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
BREAKING Police investigating shooting outside of Drake's Bridle Path mansion: source
Toronto police are investigating a shooting that took place outside of Drake’s Bridle Path mansion early Tuesday morning, a source tells CP24.
Canadian cadets rock mullets and place second at U.S. military competition
Sporting mullets, Canadian Armed Forces officer cadets placed second in an annual military skills competition in the U.S.
'It looked so legit': Ontario man pays $7,700 for luxury villa found on Booking.com, but the listing was fake
An Ontario man says he paid more than $7,700 for a luxury villa he found on a popular travel website -- but the listing was fake.
Your body needs these three forms of movement every week
Movement is movement, right? Not exactly. Here’s what your body is looking for in addition to your morning walk or yoga session, according to experts.
The Met Gala was in full bloom with Zendaya, Jennifer Lopez, Mindy Kaling among the standout stars
The Met Gala and its fashionista A-listers on Monday included Jennifer Lopez, Zendaya and a parade of others in a swirl of flora and fauna looks on a green-tinged carpet lined by live foliage.
Quebec to limit sperm donations per donor after 3 men from same family father hundreds of children
Quebec is looking at tightening the regulations around sperm donation in the province following the release of a documentary that revealed three men from the same family fathered hundreds of children.
There's actually no such thing as vegetables. Here's why you should eat them anyway
The rumours are true: Vegetables aren't real — that is, in botany, anyway. While the term fruit is recognized botanically as anything that contains a seed or seeds, vegetable is actually a broad umbrella term.
Noelia Voigt resigns as Miss USA, citing her mental health
Noelia Voigt, who was crowned Miss USA in November 2023, has announced she is resigning from her role, saying the decision is in the best interest of her mental health.
Highlights from the 2024 Met Gala exhibit: Sleeping Beauty would wake up for these gowns
Sure, she was a royal princess and all. But there’s no way Sleeping Beauty — either before or after her nap — ever had quite the fabulous wardrobe that’s been assembled at the Metropolitan Museum of Art.