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
Minister 'outraged' after AFN national chief's headdress taken from Air Canada cabin
The federal minister of Crown-Indigenous relations is calling on Air Canada to 'make things right' with the national chief of the Assembly of First Nations, who said her headdress was removed from an airplane cabin during a flight this week.
Sophie Gregoire Trudeau on navigating post-political life, co-parenting and freedom
Sophie Gregoire Trudeau says there is 'still so much love' between her and Prime Minister Justin Trudeau, as they navigate their post-separation relationship co-parenting their three children.
'Violation': CSIS had officer investigated after she reported a superior raped her
A CSIS officer's allegations that she was raped repeatedly by a superior in agency vehicles set off a harassment inquiry, but also triggered an investigation into her that concluded the alleged attacks were a “misuse” of agency vehicles by the woman.
'Too young to have breast cancer': Rates among young Canadian women rising
Breast cancer rates are rising in Canada among women in their 20s, 30s and 40s, according to research by the University of Ottawa (uOttawa).
'I was scared': Ontario man's car repossessed after missing two repair loan payments
An Ontario man who took out a loan to pay for auto repairs said his car was repossessed after he missed two payments.
Canada recognizes housing as a human right. Few provinces have followed suit
As more Canadians find themselves struggling to afford or find housing, the country's smallest province is the only one that can point to legislation recognizing housing as a human right.
Charlie Woods, son of Tiger, shoots 81 in U.S. Open qualifier
Charlie Woods failed to advance in a U.S. Open local qualifying event Thursday, shooting a 9-over 81 at Legacy Golf & Tennis Club.
Taylor Swift dons Montreal designer's dress in 'Fortnight' video
A pair of Montreal designers' work has now been viewed over 41 million times. Taylor Swift dons a Victorian throwback black gown in her latest music video, 'Fortnight', designed by UNTTLD due Simon Belanger and Jose Manuel Saint-Jacques.
What to know about avian influenza in dairy cows and the risk to humans
Why is H5N1, or bird flu, a concern, how does it spread, and is there a vaccine? Here are the answers to some frequently asked questions about avian influenza.