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
DEVELOPING Man sets self on fire outside New York court where Trump trial underway
A man set himself on fire on Friday outside the New York courthouse where Donald Trump's historic hush-money trial was taking place as jury selection wrapped up, but officials said he did not appear to have been targeting Trump.
Mandisa, Grammy award-winning 'American Idol' alum, dead at 47
Soulful gospel artist Mandisa, a Grammy-winning singer who got her start as a contestant on 'American Idol' in 2006, has died, according to a statement on her verified social media. She was 47.
She set out to find a husband in a year. Then she matched with a guy on a dating app on the other side of the world
Scottish comedian Samantha Hannah was working on a comedy show about finding a husband when Toby Hunter came into her life. What happened next surprised them both.
'It could be catastrophic': Woman says natural supplement contained hidden painkiller drug
A Manitoba woman thought she found a miracle natural supplement, but said a hidden ingredient wreaked havoc on her health.
Young people 'tortured' if stolen vehicle operations fail, Montreal police tell MPs
One day after a Montreal police officer fired gunshots at a suspect in a stolen vehicle, senior officers were telling parliamentarians that organized crime groups are recruiting people as young as 15 in the city to steal cars so that they can be shipped overseas.
Vicious attack on a dog ends with charges for northern Ont. suspect
Police in Sault Ste. Marie charged a 22-year-old man with animal cruelty following an attack on a dog Thursday morning.
The Body Shop Canada explores sale as demand outpaces inventory: court filing
The Body Shop Canada is exploring a sale as it struggles to get its hands on enough inventory to keep up with "robust" sales after announcing it would file for creditor protection and close 33 stores.
Tropical fish stolen from Beachburg, Ont. restaurant found and returned
Ontario Provincial Police have landed a suspect following a fishy theft in Beachburg, Ont.
U.S. FAA launches investigation into unauthorized personnel in cockpit of Colorado Rockies flight to Toronto
The U.S.’s Federal Aviation Administration is investigating a video that appears to show unauthorized personnel in the cockpit of a charted Colorado Rockies flight to Toronto.