Restaurants in Canada are once again scaling back New Year's Eve plans or shutting their doors altogether amid climbing COVID-19 cases and renewed public health measures across the country.

For the second year in a row, the pandemic has dampened what is ordinarily one of the biggest nights of the year -- a celebration that in good times yields sales that help carry the hospitality sector through sluggish winter months.

Eateries, bars and event venues are facing a range of restrictions, from capacity limits to rules barring dancing and outright curfews.

Many restaurateurs are now grappling with cancelled reservations or refunding tickets as the highly transmissible Omicron variant decimates the festive plans of Canadians that just weeks ago appeared a safe bet.

Brenda O'Reilly, owner of four restaurants in Newfoundland and Labrador, said two of her restaurants will be closed on New Year's Eve.

She says Yellowbelly Brewery and Public House in downtown St. John's, which is one of her most popular locations, will be open but reservations have been ``dropping like flies all week.''

Her fourth location, in the airport, is open but seeing a fraction of its usual business.

``This is normally one of our best nights of the year,'' O'Reilly said. ``From a cash flow perspective, it carries us through some of January.''

O'Reilly said she's had to cancel bands, refund tickets and manage a cancelled wedding that's been on the books for two years.

Yet her bigger concern is how Canada's restaurant industry will survive the coming year amid ongoing restrictions and rising inflation.

``Our overhead is going up ... wages are accelerating, food prices are accelerating,'' O'Reilly said. ``The only thing that's not going up for us is our revenue.''

She added: ``I'm really nervous for the viability of our sector in the next coming year. It's really challenging and stressful and mental health is becoming a huge issue in our industry.''