Posted Tuesday March 24, 2020

Small Business

Restaurants Canada need evictions off the table

Restaurants Canada is calling for a ban on evictions and property seizures until solutions are developed to ease rent obligations for businesses impacted by COVID-19.

Restaurants Canada is calling on all provincial governments to take evictions and property seizures off the table until solutions are developed to help businesses impacted by COVID-19 meet rent obligations.

For most foodservice operators, the single biggest fixed cost is rent. With the majority of establishments across the country temporarily shut down or restricted to takeout and delivery, many will struggle to have the cash flow necessary to meet fast-approaching rent deadlines. Once the COVID-19 crisis is over, re-opening their doors will also be difficult without solutions in place to keep them from owing many months of missed rent at once.

“Most restaurants are small-to-medium sized businesses operating on razor thin margins in the best of times. With little-to-no sales revenue coming in anymore, many have already depleted their reserve funds, or soon will, and won’t be able to keep paying rent and other bills,” said Shanna Munro, Restaurants Canada President and CEO. “We need governments to give them immediate assurances that they won’t face eviction notices while everyone comes to the table to figure out solutions. Arrangements are needed that will not only help foodservice operators survive the crisis we’re currently facing, but be able to re-open for business once we all get through this together.”

Takeout and delivery sales won’t cover expenses for most restaurants

Before the introduction of COVID-19 prevention measures, on-premise dining was the main source of restaurant sales revenue nationwide. For table-service restaurants, dine-in sales typically represented 80 per cent of their total revenue. For restaurants still operating amid the COVID-19 crisis, losses from dine-in sales will be tough, if not impossible, to replace. This will leave them with a very limited amount of working capital to resume full operations once the crisis is over.

Restaurants need evictions off the table until solutions are in place

An injunction on evictions would allow time for governments to bring stakeholders to the table to develop immediate and long-term solutions that will work for all parties involved.

Further relief still needed in a number of key areas

Restaurants Canada is continuing to recommend strengthening support in the following areas, including rent relief, so that restaurants can survive the unprecedented challenges they’re facing:

• Loans and mortgages: Further coordination with the banking sector is needed to make more flexible arrangements readily available, including payment-free periods.

• Rent: Flexible arrangements are needed from landlords to allow for payment-free periods. Foodservice operators are looking for a coordinated effort led by government, coupled with no-eviction orders to relieve pressure.

• Taxes: More flexibility as well as a certain level of relief on sales tax payments are needed, as deferrals may contribute to long-term challenges. Flexibility and relief are also critically needed on property taxes at the municipal level.

• Labour: Increased assistance is needed from government to avoid laying off staff during periods of little-to-no revenue. More information and support is also needed to help staff who are temporarily out of work access benefits.

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