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Patio heaters won’t cut it. What will it take for restaurants to survive winter?

Click to play video '60 per cent of restaurants could close permanently in next three months, warns Canadian Chamber' 60 per cent of restaurants could close permanently in next three months, warns Canadian Chamber

The warm season is almost over, and Larry McCabe, owner of Pazzo Taverna & Pizzeria in Stratford, Ont., says his restaurant’s bottom line is already feeling it.

Since Labour Day, sales have been down 25-30 per cent compared to the summer, when revenue was already just 40 per cent what it normally is at that time of year, McCabe says.

“Since we heard of cases ramping up in the rest of the province, we’ve seen this sort of slowdown,” he says.

The novel coronavirus pandemic was a double-blow for Pazzo and other Stratford restaurants. Not only did the spring lockdown send sales plummeting as it did for the rest of the industry, it also forced the cancellation of the 2020 season for the town’s famous theatre festival, which attracts hundreds of thousands of visitors in a normal year.

READ MORE: Ontario reports 401 new coronavirus cases — highest single-day increase since early June

And now the brief boost from patio dining and out-of-towners who still flocked to Stratford during the summer is waning, McCabe says. Meanwhile, his patio heaters are on back-order, he says.

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While McCabe is confident his restaurant will get by — thanks in no small part to pizza sales — he’s worried about what the cold months could do to the industry overall.

My biggest concern is that we come out of this with no independent restaurants,” he says.

To weather the winter, the sector will need help from both government and patrons, McCabe and others told Global News.

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B.C. bar and restaurant owners say mandatory 10 p.m. shutdown rule is seriously hurting business

More than patio heaters

Support from municipalities, many of whom have extended patio season and fenced off roads to carve out extra outdoor seating space, has been “critical,” says Laura Jones, executive vice-president of the Canadian Federation of Independent Business (CFIB).

But year-long patio permits and outdoor heating aren’t going to carry the industry through Canada’s bitter winter, says David Lefebvre of Restaurants Canada.

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READ MORE: A second coronavirus lockdown in Canada? Experts discuss the likelihood

Among small businesses, only one in seven restaurants is back to normal revenue and just 20 per cent back to pre-pandemic staffing levels, according to the CFIB.

There’s no escaping it: the industry faces a cash crunch as sales from outdoor dining begin to dwindle unless the government significantly steps up to bridge the revenue drop, Lefebvre says.

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One of Ottawa’s support programs for businesses is already engineered to automatically rev up if sales decline, both Lefebvre and Jones say.

The revamped version of the Canada Emergency Wage Subsidy (CEWS) adjusts funding based on businesses’ performance, with the subsidy increasing for those who see activity deteriorate further and decreasing for those with improved revenues.

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READ MORE: Dining out during the coronavirus pandemic? Experts weigh the risk

Both Lefebvre and Jones say the current iteration of the CEWS works well for the restaurant industry. But the sector will need more help, they added.

For one, restaurants will need to rely on the CEWS beyond its current expiry date in late 2020, Lefebvre says.

Ottawa should also quickly extend and rejig its rent-relief program, Jones says.

“Getting landlords out of the equation” should be a key part of the redesign, she says.

The Trudeau government’s Canada Emergency Commercial Rent Assistance (CECRA) program has been widely criticized for leaving it up to landlords to request the aid. Many struggling small-business tenants have reported their landlords would not apply.

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A new incarnation of CECRA should also make rent relief retroactively available to small businesses who haven’t been able to access the program for months due to uncooperative landlords, Jones says.

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“Some restaurants have been shut out of rent relief for six months because their landlords won’t apply,” she says.

Restaurants Canada is also lobbying the government for stimulus spending directed specifically at the restaurant industry.

Lefebvre cites the example of the U.K.’s “Eat Out, Help Out” scheme, where restaurant patrons would receive a 50 per cent discount of up to £10 ($17) per diner for eat-in meals on Monday, Tuesday and Wednesday through the month of August.

READ MORE: Higher prices? Non-refundable reservations? How COVID-19 might change restaurants

The program seems to have worked well in part because it helped restaurants facing virus-linked capacity constraints boost sales during off-peak times, Lefebvre says.

The scheme cost more than the £522 million ($890 million) the British government had set aside for it and pushed inflation close to a five-year low in August.

McCabe, for his part, says he’d also like to see a rating system for restaurants based on their COVID-19 practices, with those going above and beyond the minimum required by law earning a higher ranking.

At Pazzo, he’s looking at air-ventilation solutions and additional barriers to separate guests, he says.

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Coronavirus: Ontario restaurant owners prepare for possible new restrictions as cases rise

What can customers do?

Customers can also make a difference McCabe and Lefebvre say.

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For customers who don’t feel comfortable dining in, opting for take-out instead of delivery usually leaves more money in the pockets of restaurant operators for establishments that don’t have their own in-house delivery service, Lefebvre says.

Gift cards and gift certificates are also a way to help restaurants get by during the lean winter months, he adds.

At Pazzo, where business is seasonal even in a normal year, “we actually are quite reliant on that as a way to bridge through the wintertime,” McCabe says.

High-end restaurants, which are more likely to serve food that won’t travel well, and downtown eateries, which have been starved of foot traffic from office-goers, will need the most support, McCabe predicts.

For now and as long as fall weather allows, “it would be really great if people decided that they’re OK being a little cold with a blanket.”