Restaurants Canada calling on government to help foodservice businesses

May 11, 2020, Toronto, Ont. – A new survey from Restaurants Canada (RC) has revealed that most foodservice businesses might not have enough cash flow to successfully reopen their doors to diners.

As jurisdictions across the country move forward with lifting emergency measures, restaurants will need more support remaining viable until they are on a path to full recovery, the organization states.

About seven out of 10 survey respondents said they are either very or extremely worried that their business won’t have enough liquidity to pay vendors, rent and other expenses over the next three months.

While the Canada Emergency Commercial Rent Assistance (CECRA) program might provide some restaurants with relief, rent obligations continue to be a challenge for many. For example:

• At least one out of five independent restaurant operators are dealing with a landlord who is not willing to provide rent relief, either through the CECRA program or some other arrangement.
• Fourteen per cent of independent restaurants haven’t been able to pay rent for April and nearly 20 per cent aren’t able to pay rent for May, despite not having an agreement from their landlord to postpone those payments.

RC has published an open letter, calling on all levels of government to help foodservice businesses remain viable as they reopen their doors to diners and ramp up operations.

In the letter, RC president and CEO Shanna Munro commends the country’s restaurateurs for their responsiveness and innovation throughout the COVID-19 pandemic before calling for more government support.

“The creativity and resiliency of our industry won’t be enough to prevent widespread permanent closures as restaurants continue to struggle with insufficient cash flow and insurmountable debt,” she said.

The letter goes on to urge further action in the following areas where restaurants continue to need support to have a fighting chance at survival:

• Commercial tenant protections and rent relief: While the CECRA program responds to one of the greatest challenges for restaurants, RC says many will be unable to secure any protection or relief through this mechanism, through no fault of their own. A broader rent relief program is needed to capture businesses that have experienced a significant decline in sales but do not meet the current qualifying threshold, RC says.
• Help with cash flow and rising debt levels: Existing measures may need to be expanded and new solutions continue to be welcomed to ensure restaurants will have enough working capital to reopen their doors, RC says. Due to the perishable nature of their inventories, many suffered unrecoverable losses when physical distancing measures began and will also need support to restock as they reopen.
• Assistance with labour costs: While the federal government’s 75-per-cent wage subsidy is helping some restaurants keep staff on payroll, those that are now preparing to reopen are concerned about being able to access this support in the months ahead. While further provincial assistance is also being sought, the federal government could send a welcomed signal with an extension of the Canada Emergency Wage Subsidy (CEWS) program by a few months, the RC states.

Restaurants Canada is a national, not-for-profit association advancing the potential of Canada’s diverse and dynamic foodservice industry. The industry has lost 800,000 jobs since the COVID-19 pandemic began and is on track to lose as much as $17 billion in sales over the second quarter of 2020.