Restaurants need more support
By Lethbridge Herald Opinon on July 9, 2020.
Wage subsidy reforms can help bring 70,000 Albertans back to work
Mark von Schellwitz
RESTAURANTS CANADA
Restaurants and other foodservice businesses are the third-largest source of private-sector jobs in Alberta. Collectively, the industry employs 150,000 people.
At least this was the case before COVID-19 led to as many as 95,000 foodservice workers across the province losing their jobs or having their hours cut down to zero by April.
Not only was the restaurant industry among the first and hardest hit by the pandemic, the sector will be among the slowest to return to profitability: Six of 10 Canadian foodservice businesses are still operating at a loss, even as jurisdictions across the country are moving forward with reopening plans.
With the average restaurant typically needing about a third of its operating budget just to cover labour costs, restaurateurs understandably breathed a sigh of relief on May 15, when Prime Minister Justin Trudeau announced that the federal government would be extending the Canada Emergency Wage Subsidy (CEWS) program.
A month since the announcement, however, it’s become clear that it’s going to take more than a simple extension of this program to help restaurants bring more Albertans back to work.
When initially introduced, the CEWS program was to run for 12 weeks, retroactive to March 15, limiting employers to only being able to benefit from the subsidy until June 6.
The extension announcement gave hope to many restaurant operators who were not yet ready to reopen that this assistance might still be available once they’re able to use it.
The announcement was also welcomed by establishments that have remained open since emergency restrictions were first imposed, as most restaurants that have continued to operate takeout and delivery services have done so at a loss.
But after months of significantly reduced revenue, or none at all, and now facing months of operating at reduced capacity, this is only the beginning of what will be a long and difficult road to recovery for Alberta’s restaurants.
Given this reality, they need continued government support for the long term, not just until an arbitrary end date.
The wage subsidy should continue to be available to businesses as needed, to keep them from falling off cliffs when the assistance they’re receiving with payroll suddenly drops from 75 per cent to zero. Instead, a smooth ramp of support that reduces as a restaurant gets closer to manageable levels of revenue variance would be the best way to extend the program.
The requirement to demonstrate a 30 per cent decline in revenue should also be scaled to remove any concern that increasing sales could result in losing access to the subsidy. This would help restaurants hang onto their staff while they’re still working on generating enough revenue to no longer need government support.
The wage subsidy has already helped Alberta’s restaurant industry recover more than 7,000 jobs initially lost during the pandemic. But at least 70,000 people previously employed in the foodservice sector were still out of work across the province in May.
Reforming the wage subsidy will give restaurants greater capacity to bring more of these Albertans back to work.
Mark von Schellwitz is Vice-President, Western Canada at Restaurants Canada, a national, not-for-profit association advancing the potential of Canada’s diverse and dynamic foodservice industry.
22-21
most telling is that restaurants are the 3rd largest private employer in alberta. an awful lot of people earning min wage; that is to say, an awful of working poor (save for those that make a decent living via tips…although alberta is known for its oversampling of curmudgeons who are pathetically cheap and do not tip).
Seems like we have a lot of non-working poor now that our response to covid-19 has caused a lot of self-inflicted wounds and decimated the economy. Like so much of our ‘news’ these days it’s a lot of fear and panic and calls to rely on gov’t without much context, so that we can make rational decisions. (Would be interesting to have a discussion about ‘minimum wage’ too, and how it might play a role in suffering this industry and it’s workers are experiencing). A lot of risk in whichever way we go, but such is life. Always turn to those who inflict the damage to save you! Some big bills are coming due soon… already lots of talk around that property tax bills will be going up 30 plus %, and to tax the ‘rich’, which will further damage the economy, to ‘pay’ for all of this ‘free money’ I hear about going out to save everyone once the gov’t has finished shooting us in the foot. C’est la vie…
The restaurant/food services industry has always been an interesting one to me. Those that go out to eat don’t strike me as pathetically cheap, but rather perhaps pathetically lazy, bad at math, or maybe pathetically bored, but cheap? No. It’s expensive to go out to eat, especially if you have a family, and when you can eat better/healthier at home for a fraction of the cost, and then you want another 20% on top of that? I’m sorry, but how does that encourage me to go out to eat and support your establishment? I especially love all the fast food and ‘pay at the counter’ places that now beg for tips after you’ve experienced no ‘service’ and done everything yourself but cook the ‘food’. I’m sorry, but I can’t afford that and choose to eat at home. So, those that don’t eat out should be paying a tax to support restaurants as they’re the cheapest of the cheap! On your next tax return please provide receipts to prove you spent at least $1.5K at restaurants for the tax period in question, and tipped at least 15%, or you will be subject to a penalty of $2K plus 20%. I like it…good governance in action! Or even better, have the government give each Albertan $1 to $2K in covid ‘eat out’ money (adjusted for income – naturally) and lets get this circular firing squad really humming!
I really feel for those poor folks running businesses right now…. any business that is suffering during this crazy time. I’ve even started to eat out some to try and help the places I like to go, so they’re still there when all this garbage ends Nov 4th (if Trump loses).