In defence of those additional ‘COVID fees’ that are hiking costs at a precarious time

Few economic statistics bug people like the inflation rate.

Scientifically sound, the inflation rate doesn’t square with the lives a lot of us live. Inflation has been a virtual non-issue for decades, but we all have significant, high-visibility costs in our lives that have risen a lot. Home insurance and postsecondary education are two examples.

Get ready for more. The official inflation rate in June was 0.7 per cent, but costs here and there are starting to creep higher. One of the ways this is happening is through what are being referred to as “COVID fees” – extra amounts tacked onto your bill for goods and services to cover costs related to the pandemic.

A restaurant my wife and recently visited in Ottawa says on its menu that a $5-per-guest fee will be added to bills to help cover extra costs from meeting COVID-19 regulations. According to news reports, dental offices and hair and nail salons have been adding similar fees in amounts between $7 and $18 to cover the cost of masks, gowns and other equipment.

Businesses are as much a victim of the pandemic as households. But if the pandemic hit you hard in a financial way, it can seem insensitive or worse when a business asks you for extra money.

A lot of people can afford it, though. Just look at the latest statistics on consumer spending.

TD Economics reported Monday that personal spending increased 5.4 per cent on a year-over-year basis for the first week of August. Remove spending categories that face restrictions because of physical distancing (travel and entertainment, for example), and you have spending growth of 18 per cent. Spending growth was described as healthy in all provinces, notably in Toronto, thanks to the lifting of economic restrictions.

RBC Economics has already said that people spent 3 per cent more in July, the first year-over-year increase since the pandemic began. “While spending in many categories was flat in July, spending on self-care and dining improved,” RBC said.

Like individuals, businesses have received government financial support during the pandemic. But between extra costs incurred to stay open and the burden of physical distancing, some businesses are struggling to survive.

A parliamentary committee was told last week that many businesses in the hospitality industry have lost between 70 per cent and 90 per cent of their revenue as a result of the pandemic. Roughly one out of seven small and medium-sized businesses said they were at least thinking about closing or declaring bankruptcy at the end of June, according to a survey by the Canadian Federation of Independent Business.

At the end of March – let’s hope that was the pandemic’s nadir – I published a list of 27 ways for the financially fortunate to help out in my free e-mail newsletter, Carrick on Money. One reader said it was “the most important article you’ve ever written,” and many others were supportive as well.

COVID fees are another way the financially fortunate can help out. The outdoor patio of that restaurant with the $5-a-person COVID fee was really pleasant. Paying an extra $10 to help ensure this kind of socializing remains on the table, so to speak, seemed fair.

Paying an additional fee to dentists may seem a bit much, but consider that dental practices also employ hygienists, receptionists and others. The COVID fee you pay to have your teeth cleaned helps keep these people safe and employed.

What businesses owe their customers is clear, prominent disclosure of their COVID fees. Customers should see the fee when they walk into a store or restaurant, and have it clearly listed in their bill.

Also, COVID fees have to end at some point. A backlash is coming if they turn into a new version of the fuel surcharges that transportation companies introduced when energy prices were high and then left in place when oil prices fell.

If you can’t afford to pay a COVID fee, say so. There’s no shame in having lost a job or income in a pandemic. But if you’re in the majority who can pay, then accept the fee with grace. Consider it a way for the financially fortunate to support the businesses we rely on and enjoy.

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