Restaurants need more sector-specific support to keep feeding Canada’s recovery

Restaurants Canada welcomes a number of commitments unveiled today in the federal budget — most notably, the promise to extend the rent and wage subsidies until Sept. 25, 2021 — but is continuing to call for more sector-specific support

“We appreciate that the government has listened to our industry and others and is extending the critically necessary rent and wage subsidies beyond June,” said Restaurants Canada President and CEO Todd Barclay. “These programs are providing a lifeline to restaurants and other small businesses across the country. But our especially hard-hit industry is going to need more sector-specific support to continue reviving main streets and help the government keep its throne speech promise to bring a million Canadians back to work.”

Key Budget Promises for Restaurants

In addition to extending the rent and wage subsidies beyond June, Restaurants Canada commends the federal government for committing to the following measures to support restaurants and other hard-hit small businesses:

• A new Canada Recovery Hiring Program for eligible employers that continue to experience qualifying declines in revenues relative to before the pandemic.
• Reductions in credit card transaction fees.
• A new line of credit product to help small businesses with liquidity and cover short-term working capital needs.

“While Restaurants Canada welcomes the commitments unveiled in the federal budget to extend the rent and wage subsidies, the hard-hit foodservice industry needs more sector-specific support“

 

Further Support Needed

In response to a recent Restaurants Canada survey, nine out of 10 Canadians agreed that restaurants need assistance to stay in business and keep paying staff until the pandemic is over.

To help the foodservice industry transition from survival to revival, Restaurants Canada has also been advocating for an evolution from emergency measures to a framework that supports business continuity and favourable economic relaunch conditions for the longer term.

Restaurants Canada looks forward to discussing the following recommendations for further sector-specific support with key government policymakers at the next meeting of its Restaurant Revival Working Group.

Survival Measures

• A further extension of the rent and wage subsidies until April 2022 and eligibility criteria that continue to reflect restaurant realities: Eight out of 10 restaurants are still either losing money or barely scraping by, and those still operating at a loss expect to take at least a year to return to profitability. Cutting off these vital sources of support just as restaurants are transitioning from survival to revival would hinder their ability to recover and continue bringing Canadians back to work.
  
  
• Federal tax credits to help defray costs associated with COVID-19 safety protocols: An Employee Retention and Retraining Credit is needed to help restaurants and other hard-hit small businesses cover the costs of the unexpected and extraordinary expenses incurred during the global pandemic.
  
  
• Partial forgiveness for all government-backed loans (including the Highly Affected Sectors Credit Availability Program): Struggling foodservice businesses need more assistance to keep them from closing down due to crushing debt.

Revival Measures

• The creation of a nationwide “Dine In and Save Restaurants” rebate program: Similar to the dine-in rebate initiative implemented on Prince Edward Island, allowing Canadians to save 50% when they dine at restaurants. Under this program, table-service restaurants would receive a government reimbursement of $15 per person, per meal (50% before taxes and gratuities for up to $30 spent per patron on food and non-alcoholic beverage purchases).
  
  
• An expansion of the current “meals and expenses” business tax credit: A temporary expansion of this existing tax credit from 50% to its original 100% to encourage businesses to boost restaurant spending after more than a year of reduced downtown dining.
  
  
• A culinary tourism incentive for the 2021 and 2022 tax years: Similar to the travel incentive implemented in New Brunswick, which included rebates for restaurant spending, this would encourage Canadians to travel locally and across the country to help support and celebrate our diverse restaurants and the critical role they play contributing to vibrant communities.
  
  
• A freeze on any further excise duty increases on beer, wine or spirits under the Excise Act and Excise Act (2001): Including increases that were scheduled for April 1, 2021, as these ever-escalating alcohol duties contribute to the perception that restaurants are gouging patrons on their drink menus.
  
  
• The removal of merchant fees from the tax portion of restaurant bills: This currently allows credit card companies to profit from the taxes collected by business owners on behalf of the government and needlessly discourages restaurant spending.

“We are more than a year into the COVID-19 crisis and about 350,000 of the 1.2 million jobs that our industry typically provides have still not been recovered. We need the federal government to help us continue creating conditions to bring these Canadians back to work,” said Olivier Bourbeau, Restaurants Canada Vice President, Federal and Quebec. “Restaurant operators are resilient and resourceful, but they can’t continue to operate at a loss for months on end. They are counting on the government to ensure they can preserve their livelihoods, and continue contributing to vibrant communities across the country.”