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'Too restrictive': Restaurants Canada calling for changes to federal COVID-19 support programs

Restaurants could be forced to shut down without more assistance, says non-profit
Chef and kitchen staff preparing dinner in a restaurant kitchen.

A Canadian restaurant organization is calling for federal assistance as the sector continues to struggle amid the ongoing COVID-19 pandemic.

In a press release issued today (Dec. 8), Restaurants Canada says roughly 80% of restaurants no longer qualify for rent and wage subsidies, which could cause them to close as they suffer from massive debts. 

“Restaurants are key to reviving main streets across Canada and feeding our country’s economic recovery, but first they need to survive,” president and CEO Todd Barclay said in a statement.

"Federal support programs are currently too restrictive and will leave far too many hardworking restaurant operators out in the cold as they continue to cope with the ongoing pandemic.

"While our government has been on a break, the 90,000+ small and medium-sized businesses that make up our critically important foodservice sector have been fighting to keep their doors open. They deserve federal support programs that will help them continue contributing to the social and economic fabric of their communities."

According to a survey done by the organization, 90% of foodservice businesses have had to rely on federal rent and wage subsidies to help them survive. Now, only 20% qualify for the new Tourism and Hospitality Recovery Program

The survey also showed most restaurants have been operating at a loss or barely breaking even throughout the pandemic. Eight out of 10 operations have either been consistently losing money or scraping by with a margin of 2% or less. 

"Without better access to financial support, most foodservice businesses will struggle to keep paying their staff, and many will have to consider closing down for good under the weight of crushing debt."

Restaurants Canada is calling for the following recommendations: 

  • An eligibility threshold starting at 10% (instead of 40%) revenue decline for the new Tourism and Hospitality Recovery Program, with a wage subsidy rate that is calculated as 1.2 times the percentage decline in sales up to a maximum of 75%, to ensure restaurants can survive the pandemic
  • Greater forgiveness for all government-backed business loans and an extension of the repayment deadlines for the loans through the Canada Emergency Business Account (CEBA)
  • Tax credits or other sources of funding to defray the exorbitant costs incurred from pandemic safety expenditures

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