Reduced summer subsidies will hurt eateries
Many restaurants are drowning in debt, writes Mark von Schellwitz.
Summer is here and Alberta's restaurant operators are finally seeing the light at the end of the dark, dark tunnel of the ongoing global pandemic. While they are grateful for the support that all levels of government have provided to help them get this far, survival is still uncertain for many.
As much as they would like to stay focused on welcoming back their regulars, placing more orders with local farmers and creating more jobs for the communities they call home, all these things became a lot harder on July 4, the day when they started losing access to the federal rent and wage subsidies.
That's because after more than a year of operating under severe restrictions, most restaurants are drowning in debt that they had to incur just to keep the lights on.
The devastating impacts of this pandemic have not been felt equally by all Albertans. The stark reality is we can't talk about revival and recovery if so many restaurants and small business owners are still struggling to survive. Nearly half of all food-service establishments have been losing money every day of the pandemic.
They now face a long and difficult road to recovery, and will likely need at least a year to return to some semblance of normal. While some sectors might be ready to resurface, in full force, from the COVID -19 tunnel, our local restaurants are still in it.
Scaling back their subsidies before they're able to stand on their own feet again will endanger an industry that is crucial to rebuilding our country's economy.
Something that most Albertans don't realize is that at least 95 cents of every dollar we spend at a restaurant goes directly back into our communities. That's because even during the best of times, a typical Alberta restaurant has a pre-tax profit margin of less than five per cent. No other sector keeps so little in profit and returns so much to our economy: 95 per cent of all restaurant revenue typically goes toward local jobs, purchases from Canadian farmers, food and beverage producers and other food-service industry suppliers, contributions to charity and more.
Restaurants are also key to bringing nearly half a million Canadians back to work. According to the May Labour Force Survey from Statistics Canada, nearly two-thirds (63.8 per cent) of the 571,000 jobs that are still missing from the Canadian economy due to the COVID-19 pandemic are from the food-service sector. This includes roughly 57,000 Alberta food-service workers who have not yet returned to jobs in the province's restaurant industry.
Restaurants are eager to bring these jobs back, but first they need to survive. On behalf of our hardest-hit sector, Restaurants Canada is urging the federal government to at least keep the rent and wage subsidies at their current levels over the summer.
We need to keep our local restaurants in the picture so they can keep feeding Canada's recovery — literally and figuratively — and ultimately help Prime Minister Justin Trudeau fulfil his throne speech commitment to bring back one million jobs.
If we want to build back a stronger, more sustainable economy that continues to reflect our country's incredible diversity, our industry is the best place to start.
Visit Supportrestaurants. ca to find out how you can help us raise our voice and save restaurants.