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Foodservice Industry in Canada Could Collapse Amid Coronavirus Pandemic

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The impact of the COVID-19 (coronavirus) pandemic has been devastating already for the foodservice industry in Canada with fears that it’s going to get even worse.

The numbers are staggering.

Restaurants Canada estimates 800,000 foodservice jobs have already been lost as the industry has also lost about $4 billion in sales in March. If conditions don’t improve, the organization says foodservice sales could be down nearly $20 billion for the second quarter of this year.

More troubling is that a survey by the organization indicates nearly one out of 10 restaurants have already closed permanently and another 18 per cent will permanently close within a month if current conditions continue.

SHANNA MUNRO

“Not only was our industry among the first to feel the impacts of COVID-19, we’ve been one of the hardest hit so far, with nearly two thirds of our workforce now lost,” said Shanna Munro, Restaurants Canada President and CEO. “In our 75 years of existence as Canada’s national foodservice association, these are by far the worst numbers we have ever seen.”

Restaurants Canada data shows:

  • 53 percent of restaurants are temporarily closed;

  • 46 percent of those still operating have reduced their operating hours;

  • The 800,000 people who have lost their jobs represent two thirds of the foodservice workforce;

  • Four out of five restaurants have laid off staff;

  • If conditions don’t improve, seven out of 10 restaurants still open will further reduce staff or working hours for staff; and

  • Canada’s $93 billion foodservice industry represents four percent of the country’s GDP.

“Restaurants have played an essential role during this crisis, but are also uniquely challenged by the impacts of COVID-19. We are encouraged by relief measures introduced so far that have shown the concerns of foodservice are being heard,” said David Lefebvre, Restaurants Canada Vice President, Federal and Quebec. “Without the steps already taken, the impacts on our industry would be even more devastating. In this time of crisis, it is reassuring to see governments, at all levels, come to the table with solutions.

DAVID LEFEBVRE

“We encourage everybody to abide by the rules and public safety recommendations and the public health recommendations. The biggest fear about it is that cases continue to mount and deaths continue to mount and this lasts longer than most people expect. Then you need to transition into more medium, long-term solutions because people lose more and more businesses.

“The biggest fear is the unknown. When will restaurants be able to re-open? When will the businesses be able to resume? Right now, it’s the biggest fear. People understand they need to make short-term decisions but if you need to make medium and long-term decisions it’s more complicated. Restaurants are a fragile industry. There’s already 10 per cent that have said in our survey that they’re closed and they’re not going to re-open. That gives you an idea what the carnage is out there and how it can be even worse if this thing lasts longer than expected.”

He said permanent closures are definitely skewed more towards the smaller local family-owned businesses.

KENSINGTON MARKET WHICH IS LINED WITH INDEPENDENT RESTAURANTS AND CAFES. PHOTO: CRAIG PATTERSON

Restaurants Canada is looking for the following help during this time of hardship:

  • Rent relief: Flexible arrangements are needed from landlords to allow for payment-free periods. Foodservice operators are looking for a coordinated effort led by government, coupled with no-eviction orders to relieve pressure. An injunction on evictions would allow time for governments to bring stakeholders to the table to develop immediate and long-term solutions that will work for all parties involved;

  • Access to working capital: With little-to-no sales revenue coming in for most foodservice businesses, many have already depleted their reserve funds, or soon will. Existing measures may need to be expanded and new solutions continue to be welcomed to ensure restaurants will have enough working capital to reopen their doors once physical distancing rules are lifted; and

  • Labour: An expansion of the qualifying conditions and time period for accessing the 75 per cent wage subsidy would help restaurants not only keep workers on payroll but allow those already laid off to be rehired.

Article Author

Mario Toneguzzi
Mario Toneguzzi, based in Calgary, has more than 40 years experience as a daily newspaper writer, columnist, and editor. He worked for 35 years at the Calgary Herald covering sports, crime, politics, health, faith, city and breaking news, and business. He is the Senior National Business Journalist with Retail Insider in addition to working on his own as a freelance writer and consultant in communications and media relations/training.

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