Restaurants seek exemption from reduced wage subsidy as Ontario closes restaurants

Restaurant owners say they are worried they will be able to continue operating when federal subsidies start to decline, even as provinces like Ontario extend stay-at-home orders or lockdowns.

A group representing the Canadian restaurant industry is calling for an exemption from the federal government’s phase-out of wage subsidy and rent programs, both of which will be phased out as vaccination becomes more widespread.

Half of the country’s restaurants risk being closed if subsidies are cut too soon, according to Restaurants Canada.

“As the most affected sector, we need these grants to continue to support us, measures like this one that keep people at work,” said Olivier Bourbeau, Vice-President of Restaurants Canada for the federal and Quebec.

Government programs currently grant companies a subsidy of up to 75 percent of wages paid and up to 65 percent of rent. As of July 4, both will be reduced to 60 percent before being phased out later this summer.

Bourbeau said even with widespread vaccinations and businesses reopened by September – which is not certain – restaurants still will not operate at full capacity due to security measures such as distancing.

“We are not 100% (percent) operational so it will be difficult for us even if we are open,” he said, adding that an average restaurant will need 12 months after reopening to return. to profitability.

Katherine Cuplinskas, press secretary to the finance minister, said in an email that businesses could benefit from other government support measures such as the Canada Stimulus Package and the Small Business Finance Program when wage subsidies and rental will cease.

“The federal government is actively evaluating its support measures to ensure workers and businesses have the support they need,” Cuplinskas said.

Restaurants Canada said there would likely be additional job losses in the industry as some provinces expand or increase restaurant restrictions.

“The current situation with British Columbia, Ontario and Quebec is really very difficult for us because everything is closed,” said Bourbeau.

Ontario on Thursday extended its home order until June 2, which restricts in-person service and outdoor dining at restaurants.

With this latest expansion, the majority of restaurant dining rooms across the province will have been closed for a total of 362 days since the start of the pandemic, Restaurants Canada noted.

“Our industry certainly won’t be back when it starts cutting costs in July,” said James Rilett, group vice president for Central Canada, in a statement after the announcement.

According to his survey data, more than eight in ten Ontario restaurants are operating at a loss or barely managing.

Rilett said Ontario’s extended lockdown “infuriates everything” and the wage subsidy “means nothing” to companies that have had to cut back on employees during the pandemic.

He said Restaurants Canada hopes the subsidies will be maintained in all provinces as restaurants are still racking up debt and still face restrictions throughout the summer.

“Withdrawing that support now doesn’t make sense,” Rilett said.

This report by The Canadian Press was first published on May 14, 2021.

This article was produced with financial assistance from the Facebook Stock Exchange and The Canadian Press.

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