'Post-pandemic hangover' forces many restaurants to file for bankruptcy: Restaurant Canada

Restaurants across Canada are "in crisis" and still fighting for survival, says Restaurants Canada, a not-for-profit representing 30,000 restaurants countrywide. 

They are said to be facing a "triple whammy" of challenges: inflationary costs, labour shortages and COVID-19 loan repayments.

"We're in this post-pandemic hangover phase," said Mark von Schellwitz, vice-president of the Western Canada division. "It's been really difficult to get back to normal."

Bankruptcy filings in food services have spiked 116 per cent since 2022, according to Restaurants Canada. It says about half of restaurants are unprofitable right now, compared to only 12 per cent before the pandemic.

Restaurants Canada says 25 per cent of members worry they won't be able to survive another year. It's lobbying the federal government to extend the repayment deadline for the Canada Emergency Business Account (CEBA) to give struggling businesses some reprieve.

In B.C., the struggling restaurant sector has spent the last few weeks pressuring the provincial government for support. The group has been quietly meeting with the labour and jobs ministers, resulting in a list of 10 recommendations to the province. 

CBC News has learned the government is currently working on additional supports — not only for the restaurant sector, but for small businesses as well. 

"We do know that a number of small businesses are feeling the impact," said B.C. Jobs Minister Brenda Bailey, referring to the inflation and labour shortages, along with COVID-related debt.

Bailey said the government will announce shortly measures to assist restaurants and small businesses.

Before the pandemic, The Birds & The Beets cafe in downtown Vancouver was a lunch hot-spot relying on daytime office workers.

Co-owner Matthew Senecal-Junkeer says the business was able to pay all of its bills and fixed costs with the busy lunchtime business.

But that's no longer the case. Many workers haven't returned to the office, which has forced the cafe to also turn into a wine bar five nights a week.

"That's really been essential for our survival," Senecal-Junkeer said. "Restrictions are lifted, life is back to normal, but people's patterns are just different post-pandemic."

According to Restaurants Canada, restaurants have also had to increase menu prices to keep up with inflationary costs, but not hike them too much to avoid pushing away customers who are also feeling the pinch.