Half of Canada’s independent restaurants could close without help, industry group warns

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Toronto restaurants face lasting impacts from COVID-19
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As many as half of Canada’s independent restaurants could permanently shut down due to the coronavirus pandemic, according to an industry group.

Restaurants Canada — which is seeking government assistance for struggling eateries — says it recently conducted a survey that sheds light on the peril the industry is facing.

If improvements aren’t seen in the next three months, one out of every two restaurants that responded to the survey said they expect to go under, and “most” businesses with multiple locations say they will have to close one restaurant at least.

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“Over the last month, we’ve heard just so many stories from these small, independent restaurateurs that literally, on a daily basis, are struggling with making that decision of whether or not to permanently close,”  Mark von Schellwitz, Restaurants Canada’s VP for the western region, told the John Oakley Show on Global News Radio.

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Seventy-five per cent of restaurants that responded to the survey are “very or extremely concerned” about debt levels.

The group is welcoming plans for commercial rent relief, a federal measure that is being worked out in consultation with the provinces, though the details have yet to be unveiled.

Restaurants Canada is calling for a moratorium on restaurant evictions and lockouts. They also say rent-assistance levels should be tied to percentages of decreased revenue, and that such supports need to be sustained as the economy recovers.

“What we’re hearing is … we recognize and we certainly appreciate all of the deferrals and loans that are being offered to us in the short term, but in the long term this is just going to contribute to more permanent closures as this insurmountable debt continues to mount,” von Schellwitz said.

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Many restaurants across Canada have shut down completely during the pandemic, while others are operating on a delivery and takeout basis but not making comparable revenues.

Restaurants Canada said 800,000 people have already lost their jobs, and restaurant sales for the second quarter of 2020 are poised to decline by $20 billion.

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The federal government has already announced an emergency wage subsidy of up to 75 per cent for employers. It’s also backing interest-free bank loans of up to $40,000 to help businesses ride out the pandemic.

Restaurants Canada said its survey was conducted between April 15 and 21. The results are based on 914 completed surveys, which the organization said represents a total of 11,856 restaurants across Canada, as many of the respondents have multiple locations.

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