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Restaurants need help

April 3, 2020   ·   0 Comments

By Laura Campbell

Dear Prime Minister Trudeau, 

Dear honourable members 

of the House of Commons,

First off, we’d like to thank you for all of the hard work you are all doing to address the COVID-19 pandemic across the country. These are indeed extraordinary times, and you are doing everything you can to address the immediate and long-term challenges that we are all facing. 

Secondly, we are completely aware that every industry in our big, complicated, economy is being affected by this. By no means do we think that the restaurant industry should be ‘saved’ at the expense of everyone else. But the following appeal will hopefully make the case that addressing the specific challenges of our industry will hopefully alleviate many of the broader economic issues that the pandemic has brought on. 

Restaurants have been part of the human story for (almost) ever. They have survived wars, dictatorships, influenza, crop failures, natural disasters, and beyond. They are probably one of the most common gathering points for our species. They are the cornerstones of our neighbourhood and vital parts of our communities. Despite miniscule profit margins, they are so much more than the food they serve- they also fuel a wide variety of other businesses (linen service, produce, alcohol, farmers, graphic designers, etc). 

We understand that in order to keep us all safe, the majority of restaurants have to close. There is simply no way to guarantee that the virus remains contained in the context of a busy dining room. While take-out services and delivery are an option for some spots, they are not a viable alternative for all restaurants when you consider the overhead required to operate a restaurant, especially as people are rightfully deciding to prepare food at home. It is a risky business strategy to pivot to mainly takeout, in an already risk-ridden industry. 

Restaurants are so much more than what they provide to the world, they are also primarily a way of life. They are the livelihood for hundreds of thousands of Canadians, often some of the most economically vulnerable in our society. Whether single parents, those left behind by the slow decline of manufacturing in Canada (especially in textiles, for instance), new Canadians (such as the Sri Lankan community in Toronto), artists, musicians, students, or those who simply need to pay their bills while they are between careers. The work is hard, and the hours are long. And unfortunately, the wages are often never enough to make ends meet. Most can’t just ‘go get another job’… working in a restaurant is ‘the end of the line’ for many. It is often ‘the other job’ they got after a layoff in another industry. Unlike a welder in the oil sands, whose skills are transferable, cooking an omelette only makes you money in one commercial context. 

Therein lies the problem where it comes to the mass layoffs that are happening in our industry right now. Whether you’re a line cook at a high-end steakhouse or a waitress at a small diner, or even the owner of these businesses, the wages aren’t great at the best of times. When these folks apply for EI, they will most certainly fall far below what is needed to pay their rent, or their mortgages, or provide food for their families. Employment Insurance will not help them. It will be too little. 

It has already become very clear that our banks are mostly unwilling to lose any money during this crisis. Mortgages and rents will not be forgiven, merely ‘deferred,’ at which point banks will make more money in interest payments. But what happens when both restaurants and their workers can no longer pay their rents? Mass evictions? During a pandemic? Perhaps there won’t be evictions allowed. But then who exactly will make up the shortfall in payments down the road? The economic dislocations will be deep, and will affect everyone’s bottom line- even those of our largest, most financially stable corporations. 

All of these unknowns can be worked out if the government considers support specific to restaurants, in addition to some kind of ‘basic income’ legislation for all Canadians as has already been suggested elsewhere. A basic income guarantee right now will mean that everyone can pay for a roof over their heads, basic utilities, and food. It will ease the burden of the CRA to figure out who qualifies for what. 

In the coming months, as places re-open (hopefully soon), restaurants will need relief on payroll taxes. I urge you to consider this and work with your provincial counterparts to make this work. This temporary measure is something tangible the government can do to ease the financial burden that restaurants will face in the months following this crisis. 

Please also consider a ban on evictions during this crisis, as there is no way for most small restaurants, especially, to make up rent shortfalls in the months ahead. 

Please consider a bottom-up approach to the bailout you are preparing. 

Thank you for your consideration and thank you for everything you’re already doing, 

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