‘Full-blown crisis’: Restaurants Canada calls for federal government action

Click to play video: 'Halifax restaurants gear up for summer season amid tough economic environment'
Halifax restaurants gear up for summer season amid tough economic environment
WATCH: Restaurants Canada is calling on government to address numerous issues that are contributing to an increase in bankruptcies nationwide. The organization says the looming deadline to repay a pandemic loan is among the main contributors to the spike, with inflation close behind it. Vanessa Wright takes a look at how restaurants in the Halifax area are coping. – May 18, 2023

The restaurant industry was among the hardest hit during the pandemic, and while things are slowy returning to normal, experts say that issues involving inflation and staffing continue to threaten thousands of restaurants across the country.

The vice-president of Restaurants Canada for the Atlantic division, Richard Alexander, says the increase in food costs have dramatically impacted restaurants, challenging their ability to maintain steady business.

“When you see things like lettuce go up 40 per cent, you see fish, beef, chicken, all increase in price…what that does is it eviscerates profits,” says Alexander.

As restaurants gear up for the summer, many are worried about how inflation will impact business, as much of them are being forced to cut down on staff, and even scale back on menu items.

The director of operations for Legendary Hospitality, Jon Whitton, says food inflation has far-reaching consequences to restaurants. Vanessa Wright/Global

“(Inflation) affects cost of living of our staff, it affects every part of business, from what we buy in to what can sell,” says Jon Whitton, the director of operations for Legendary Hospitality, a franchise that owns five Halifax restaurants.

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The owner of Alexandra’s Pizza in Halifax, Istref Dembogaj, also shared that staff issues have hurt his local business.

The owner of Alexandra’s pizza in Halifax, Istref Dembogaj, says that he is worried about his business’ slow start to summer. Vanessa Wright/Global News

“We’re having a hard time with labour, employees and everything else here in this city,” said Dembogaj.

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According to Restaurants Canada, bankruptcies in the industry are up by 116 per cent since 2022.

Now, Restaurants Canada is calling on the federal government to provide a comprehensive CEBA repayment plan, a loan that was designed to provide financial relief to restaurants during the pandemic.

The deadline to repay the loan is on Dec. 31.

“What we’ve proposed to the federal government is a scaled-down approach to repaying those CEBA loans. So instead of asking for it all at once, we would pay down over a period of 36 months,” says Alexander.

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“We just need the government to act before the end of May, otherwise a lot of people are going to lose their jobs.”

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