Want the government to split your dinner tab? Restaurants pitch relief plan to help them survive
Idea is based on a British program that had some success but was not without its critics
With support from a swath of pandemic relief measures set to expire this fall, a national restaurant association wants the government to consider a new way to support its struggling industry.
Restaurants Canada, which represents 30,000 of the 97,000 restaurants, bars and caterers across the country, has asked the prime minister to look at subsidizing customer meals as a direct form of economic stimulus.
"Our sector has been hit harder than other sectors. So it's probably time to do something that will be just for us," said David Lefebvre, the group's vice-president.
Restaurants Canada is floating the idea ahead of the upcoming throne speech, hoping Ottawa will use the pandemic purse to ratchet up dine-in revenues as patio season comes to an end. The concept came from a program called Eat Out to Help Out, which ran in the U.K. last month.
In August, the U.K. government offered a 50 per cent discount on meals for up to $17 Cdn (£10) per diner from Monday to Wednesday. Rishi Sunak, young, charismatic finance minister, was himself the poster boy for the program, even posing as a waiter for its launch.
Brits gobbled it up, ordering more than 100 million meals. Restaurants applied the discount to their bills on the spot, submitting receipts to the government for reimbursement. Nearly 85,000 restaurants participated.
"We feel it is something that will definitely give a boost and incentivize more restaurants to stay open," Lefebvre said.
But there are questions about whether the idea would pay off here — and whether it's safe.
Costs and benefits
Across the pond, the program is being celebrated by the government and many in the restaurant industry, with one chain even claiming a 130 per cent spike in sales.
The British government says it helped protect 1.8 million jobs and kick-start a stalling sector. It cited a searchable database from reservation site OpenTable that says Monday to Wednesday reservations were up 53 per cent in August 2020 compared to 2019.
The cost of Eat Out to Help Out is still being calculated. Numbers released a few days before the program ended showed the government had already spent more than £520 million, or more than $890 million Cdn.
Lefebvre hopes some kind of government-funded discount could help failing restaurants over a few months — particularly January and February, which are traditionally slow as diners pay off holiday expenses.
Restaurants Canada estimates its industry lost 800,000 jobs when the pandemic struck. While many have returned, employment in food services is still down 20 per cent, or 260,000 jobs according to Statistics Canada.
The association also estimates 10 per cent of restaurants have already closed permanently, and without help, another 10 per cent will be gone by November. By next March, it says up to 40 per cent could close.
Restaurant owners say a discount deal could be good for business. A group of Ontario owners is even starting their own version of the concept in October.
Nunu Rampen, the owner and chef of Nunu Ethiopian restaurant in Toronto, says a government-sponsored discount could make a big difference.
"Absolutely, I really like it. It's a really, really nice idea," said Rampen.
She and her husband Chris opened Nunu during the 2008 recession. Now, after 12 years of hard work, they say the pandemic has nearly put them out of business. They're only serving customers on their city-licensed patio because of safety concerns.
They wonder what would be the right timing for a discount program.
"If you're about to jump back into a lockdown situation, that's money that's not being used wisely," Chris Rampen said.
In Calgary, Francine Gomes feels her restaurants have weathered the pandemic better than some others because of their take-out service.
"These small businesses have operating expenses that are that they have to pay regardless of the customer sitting in the seat or not," said Gomes, who owns a pair of chicken restaurants called Cluck N Cleaver with her sister Nicole. "So they definitely need some direct relief."
Even so, her hunch is it would only provide a "quick boost" in revenue because of physical distancing and many diners' fears of eating out.
Fears of virus spread
An analysis by a policy expert from Oxford University took a hard look at the Eat Out to Help Out program bears out that theory.
Findings published by Toby Phillips suggest the program created a sales spike but didn't have a lasting impact on business.
Based on sales trends from July, Phillips believes the U.K.'s hospitality industry was on track for a comeback on its own, and that sales are now right where they would have been anyway.
And he has a bigger concern. "At the same time as the scheme was operating, the U.K. started to see an uptick in COVID-19 cases," Phillips wrote in a piece for The Conversation.
He said it may not be possible to determine whether the program caused the spike in infections, but that a popular discount and encouraging outings on specific days of the week are potential problems.
"Any scheme that encourages a 'back to normal' mindset is risky, because it will make it harder in the future to deal with rolling outbreaks," Phillips said in an email to CBC News.
He suggests a safer option would be a promotion on take-out meals, an idea Restaurants Canada also supports.
Critics of plan
In the U.K., some restaurants called the program tokenistic and others pulled out of it because of "hostility towards staff."
Still, it was so popular there's a demand for it to be repeated, and some companies are continuing the promotion on their own.
Here, a new coalition of hospitality businesses led by the Canadian Chamber of Commerce is pushing the government to encourage Canadians to go back to going out.
Lefebvre recognizes the government only has a limited budget, but adds but many restaurants remain desperate. "They need something to happen."
Both groups say there's a need for a new rent relief program and for wage subsidies to be extended into the new year.
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