Aim: The introduction of the Healthy Food and Drink Policy in Western Australian government schools caused controversy. Of particular concern were anticipated financial difficulties associated with replacing high-margin processed foods with healthier foods that may be more labour intensive and expensive. The present study investigated the outcomes for school canteens to assess whether these concerns were realised. Methods: A multi-method approach was used to obtain data from school principals. Ten principals participated in individual interviews and 310 (44% response rate) responded to an online survey. Results: A majority of the study participants reported a favourable attitude to the Policy, both prior to and after its introduction. Most participants perceived improvements in the healthiness and quality of canteen menu items as a result of the Policy. There was a significant increase in the number of school canteens reporting break-even (19% to 28%), a non-significant decrease in the number being in profit (57% to 48%), and a non-significant increase in the number of canteens reporting a loss (10% to 16%). These results appear to be largely the result of higher-than-CPI (consumer price index) increases in food prices and a reluctance to pass these increases on to canteen users. Conclusions: The results are encouraging in the light of the new National Healthy School Canteen Guidelines. Efforts to improve children's food environments may attract criticism from a vocal minority, but are likely to receive support from key stakeholders.