A new survey by Restaurants Canada reveals that most Quebec food service businesses will not have the cash to be able to welcome their customers again.
As Quebec lifts its emergency measures, restaurants will need additional support to remain viable until they are on the road to full recovery.
Survey finds most restaurants will have difficulty restoring table service.
About seven in 10 survey respondents say they are extremely or very concerned that their business does not have the cash to pay suppliers, rents and other expenses over the next three months.
Although Canada's Emergency Commercial Rent Assistance Program (AUCLC) can provide relief for some establishments, rent obligations remain a real issue for many:
At least one in five independent restaurateurs deals with a landlord who is unwilling to provide rent assistance, either through the AUCLC program or by other means.
Some 14 percent of independent restaurateurs were unable to pay their rent in April, and almost 20 percent are unable to pay for May, even if they do not have a deferral of payment with their landlord.
Restaurants Canada to Actively Support Reopening Efforts
“The resilience of our industry will not be enough to protect restaurants from the financial difficulties they will face in the coming months. With the gradual reopening of their dining rooms, they will need continued help, said David Lefebvre, Vice-President, Federal and Quebec Affairs of Restaurants Canada. This week the Quebec government hinted that restaurants would benefit from support to help them reopen their doors. This is good news, and Restaurants Canada intends to help make it happen. We are also committed to contributing to the development of reopening protocols. "
Before the COVID-19 pandemic began, the Quebec food service sector, an industry with annual sales of nearly $ 18 billion, represented four percent of the province's GDP and was the third largest private sector employers. If current conditions persist, sales are expected to fall as high as $ 3.3 billion in the second quarter of 2020, and the sector may be unable to recover the approximately 175,000 jobs lost due to the COVID-19. Restaurants Canada is optimistic that efforts to support the sector will improve these results and that the worst-case scenarios will be avoided.
Restaurant Canada urges the government to do more in the following areas to support food service businesses and give them a chance to survive:
Protection for commercial tenants and rent assistance: Although the AUCLC program helps to alleviate one of the thorniest problems for restaurants, many people cannot benefit from the protections offered by this mechanism, without it there is fault on their part. A more comprehensive rent assistance program is needed to assist those who have experienced a marked decline in turnover but do not meet the current eligibility criteria. Protections for commercial tenants also continue to be needed for those who are not eligible for this program, to reduce the pressure as stakeholders gather around the table to develop immediate and long-term solutions. Some provinces such as New Brunswick and Nova Scotia have already taken steps to this end. Quebec could follow their example and order a moratorium on evictions and harmful measures in order to protect commercial tenants until solutions are implemented.
Aid for working capital and debt level: Most restaurants are SMEs whose profit margins were low even before the COVID-19 crisis. With much reduced revenue for most food service businesses, many have already almost or completely exhausted their reserve funds. The current measures may need to be extended and new solutions put in place to ensure that restaurants have the cash to resume their activities. Due to the perishable nature of their stocks, many have suffered sunk losses with the implementation of physical distancing measures and will need support to rebuild their stocks
in order to reopen their doors.
Help with labor costs: Although the 75 percent federal wage subsidy helps some restaurants keep their staff on the payroll, those preparing to reopen are concerned they may not have access to this help over the next few months. Additional assistance from the Government of Quebec in this area would be welcome, in combination with an extension of the Canadian Emergency Wage Subsidy (SSUC) for a few months.
Source: Restaurants Canada
