate:

More store closures in early 2026
Possible conversion of remaining stores to smaller formats
Continued job losses for retail workers
Properties may be redeveloped for other uses (residential, warehousing)

The broader retail lesson:

Toys "R" Us Canada's struggles mirror those of other specialty big-box retailers. The successful retailers in 2025 are either:

Ultra-convenient (Amazon, same-day delivery)
Ultra-cheap (Walmart, Costco)
Ultra-specialized (Mastermind Toys, local specialty stores)

The middle ground—large stores with medium selection and medium prices—is disappearing.

Your Action Plan

If You're Being Laid Off:

This week:

Request written confirmation of your termination date and any severance offer
Gather all employment documents (contract, pay stubs, performance reviews)
Apply for EI at Service Canada (you can apply as soon as you're terminated)

This month:

Have your severance offer reviewed by an employment lawyer (many offer free consultations)
Update your resume and LinkedIn profile
Register with provincial employment services

Before signing anything:

Understand the difference between ESA minimums and common law entitlements
Check if the offer includes continuation of benefits
Verify if you're waiving any rights by signing

If You're Holiday Shopping:

This week:

Check if your local Toys "R" Us is still open and whether it's offering liquidation sales
Make a list of alternative retailers for specific toys
Compare prices online before purchasing

Pro tip: Liquidation sales aren't always the best deals. Compare prices with Walmart and Amazon before assuming store closing discounts are worthwhile.

Other Perspectives

Company Position:

Toys "R" Us Canada has characterized the closures as "business optimization" and a strategic restructuring to ensure long-term viability. The company is also expanding its HMV music retail concept in some remaining locations, according to CBC News.

Employment Lawyers:

Legal experts emphasize that workers are often entitled to more than minimum severance. "Many employees don't realize they may be entitled to common law severance, which can be significantly more than the statutory minimum," according to employment law firms representing affected workers.

Retail Analysts:

David Gray of DIG360 notes that while the closures are unfortunate, they reflect market realities. The toy retail sector is actually growing, but demand is shifting to specialty stores and online retailers that offer either lower prices or better curation.

Affected Workers:

Employment lawyers report being contacted by dozens of workers, many concerned about receiving adequate severance. Some workers with 10-20 years of service face particularly challenging situations, as finding equivalent retail management positions becomes more difficult.

Corrections Policy

We strive for accuracy. If you find an error in this analysis, please email us at [email protected]. We will promptly investigate and correct any factual inaccuracies.

Updates:

No corrections to date (as of December 5, 2025)

Employment Insurance Guide: Understanding EI eligibility and benefits
Service Canada: Official EI application portal
Ontario Employment Standards: Know your rights

Sources

CBC News: "Toys 'R' Us Canada closing 5 stores in Ontario, revamping others and expanding HMV"
HR Reporter: "Toys 'R' Us Canada closing 38 stores, 12 up for sale"
BlogTO: "Toys 'R' Us closing dozens of stores across Canada including multiple in Toronto"
The Beat 92.5: "Toys R Us to Completely Shut Down, With Only One Store Remaining in Quebec"
Monkhouse Law: "Toys R Us Layoffs Canada: Employee Rights & Severance Options"
Samfiru Tumarkin LLP: "Toys R Us Closing Stores in Canada (2025) | Layoffs"