Restaurants call for help as Omicron threatens to wreak havoc

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Ottawa “actively evaluating” whether further action is needed in light of variant, says Freeland office

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Small businesses and restaurants in Canada are calling for more government support as new restrictions now imposed to tackle the Omicron variant of COVID-19 severely restrict their business and new “insanely limited” aid programs fail.

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In an open letter to Canadian prime ministers on Tuesday, the Canadian Federation of Independent Business and Restaurants Canada called for immediate help.

“To put it bluntly, tens of thousands of small businesses across Canada will receive no government support, while government restrictions will dramatically reduce their ability to serve customers and public health warnings scare many consumers for let them stay at home, ”the groups said.

In a statement Tuesday evening, a spokesperson for Finance Minister Chrystia Freeland’s office said the federal government was considering possible changes to support measures because of Omicron.

“In light of the public health situation and the new restrictions in a number of provinces, we are actively assessing whether regulatory adjustments are needed to provide additional flexibility to the support measures contained in Bill C-2” , indicates the press release.

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Most provinces have now announced new capacity limits for restaurants and businesses; even in those who haven’t, nervous consumers are canceling reservations and returning to shop online, the letter said.

Ontario has limited indoor facilities to 50% of its capacity, including stores and restaurants. Bars and restaurants must close at 11 p.m., with the exception of the take-out and delivery service. Quebec has closed bars, casinos, theaters and gymnasiums. Restaurants can serve at 50% capacity for limited hours . Nova Scotia added similar capacity restrictions on restaurants and gyms on Tuesday.

Olivier Bourbeau, vice-president of Quebec and federal affairs at Restaurants Canada, said before the federal government’s statement was released that he did not believe Ottawa would facilitate eligibility for the aid.

“We have asked the federal (government) to do it,” he said, including seeking to lower the threshold to the 10 percent that was in place for previous wage and rental subsidies.

“But they’re sticking to their 40 percent,” Bourbeau said.

“The CFIB and Restaurants Canada have also contacted all the Premiers to support us in this request,” he added.

He said the organization is also calling for a lockdown support program to apply not only when businesses are completely shut down, but with current capacity limits in place in many provinces, including British Columbia, the Manitoba and Ontario.

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Even before the Omicron outbreak, sales of nearly two-thirds of small businesses had not returned to normal, according to the CFIB. A quarter of them said their business could fail within the next six months.

Government support programs, including those announced last week by Deputy Prime Minister Chrystia Freeland, are limited to those hardest hit and are not filling all the gaps, according to industry groups and those working closely collaboration with the hotel industry.

Aid from Ottawa is now “incredibly limited,” CFIB said, noting that data – even before Omicron – showed 80% of small businesses that need help are no longer eligible for aid.

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Under Ottawa’s new programs, a restaurant that lost 35% of its revenue and a retailer that lost 45% will no longer receive support, according to the open letter.

Federal “lockdown” support is only available for businesses that have been almost completely shut down. If the business had to restrict its activities to 50 percent, it is not eligible.

“More help is certainly needed, as the current eligibility criteria disqualify many restaurants,” said Chad Finkelstein, a lawyer whose practice at Dale & Lessmann LLP in Toronto is heavily focused on the restaurant industry.

“When the restrictions were lifted earlier, many restaurants experienced a few months of sales growth which, in a sad and ironic twist, disqualified them as a result of most support programs,” he said.

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Dan Kelly, chief of the CFIB, told The Canadian Press that companies likely ran out of reserves or buffers accumulated during times when restrictions were relaxed.

“Any little glimmer of hope that many companies saw at the end of this two-year tunnel quickly died out,” he told The Canadian Press.

CFIB letter calls on premiers to introduce a new round of provincial small business grants. They also called on the provinces to urge Ottawa to:

  • Return wage and rental subsidies to spring 2021 levels
  • Revise additional locking brackets so businesses with partial restrictions are included
  • Reopen the Canada Emergency Account for Business (CEBA) loan program with a larger loan, larger repayable portion, and deferred repayment requirements
  • Ensure that new businesses can qualify for all programs

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