On Feb. 25, Restaurants Canada Executive Vice President Lauren van den Berg was invited to present testimony to the House of Commons Standing Committee on Finance (FINA), which was meeting to discuss COVID-19 spending and programs.
Her presentation provided an overview of the devastating impacts that the pandemic has had on the Canadian foodservice industry, as well as an explanation of how restaurants are uniquely situated to help kick-start Canada’s economic recovery with continued support from government — mainly through extensions to the wage and rent subsidies, and forgivable portions of loans provided through the Canada Emergency Business Account and Highly Affected Sectors Credit Availability Program.
Below are highlights from the presentation. The full meeting can be viewed online via ParlVU.
Restaurants are key to feeding Canada’s COVID-19 recovery
Restaurants and the many small and medium-sized businesses that make up the Canadian foodservice sector are a critical pillar of our culture, economy and local communities. Before the pandemic struck, our industry comprised over 98,000 establishments from coast to coast to coast, contributing 4 per cent to the country’s GDP and serving about 22 million customers every day.
Something that most Canadians don’t realize is that even during the best of times, the average foodservice establishment keeps less than 50 cents of every $10 spent on a restaurant meal. The rest goes back into the economy, in the form of jobs, food and beverage purchases, contributions to charity and more.
Foodservice sales losses
Before the start of the COVID-19 pandemic, Canada’s restaurant sector was a $95 billion industry, expected to grow to a record $99 billion in 2020 and surpass the $100-billion mark in 2021.
The Canadian foodservice sector has since lost billions in sales due to the ongoing economic and public health crisis, and is forecast to lose billions more.
Essentially, two decades of growth were erased in just two months, starting around this time last year. And as the ongoing economic and public health crisis continues, our industry continues to be hardest hit.
Foodservice job losses
This crisis has had a devastating impact on employment in our industry.
Prior to the pandemic, the foodservice sector was Canada’s fourth-largest employer, directly employing 1.2 million people.
Then, COVID-19 hit and more than half of those jobs disappeared.
In fact, the foodservice sector lost more jobs in the first six weeks of the pandemic than the entire Canadian economy lost during the 2008-2009 recession. No other industry has come close to facing this level of shortfall.
There are still more than 380,000 fewer jobs in the Canadian foodservice sector than there were in February 2020, and at least 60,000 foodservice and accommodation employees not currently working any hours.
This means we have still not recovered more than half of the roughly 800,000 workers in our sector who lost their jobs or had their hours cut down to zero during the first six weeks of the pandemic.
Meanwhile, all other industries have recovered at least 85% or more of their pandemic job losses.
It is because restaurants were hit first and hit hardest by this apocalypse that they are uniquely situated to help kick-start the Canadian economy by being a significant job creator — it’s what makes our industry uniquely situated to serve as a fiscal anchor for Canada’s economic recovery.
The road to revival
Now more than ever is the time to make doing business as easy as possible.
Restaurants need continuity to make contingency plans. Government needs to empower businesses to innovate as much as possible. This includes taking a “do no harm” approach to any new tax regimes and burdensome regulatory frameworks.
Eight out of 10 restaurants are either losing money or barely scraping by and could take a year to return to profitability.
Restaurant operators are resilient and resourceful, but they can’t continue to operate at a loss for months on end.
If we want to build back a stronger, sustainable economy that continues to reflect our country’s incredible diversity, our industry is the best place to start. Because literally and figuratively, restaurants are key to feeding the recovery.