Eighteen lobby groups and businesses from across Canada are warning that the future of the restaurant and food-service industry is at risk unless governments alter COVID-19 pandemic relief programs to further reduce their costs and encourage Canadians to dine out again.
The Canadian Chamber of Commerce, Restaurants Canada and brewing giant Molson Coors joined 15 provincial, territorial and municipal boards of trade in signing a letter Monday to Canadian governments asking for better rent relief, a halt to alcohol tax increases, expanded alcohol licensing, wider bans on commercial evictions, and reductions or deferrals on property taxes, utility charges and patio fees.
The letter makes these requests to all three levels of government, and specifically asks Ottawa to “encourage Canadians to return to pre-COVID activities while observing safety measures, such as masks.”
Restaurants run on thin margins in the best of times, and many closed permanently within a month of widespread pandemic-related economic shutdowns in March. Closings have climbed ever since then. Even as jurisdictions have begun reopening, many have kept strong restrictions, such as only allowing physically distant dining on patios – significantly reducing restaurants’ potential revenue and leaving questions hanging about how the sector will survive the coming months.
“The economy was put in a medically induced coma,” Perrin Beatty, the national chamber’s chief executive, said in an interview. Restaurant owners were the hardest hit by the economic shutdown, he said, arguing that governments “have a responsibility to help these businesses get to the other side.”
Restaurant owners across the country have raised this alarm for months, and worry pandemic relief programs have so far been short-sighted and unhelpful – “Band-Aid solutions for the here and now,” said Bill Pratt, a Nova Scotia restaurateur with 19 restaurants across the Maritimes.
Mr. Pratt is worried about the long-term damage to his industry, fearful that any resemblance of normalcy it has seen during patio season will be short-lived. “We have this thing in Canada called winter,” he said. “When patios dry up in winter, and we’re forced inside with 50-per-cent seating, the possibility of a second wave and everyone wearing masks – we’re done.”
Employment in the accommodation and food-services sector was down 33 per cent in June from prepandemic levels, at 820,000 people, according to Statistics Canada. The sector hit a low of 614,400 in April. Restaurants Canada said it has received supplementary data from Statscan that showed 200,000 of those employed in the sector in April received no hours.
Monday’s letter adds to a chorus of voices from the sector warning of a dire future. Two weeks ago, in a survey of 947 food-service operators, Restaurants Canada found more than half were losing money under COVID-19-related restrictions. Statscan said in June that output in the sector fell by 40.8 per cent in April alone.
Andrew Oliver, CEO of the Oliver & Bonacini restaurant group and a frequent commentator for the industry, said last month he expected half of all restaurants to close by the end of the year without support. On Monday, he said things could now be worse; half would be the “new baseline” for how many would close for good because of the pandemic. Governments need to design programs to save the other half, he said.
“Without patios leading into the fall, the real chance of added restrictions or shutdowns would obviously speed the demise up,” Mr. Oliver said in an e-mail.
The letter’s signatories applauded the federal government’s announcement last week of revisions to the Canada Emergency Wage Subsidy program to allow more businesses to access funding. The program had previously only been available to employers whose revenue had declined by 30 per cent or more. The program was also extended until December, though some entrepreneurs worry that is still not long enough to allow them to survive the pandemic’s damage.
Rent remains the biggest fixed cost for most restaurants and other small businesses. But the federal government’s program to deal with it, Canada Emergency Commercial Rent Assistance, has become one of its most widely criticized. In large part, this is because the onus is on landlords to apply, and uptake among them has been lower than widely hoped.
The signatories want Ottawa and the provinces to extend CECRA beyond July and expand the program’s eligibility requirements. They’re also asking more provinces to ban commercial evictions for small businesses that are eligible for the program, but whose landlords have opted not to apply.
Many of the signatories, in particular Restaurants Canada, made these kinds of demands earlier in the pandemic. “This is just an effort to put them together and say: These are the things we need for our industry to survive,” said James Rilett, Restaurants Canada’s vice-president for central Canada.
Asked about the letter Monday, federal Finance Ministry spokesperson Maéva Proteau said in an e-mail that “We recognize that some industries, like restaurants and the food industry service have been hit hard,” and highlighted both CECRA and wage-subsidy changes as opportunities for relief. “Our government will continue to do whatever necessary to support workers, businesses, and our economy as we deal with the COVID-19 pandemic.”
Restaurant owners such as Mr. Pratt have had to cut costs significantly to keep their businesses going. He’s already had to sell vehicles and equipment and is considering closing several locations. With no promise of a CECRA extension to August, Mr. Pratt is facing full rent payments on Aug. 1 – the day after his second-quarter HST payments are due and a month after his first-quarter HST payments were paid.
All this is while his sales are down 53 per cent and he’s taken out far more loans than make him comfortable. Mr. Pratt says he hopes governments consider the consequences of inaction with the sector. “Look at the billions and billions of dollars that will be lost in taxes when these restaurants close,” he said, “and look at the burden on society.”
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