Canadian Manufacturing

COVID-19 wreaking havoc on Canada’s hospitality industry, MPs told

The industry has already shed 800,000 jobs

April 24, 2020  The Canadian Press

OTTAWA — The COVID-19 pandemic has caused carnage for restaurants and hotels in Canada, MPs on the House of Commons finance committee heard April 23.

According to a survey conducted by Restaurants Canada, 10% of restaurants across the country had already permanently closed as of the end of March, restaurant operator Andrew Oliver told the committee.

And another 18% expect to close their doors for good by the end of this month.

The casualties include 50% of independent restaurants which don’t expect to survive the health crisis, Oliver added.

Most restaurants, except those offering takeout and delivery, have been shuttered since mid-March in an effort to curb the spread of the deadly new coronavirus that causes COVID-19.

David Lefebvre, vice-president of Restaurants Canada, said the industry normally employs 1.2 million Canadians, generates $93 billion in economic activity each year and serves 22 million people every day.

The pandemic “has wreaked havoc” on the industry, which has already shed 800,000 jobs, he said.

“More than half our industry does not have any sales. Dreams are broken, retirement hopes are broken, careers are broken, lives are in shambles.”

With Canadians being advised to stay home and avoid travel as much as possible, hotels have also been hard hit.

Marc Staniloff, owner of Superior Lodging Corp., told the committee that 20% of the hotels in his company, which owns franchise rights to Super 8, Travelodge and Microtel Inn and Suites hotels across the country, are closed.

And he said occupancy in those that are open is running at just 9%.

But it’s not just businesses in the hospitality sector that are suffering.

Dan Kelly, president of the Canadian Federation of Independent Business, told the committee that 80% of small- and medium-sized businesses across Canada are closed. And 55% of those that are open report their sales have plunged by 50% or more.

The CFIB has been surveying its 30,000 members every week. Kelly said the most worrisome statistic from those surveys is that more than 50% of small businesses say they’ll go bankrupt if the current level of restrictions on non-essential businesses continues until the end of May.

“That’s how dire the situation is for many small companies as they look forward,” he said.

The federal government has plowed almost $110 billion into emergency aid for individuals and businesses. That includes a $73-billion wage subsidy program, under which qualifying companies will get a subsidy worth 75% of each employee’s wages, up to $847 per week, retroactive from March 15 to June 6.

Kelly and other witnesses at the committee warned that many businesses will need that wage subsidy beyond June as they slowly reopen and get back on their feet.

Rose Dennis, of the Tourism Industry Association of Prince Edward Island, said seasonal businesses that rely on tourists fear they won’t be able to open at all this summer if the wage subsidy is not extended until the fall.

Witnesses also called for substantial rent relief for companies and easier access to interest-free loans and deferrals on loan repayments.

The federal government has promised, in collaboration with the provinces, to provide rent relief for commercial tenants. With rent due May 1, Kelly said it’s urgent that the relief be provided quickly to cover at least 75% of a company’s rent and that it apply to all companies, without a lot of cumbersome eligibility rules.


Related: Feds to unveil rent relief for businesses forced to shut down during pandemic


“If we do that, I think we have a fighting chance of having the majority, not all, but the majority of our small business community make it across the emergency phase of this (pandemic),” he said.

The committee also heard April 23 from beef and pork producers, who said emergency federal aid targeted specifically at their industries is desperately needed. They said most cattle and hog farmers are not eligible for any of the emergency aid programs provided by the federal government so far.