BC Restaurant and Food Services Association President Ian Tostenson says restaurant owners will likely need more time to pay back the funding they received from the Canada Emergency Business Account during the pandemic.
Restaurants Canada is calling on Ottawa to consider it’s 36-month payback extension proposal ahead of the December 31st repayment deadline.
Tostenson told Vista Radio like many businesses, restaurants are feeling the crunch of other cost-related measures.
“We’ve got a major cash flow issue in our industry right now along with all small businesses due to the issues we have been hit with post-pandemic, which have been tragic for our industry, which is inflation, labour shortages and the increase in labour costs like minimum wage.”
As for what the repayment plan would look like, Tostenson gave a brief snapshot.
“For example, if in year three you pay it all back, you pay the whole $60,000 back. If you pay it back within a year and a half you would get $10,000 worth of forgiveness, so it’s on a scale and I think it makes a lot of sense and it also shows during that time of year (December) cash flow is key.”
Industry stakeholders such as Tostenson also want to be in lockstep with all levels of government to help ease some of that financial burden.
“As inflation comes down, as consumer confidence goes up and as interest rates start to ease a bit that will help. But, at the end of the day, the question is – is the consumer willing to pay $25 for a hamburger, we have to stop all this cost pressure on restaurants.”
“There was really good hope when we came out of the pandemic. We did anticipate the extreme problems with the labour shortage so we are seeing some restaurants having to close on certain days or hours of the week to accommodate their staff, which is terribly important because we don’t want to burn them out. But, they are operating at about 80% capacity.”
Bankruptcy filings in food service have increased by 116% since last year.
83% of table service and 56% of quick-service restaurants and not-for-profits received interest-free loans of $60,000 from the federal government.
According to Restaurants Canada, every operational cost is on the rise due to inflation – this includes utilities (6%), beef (9%), seafood (11%), chicken (13%) and cooking oil (40%).