‘Our survival is really in jeopardy’: B.C. restaurants fear changes to COVID-19 subsidies

Click to play video: 'Uncertainty as Ottawa ends wage and rent subsidies' Uncertainty as Ottawa ends wage and rent subsidies
The Canada Recovery Benefit along with wage and rent subsidies are ending as Ottawa moves from a near universal benefit to targeted subsidies and as Emad Agahi reports, some businesses are facing an uncertain future – Oct 23, 2021

Big changes to Canada’s COVID-19 subsidies for businesses have some smaller B.C. restaurants worried.

“Our restaurant relies a lot on tourists and offices, we’re a lunch and breakfast restaurant in the downtown office core, neither of those two drivers have really come back for us,” Matthew Senecal, owner of the Birds and the Beets in Vancouver’s Gastown told Global News.

“Our sales are still quite a bit down from what they were in 2019 and what they need to be for us to be a sustainable, viable restaurant.”

Read more: B.C. business community wary of gaps in new COVID-19 financial support

The federal government has eliminated the long-running Canada Emergency Wage Subsidy (CEWS) and the Canada Emergency Rent Subsidy (CERS), and replaced them with two new programs more narrowly targeted at the hardest-hit businesses and the tourism and hospitality sector.

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Under the new Tourism and Hospitality Recovery Program, restaurants can get a wage and rent subsidy of up to 75 per cent — but must be able to show monthly revenue losses averaging 40 per cent along with a 40 per cent loss in the current month.

Click to play video: 'B.C. business community worried about changes to federal COVID-19 aid' B.C. business community worried about changes to federal COVID-19 aid
B.C. business community worried about changes to federal COVID-19 aid – Oct 21, 2021

“The problem with the new (program) is the 40 per cent threshold. We have many restaurants that are losing sales between 20 and 40 per cent, and with this new program they’re eligible for nothing, and that could be a death sentence for many of those restaurants,” said Mark von Schellwitz, Restaurants Canada’s vice-president of western Canada.

“If you’re down 39 per cent you get no subsidy.”

Von Schellwitz said as many as 80 per cent of Canadian restaurants are currently losing money or just breaking even, and that is with the benefit of government supports.

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Read more: Canada cancelling wage subsidy, announces $7.4B in new COVID-19 supports

A recent survey by the organization found 70 per cent still relied on government subsidies to make ends meet, and nine in 10 were facing additional problems because of the labour shortage.

He’s calling on the federal government to reduce the threshold for the new subsidy program, or at least to offer it on some kind of sliding scale.

Click to play video: 'Pandemic rent and wage subsidies coming to an end' Pandemic rent and wage subsidies coming to an end
Pandemic rent and wage subsidies coming to an end – Oct 21, 2021

Senecal said he knows of few small or independent restaurants that can show a 40 per cent loss. Those same operators, he said are still grappling with fixed costs that haven’t changed, such as rent, utilities and the cost of goods.

“It was a life-saver for us. Quite simply, we wouldn’t be in business today if it wasn’t for those government supports,” he said.

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“So with the end of this help, our survival is really in jeopardy.”

Senecal said after a strong summer, the business had begun to bounce back, but that he estimated it would take six or seven months to get fully back on their feet.

Read more: Canada cancelling wage subsidy, announces $7.4B in new COVID-19 supports

“What the government should really be doing is have programs that are accessible to all businesses, and should lower the eligibility criteria,” argued Jasmin Guénette, vice-president of national affairs with the Canadian Federation of Independent Business.

Saturday also marked the end of the Canada Recovery Benefit for unemployed workers, the successor to CERB, which is being replaced with a new benefit targeted at staff affected by lockdowns.

That change is seen by some as pushing some workers back into the market to help ease the current labour crunch.

The federal government is aiming to stretch the new programs until May 7, 2022, while seeking the ability to further amend them through July of next year.

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