Canadian Restaurants Urged for Aid Amid Omicron Threat
Canadian small businesses and restaurants are facing a critical juncture as fresh COVID-19 restrictions, driven by the Omicron variant, severely impact their trade and access to vital government support. The situation has prompted a desperate call for expanded assistance, highlighting the significant challenges these businesses are confronting. In an open letter delivered to Canadian premiers on Tuesday, the Canadian Federation of Independent Business (CFIB) and Restaurants Canada urgently pleaded for immediate intervention.
The open letter, detailing the immense pressure on small businesses, underscored the inadequacy of current aid programs. It stated that tens of thousands of firms across Canada would receive no support given the restrictions dramatically reducing their ability to serve customers and public health warnings discouraging consumers from entering businesses. The industry groups expressed frustration with the stringent eligibility criteria for existing programs, noting that a restaurant losing 35% of its revenue, or a retailer experiencing a 45% decline, would no longer qualify for assistance. This revelation compounded the existing concerns as many businesses, after seeing modest sales growth following earlier restrictions, found themselves ineligible for support – a tragic irony considering the prolonged difficulties faced.
Responding to the urgency of the situation, the federal government acknowledged the challenges. A spokesperson for Finance Minister Chrystia Freeland’s office stated that the government was actively assessing potential adjustments to support measures, particularly in light of the public health situation and evolving restrictions across provinces. The government’s focus was on Bill C-2, which aimed to provide targeted assistance. However, many provincial governments had already announced additional capacity limits for restaurants and businesses. Ontario, for instance, has limited indoor settings to 50 per cent capacity, including shops and restaurants, with bars and restaurants closing at 11 p.m. except for take-out and delivery. Quebec has shut down bars, casinos, theaters, and gyms, allowing restaurants to operate at 50 per cent capacity during limited hours, while Nova Scotia has implemented similar restrictions on dining and gym capacity. These measures, regardless of whether other provinces had taken similar steps, were causing a significant disruption to small businesses.
The industry groups emphasized the extremely limited nature of available support. Olivier Bourbeau, Vice-President of Quebec and federal affairs at Restaurants Canada, stated that Ottawa was unlikely to broaden eligibility. “We have been asking the Federal (government) to do so,” he said, referring to a return to the spring of 2021 levels for wage and rent subsidies. “But they stick to their 40 per cent.” The CFIB and Restaurants Canada had reached out to all Premiers to advocate for this change. Furthermore, they requested that the governments encourage Ottawa to include businesses facing partial restrictions in support programs and to reopen the Canada Emergency Business Account (CEBA) loan program with modified terms for easier access. Data revealed that almost two-thirds of small businesses had not returned to pre-pandemic sales levels, and a quarter predicted they could fail within six months. Existing support programs, announced last week by Deputy Prime Minister Chrystia Freeland, were deemed insufficient by many, failing to bridge the substantial gaps.
Legal counsel specializing in the restaurant industry, Chad Finkelstein of Dale & Lessmann LLP, corroborated these concerns. He noted that businesses eligible for support had already exhausted reserves built up during periods of loosened restrictions. "Any little glimmer of hope that many businesses saw at the end of this two-year tunnel is quickly being extinguished,” he said. The CFIB, led by Dan Kelly, urged provincial premiers to introduce new rounds of small business grants and to pressure Ottawa to modify existing programs. Specifically, they requested a return to 2021 levels for wage and rent subsidies, revisions to lockdown supports for businesses with partial restrictions, reopening of the CEBA loan program with larger loan amounts, a larger forgivable portion, and delayed repayment requirements, and assurances that new firms could qualify for all programs.
The urgency of the situation was further highlighted by the CFIB’s letter, underscoring the precarious financial situation of many businesses. Kelly, speaking to the Canadian Press, expressed concern that businesses had burned through their reserves. "More help is certainly needed as the current criteria for eligibility disqualify many restaurants,” he stated. The industry groups’ plea for immediate action underscored a desperate situation for Canadian small businesses, relying on government support to weather the storm presented by the ongoing Omicron wave.
