Restaurant Industry Seeking Help to Survive

COVID-19 Impact on Business

80% of restaurants no longer qualify for wage and rent subsidies and many might have to consider closing without better access to support

TORONTO – BUSINESS – Now that Parliament has returned, Restaurants Canada is eager to get back to work with elected officials to ensure that hard-hit foodservice businesses will have enough federal support to get through the winter.

“Restaurants are key to reviving main streets across Canada and feeding our country’s economic recovery, but first they need to survive,” said Restaurants Canada President and CEO Todd Barclay. “Federal support programs are currently too restrictive and will leave far too many hardworking restaurant operators out in the cold as they continue to cope with the ongoing pandemic. While our government has been on a break, the 90,000+ small and medium-sized businesses that make up our critically important foodservice sector have been fighting to keep their doors open. They deserve federal support programs that will help them continue contributing to the social and economic fabric of their communities.”

Survey results reveal gap between available support and level of need

According to the latest survey data from Restaurants Canada:

  • Ninety per cent of foodservice businesses have relied on federal rent and wage subsidies to help them survive the pandemic, but only 20 per cent qualify for the new Tourism and Hospitality Recovery Program.
  • The vast majority of restaurants have been operating at a loss or barely breaking even throughout the entire pandemic; eight out of 10 operations have either been consistently losing money ever since the first wave of lockdowns ended last year, or scraping by with a profit margin of 2 per cent or less.

Without better access to financial support, most foodservice businesses will struggle to keep paying their staff, and many will have to consider closing down for good under the weight of crushing debt.

Recommendations from Restaurants Canada

Restaurants Canada is calling for the following changes to federal support programs to help foodservice businesses continue contributing to jobs, economic growth and vibrant neighbourhoods across the country:

  • An eligibility threshold starting at 10 per cent (instead of 40 per cent) revenue decline for the new Tourism and Hospitality Recovery Program, with a wage subsidy rate that is calculated as 1.2x the percentage decline in sales up to a maximum of 75 per cent, to ensure restaurants can survive the ongoing pandemic.
  • Greater forgiveness for all government-backed business loans and an extension of the repayment deadlines for loans through the Canada Emergency Business Account (CEBA).
  • Tax credits or other sources of funding to defray the exorbitant costs incurred from pandemic safety expenditures.
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