With just 10 days remaining until the Federal Government enforces the Canada Emergency Business Account (CEBA) loan repayment, Restaurants Canada is urgently calling for a last-minute extension to prevent the devastating consequences facing the foodservice industry.
Despite the best efforts made by Restaurants Canada, the Federal Government has declined to extend the CEBA loan repayment deadline of January 18th, 2024. This decision leaves our members, representing thousands of restaurants across the country, with limited options to avoid bankruptcy and recover from the ongoing financial challenges that arose during the pandemic.
A startling survey of the industry reveals that 1 in 5 restaurants with a CEBA loan are now on the brink of closing one or more of their locations.
The foodservice sector has been disproportionately affected by the pandemic lockdowns, enduring the longest lockdown period in North America, which has led to a significant accumulation of debt. Additionally, the foodservice industry operates on traditionally low profit margins, rendering it further vulnerable to external pressures.
Recovery in the foodservice industry has been painfully slow because of several factors beyond the control of restauranteurs, including record-high inflation, the rising cost of food, and labour shortages. We are not asking for a hand-out; we are asking for more time.
Currently, a staggering 53% of restaurants are operating at a loss or barely breaking even compared to 10% pre-pandemic, underscoring the obvious connection to this unique and devastating period in our industry and the urgent need for further support and assistance.
Kelly Higginson, President, and CEO of Restaurants Canada stated, “People understand that restaurants are part of our social fabric, they are gathering spots to celebrate life’s milestones and achievements and the place where friends come to reconnect.” Higginson continued, “Your favorite mom and pop restaurant and local gathering place is at risk. If what the industry is telling us comes to fruition, Canadian communities will lose something very special, simply because of an arbitrary deadline.”
Restaurants Canada strongly urges the Federal Government to reconsider their decision and provide an extension to the CEBA loan repayment deadline. Immediate action is essential to prevent further closures and ensure the long-term survival of this critical sector, which contributes significantly to the nation’s economy.
In the face of these challenges, Restaurants Canada stands firmly with our members and encourages them to visit our website at restaurantscanada.org for guidance on how to navigate this difficult period and learn about available resources.
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