Survival is uncertain for eateries
Scaling back subsidies over the summer could leave half of restaurants behind
Summer is here and restaurant operators across Atlantic Canada are finally seeing the light at the end of the dark, dark tunnel of the ongoing global pandemic.
But 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 fisheries and farmers, and creating more jobs for the communities they call home, all these things became a lot harder on July 4: the day that 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 everyone in Atlantic Canada. 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 Canadians 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 Canadian restaurant has a pre-tax profit margin of less than 5 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 fishers and farmers, food and beverage producers and other foodservice 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 COVID19 pandemic are from the foodservice sector. This includes roughly 23,000 foodservice workers who have not yet returned to jobs in Atlantic Canada’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 stop the rent and wage subsidies from scaling back over the summer. We need to keep our local restaurants in the picture so they can keep feeding Canada’s economic recovery — literally and figuratively — and ultimately help the Prime Minister fulfill his throne speech commitment to bring back 1 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.