Restaurants are asking for help, we should listen

I wrote an Opinion piece I submitted to local papers on the crisis our restaurant industry is facing. I’m not sure if it’ll get picked up or not, but I figured I’d share it here anyways. Enjoy:

Restaurants are asking for help, we should listen

By Joel MacLeod

The COVID-19 pandemic hit our economy like a freight train. In the course of a week entire industries came to a grinding halt.  In particular the restaurant industry has been devastated by the onslaught of COVID-19.  To date the industry has reported an estimated 800,000 job losses as restaurants have reduced their hours or been forced to shut down entirely.

The federal government has stepped up to assist workers and businesses with the new CERB as well as wage subsidy for businesses to help keep their workers on payroll.  While this will help restaurants with their labour costs, the dilemma of still maintaining payments on rent and loans persists.  At the present there is no clear plan to address this issue.  Restauranteurs are left to their own discretion to ask landlords and their banking institutions for abatements or leniency until this crisis blows over.  Some landlords are willing to assist their tenants, while others simply refuse due to their own financial circumstances.  What is needed is a clear plan of action from government to allow restaurants to maintain their business through this crisis.

We’re going to need our restaurants when this ends.   The restaurant industry is a vital part of our economy.  According to Restaurants Canada the industry generated just over $90 Billion in revenue last year, contributing 4% to our national GDP.  The value of the industry spills over into other sectors as well.  The agricultural industry is heavily dependent on restaurants as they are a regular and significant purchaser of produce and meats.  In addition, between sales taxes on both food and beverage, property taxes, as well as business taxes on top all that, the industry is a significant source of revenue for all levels of government.

When the all clear is sounded, the economy is going to need a mechanism to inject billions of dollars quickly into the system.  The restaurant industry is poised to be the perfect delivery system.  There is no industry branding issue that is driving away customers as a whole.  It is just the state of the global pandemic that is putting a stopper in demand.  That demand isn’t going to subside.  I predict it is only going to build the longer we are maintaining our social distancing measures.  However, when those measures end millions of Canadians will be looking to socialize and frequent our favourite establishments.  The injection of millions of dollars back into a starving economy will help to stimulating job growth.  This stimulus will continue to feed into supply and logistic chains giving farmers and food processors a much-needed boost as well.  The impact will be significant and needed post COVID-19.

This all rests on the state of the industry though once the crisis has past us.  It remains to be seen if it will be in a position to do anything.  Right now, the industry is anemic and dying a slow death in some cases.  Restauranteurs across the country are coming together to try and put the pressure on leaders to save the industry by supplying restaurants with a badly needed bailout. and are the two most noticeable movements that have arisen out of this crisis.  They are requesting assistance from government to help protect them through this difficult period.  Amongst other items, they are looking for the pause of collection of HST, federal and provincial as well as property taxes, the abatement of rent for all hospitality businesses, as well as the pausing of rents until a proper aid package can be implemented to restauranteurs.

Lastly, they are proposing an injection of much needed cash into the hospitality industry through forgivable loans guaranteed by our government.  This will help bring much needed cash flow to help restaurants get through this unprecedented challenge.  Allowing them to weather the storm and to reopen once the crisis is over.  The risk of letting restaurants go under is too great.  Landlords and banks cannot afford to let the amount of real estate under consideration turn into boarded up storefronts.  If the industry fails now, restauranteurs will be hard pressed to come up with new funds of capital to reopen if they are forced to declare bankruptcy. 

Already Canadians are rushing to help their local restaurants through take out and delivery.  In Hamilton, Burlington and Oakville, Facebook groups highlighting locally owned restaurants in need of patronage.  They are showing their support for local businesses, it’s time for our elected officials to do the same.


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