Business and Operations
RC: More reforms to the federal wage subsidy
July 13, 2020 ByBakers Journal
Restaurants Canada is urging reforms to the federal wage subsidy that will better help foodservice businesses rehire workers as they continue to reopen and recover from the impacts of COVID-19.
At least 400,000 people previously employed in the Canadian foodservice sector are still out of work, according to the results of the latest Labour Force Survey from Statistics Canada. This is still half of the jobs that the sector has lost since the start of the pandemic and a third of the foodservice industry’s workforce still not recovered.
“Reforms to the federal wage subsidy are urgently needed to help foodservice businesses bring more Canadians back to work amid ongoing restrictions,” said David Lefebvre, Restaurants Canada Vice President, Federal and Quebec in a press release. “Forty-four per cent of restaurant operators who responded to our latest survey said they did not apply for the subsidy for at least one of their establishments because it would not meet the requirements.”
Restaurants need reforms to the wage subsidy to rehire more Canadians
Restaurants and other foodservice businesses are the fourth-largest source of private sector jobs in Canada. Collectively, the industry employs about 1.2 million people. At least this was the case before COVID-19 resulted in more than 800,000 people from the foodservice and hospitality sector out of work by April.
Not only was the foodservice industry among the first and hardest hit by the impacts of COVID-19, the sector will also be among the slowest to return to profitability. Given this reality, Restaurants Canada is continuing to recommend the following changes to the Canada Emergency Wage Subsidy (CEWS) program to ensure foodservice businesses can bring more Canadians back to work as they continue to reopen and recover:
- Continue to keep the subsidy available for as long as restrictions are in place. Instead of the 75 per cent wage subsidy suddenly dropping to zero, support should be reduced gradually as businesses get closer to manageable levels of revenue variance while operating under ongoing restrictions.
- The 30 per cent revenue decline threshold should be scaled to support restaurants in their recovery, instead of serving as a disincentive to improving sales at the risk of losing access to the subsidy while businesses are still operating at a loss.
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