Restaurant bankruptcies soaring across Canada as pandemic loans come due
Inflation continues to take a bite out of Canadian restaurants.
Restaurants Canada, representing over 30,000 businesses coast-to-coast, says 51 per cent of restaurants are losing money.
The not-for-profit's study found the number of restaurants filing for bankruptcy has increased by 116 per cent since 2022, and they expect that number to grow if changes are not made.
“I’ve never seen numbers like this,” said Mark von Schellwitz, western Canadian vice president of Restaurants Canada.
"Eighty-three per cent of our restaurants took out CEBA loans during the pandemic, and only 20 per cent are in a position to pay those by the end of the year.”
Canada Emergency Business Account (CEBA) loans were provided, interest-free, to small businesses struggling to get by during the pandemic, but they must be paid back by Dec. 31, 2023.
Restaurants Canada urges the federal government to reconsider its deadline and extend it for 36 months to allow restaurants to recover their losses further, especially as food prices and staffing shortages continue to hamper the industry.
"The effective plan will ensure that taxpayer funds are paid back to the government owed while saving thousands of restaurants and other small businesses from being forced to declare bankruptcy in the near future," wrote Restaurants Canada in a statement.
Matthew Senecal-Junkeer owns and operates The Birds and the Beets in the heart of Vancouver's Gastown neighbourhood.
During the pandemic, the young business owner says he was provided $80,000 to help support his two Vancouver shops.
Since then, he has watched food prices soar, staff wages rise, and foot traffic decline due to nearby businesses moving to remote work.
"We're very much in that COVID hangover and still trying to recover our losses," said Senecal-Junkeer.
"We're among the many restaurants who have seen their margins tighten, which has made it harder to pay those loans by their deadline of Dec. 31."
Senecal-Junkeer is hopeful something can be done to support restaurants further, as the inflationary pressures have caused additional challenges over the years.
The federal Department of Finance wrote in an email to CTV News that it extended the repayment deadline once before and is working to support small businesses.
"In budget 2023, we announced that we have secured commitments from Visa and Mastercard to lower credit card transaction fees for small businesses while also protecting reward points for Canadian consumers," said the department.
"More than 90 per cent of credit card-accepting businesses will see their interchange fees reduced by up to 27 per cent from the existing weighted average rate."
Restaurants Canada is calling on Ottawa to decide on the extension before or on May 31, at the latest.
CTVNews.ca Top Stories
Canadian family stuck in Lebanon anxiously awaits flight options amid Israeli strikes
A Canadian man who is trapped in Lebanon with his family says they are anxiously waiting for seats on a flight out of the country, as a barrage of Israeli airstrikes continues.
Suspect in shooting of Toronto cop was out on bail
A 21-year-old man who was charged with attempted murder in the shooting of a Toronto police officer this week was out on bail at the time of the alleged offence, court documents obtained by CTV News Toronto show.
Scientists looked at images from space to see how fast Antarctica is turning green. Here's what they found
Parts of icy Antarctica are turning green with plant life at an alarming rate as the region is gripped by extreme heat events, according to new research, sparking concerns about the changing landscape on this vast continent.
DEVELOPING 2 dead after fire rips through historic building in Old Montreal
At least two people are dead and others are injured after a fire ripped through a century-old building near Montreal's City Hall, sources told Noovo Info.
Yazidi woman captured by ISIS rescued in Gaza after more than a decade in captivity
A 21-year-old Yazidi woman has been rescued from Gaza where she had been held captive by Hamas for years after being trafficked by ISIS.
A 6-year-old girl was kidnapped in Arkansas in 1995. Almost 30 years later, a suspect was identified
Nearly 30 years after a six-year-old girl disappeared in Western Arkansas, authorities have identified a suspect in her abduction through DNA evidence.
Dolphins 'smile' at each other when they play and to avoid misunderstanding, study finds
For humans, flashing a smile is an easy way to avoid misunderstanding. And, according to a new study, bottlenose dolphins may use a similar tactic while playing with each other.
Pit bulls in B.C. pet mauling tested positive for meth, cocaine, says city
Three pit bulls involved in a deadly attack on another dog last month in Kamloops, B.C., tested positive for methamphetamine and cocaine, and the city is going to court to have them put down.
Tax rebate: Canadians with low to modest incomes to receive payment on Friday
Canadians who are eligible for a GST/HST tax credit can expect their final payment of the year on Friday.