Restaurants Need Sector-Specific Support To Survive Devastating Pandemic Debt

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Photo by Nick Karvounis on Unsplash

Restaurants Canada is calling on all parties seeking to form the next federal government to help hard-hit foodservice businesses recover from their pandemic debt so they can continue feeding Canada’s recovery.

According to the latest Restaurants Canada survey conducted in July:

  • 8 out of 10 foodservice business operators said they’ve taken on new
    debt over the course of the past 17+ months of the ongoing COVID-19
    crisis.
  • More than a quarter (26%) of single-unit restaurant operators who said they took on new debt during the pandemic said their business will not be able to recover unless current conditions change.

“Our member surveys throughout the pandemic have consistently revealed that foodservice businesses will need at least a year to recover from this crisis,” said Restaurants Canada President and CEO Todd Barclay. “Canada’s hard-hit restaurant operators deserve a reopening plan that will ensure they can preserve their livelihoods, continue employing 1.2 million Canadians and keep contributing to vibrant communities
across the country.”

Canada’s restaurant operators are innovative and resilient, but many are still at risk of closing down from crushing debt that they are continuing to incur due to the ongoing pandemic.

Eight out of 10 foodservice business operators responding to the latest Restaurants Canada survey said they are continuing to lose money or are barely scraping by:

  • 55% said they are still operating at a loss
  • 20% said they are just breaking even
  • 9% said they are making a pre-tax profit of less than 2%

This reflects the reality that the majority of Canadian foodservice establishments are still operating at reduced capacity due to restrictions still in place within most jurisdictions across the country. In addition to these ongoing limitations, consumer confidence
in restaurant dining is still rebounding after a year and a half of “stay at home” messages from political leaders and health officials.

Working together with Restaurants Canada, the next federal government can help foodservice businesses continue playing an integral part of the social and economic fabric of our communities. Below are recommendations for measures in key areas where restaurants continue to require government support to successfully transition from survival to revival and keep feeding Canada’s COVID-19 recovery.

Restaurant Survival Support

As Canada’s hardest-hit industry, restaurants continue to need sector-specific support to survive the ongoing pandemic, including:

  • An exemption from the scheduled phase-out of the rent and wage subsidies for the highly affected foodservice sector, and an extension of these vital programs for restaurants until at least April 2022. This will be necessary, as Restaurants Canada survey data has consistently revealed that restaurant operators expect they’ll need at least a year to return to profitability once the COVID-19 pandemic subsides.
  • The option for any restaurants eligible for the wage subsidy to be able to apply for added funding through the Canada Recovery Hiring Program, so that they can hire new workers in addition to keeping the ones they already have on payroll.
  • Partial forgiveness for all government-backed loans. Currently loan forgiveness is only available through the Canada Emergency Business Account (CEBA). Restaurants Canada would like to see this as well for the Highly Affected Sectors Credit Availability Program (HASCAP) and any other loan program that the government introduces to help businesses recover from the pandemic.
  • Tax credits to defray the exorbitant costs incurred from COVID-19 health and safety expenditures.

SOURCE Restaurants Canada

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