One in 10 restaurants are now closed forever — and many say the industry will never be the same

The beginning of the year is always quiet in the restaurant industry. After the rush of the holidays, things slow down and money is tight. In 2020 it was no different.

Then came COVID-19.

Restaurants implemented social distancing protocols, then shut down altogether, one by one, under provincial mandate.

Some pivoted to takeout, buoyed by the government's incoming 75 per cent wage subsidy, but barely making rent.

Long-time workers in the industry say when this is all over, the food service industry will have drastically changed in ways both good and bad. Many restaurants, especially small ones owned by chefs or families, will have closed, impacting their suppliers as well. But workers hope some of the vulnerabilities of their industry will be remedied.

According to new survey statistics from Restaurants Canada, around 800,000 jobs in the food service industry have been lost so far, out of 1.2 million.

This is expected to get worse, said vice-president David Lefebvre. The survey found that 10 per cent of restaurants in Canada have permanently closed because of the pandemic. This number could more than double, Lefebvre said.

And while he said the new 75 per cent wage subsidy will help some businesses stay open, offering delivery or takeout, there's "no way" the subsidy will offset these losses.

Zhara Mian, executive chef at Purpose Snack Bar, like many workers in the food industry, has multiple gigs - she owns and runs a business and does contract work, and was working on opening her own place in April. All of that is now on hold.

"A lot of people are going to be suffering," she said, explaining that she's watching her peers, people who gave their all to do what they love in an industry with slim margins, lose it all.

Rod Castro, who owns two businesses in Ottawa including the long-standing 10Fourteen, said larger companies, such as chain restaurants, are much more likely to survive while small restaurants like his may close from the loss of income, creating a "massive shift" in the industry.

"What happens if people like me don't make it?" he said, adding that it's not just restaurants but their suppliers, often small businesses as well, that are suffering.

Small businesses, such as family restaurants or chef-owned passion projects, are disproportionately affected by the pandemic, Lefebvre said. These businesses usually don't have a franchise to back them up, or a large landlord that can afford to cut them a break.

"This is where the blood on the street is," Lefebvre said, adding that it will take a long time for that portion of the market - the "variety and diversity" - to return.

A 'passion game'

Many in the food service industry say it's not for the faint of heart, nor for those who want to make money.

Mian knows this better than most. She has wanted to work in the industry since she was a teenager, but she has a heart condition that made her cautious of the often stressful kitchen environment. After trying to work a desk job, she "threw caution to the wind" and learned to work around her condition.

"It's a passion game," she said, adding that many chefs choose work over sleep, money or a regular schedule.

Kyle Burch, who works in the Toronto restaurant industry as a server and manager, couldn't agree more. Despite the physical and mental stress of the job, he can't see himself anywhere else.

"I love how chaotic it can be. I thrive in that environment," said Burch, who was planning on opening a bar in the near future.

But Burch said the COVID-19 pandemic has exposed the vulnerabilities of the food service industry, such as workers' reliance on tips and the lack of support for employees who fall ill. Despite the losses caused by the pandemic, he hopes the industry will evolve for the better because of it.

He's already seeing industry leaders talking about what the "new normal" will look like, especially when it comes to the industry's culture and how it treats its workers.

"I think it's definitely gonna evolve," he said. "I've seen so many changes in my industry in the last five years, that there's no way that I don't think that this will ultimately have a positive impact."

'A major hole in the system'

The food service industry represents four per cent of Canada's GDP, and is the number one employer for people aged 15 to 24, Lefebvre said. The food service industry serves 22 million customers in Canada every day.

"Restaurants are part of every community in every corner of the country," he said.

As thousands of food service workers applied for employment insurance in March, many were exposed to one of the vulnerabilities Burch speaks of: the difference between their hourly wages and their tips.

Controlled tips, paid out through the restaurant on the paycheque, are EI insurable. So are a portion of tips in Quebec. But the most common way for tips to be paid out is directly to the server. And direct tips are not EI insurable. That means many food service workers will receive very little money through EI.

Emily Quaile, a bartender and server for Ottawa restaurant Union Local 613, sees this as a "major hole in the system."

She said she wants more government oversight of tip income, similar to what is done in Quebec.

Ivan Gedz, the co-owner of Union Local 613 who is well-known for speaking out publicly about food service workers' rights, thinks this is only possible from the top down.

"If the government did eventually crack down on (controlling) tips, that change would happen industry wide," he said.

Lack of sick days and the shame around calling in sick is another pervasive problem in the industry, Burch said. There's a "machismo" around coming to work despite injury or illness, he said - and of course, if you don't show up to a shift, you don't get paid.

Toronto pastry chef Heather Mordue sees this as a major vulnerability, too.

"There's always been this mentality in the culinary industry that if you're sick, you just have to suck it up and come to work," she said. "I think after (the pandemic), that's gonna have to change."

'Breathing room'

In the meantime, restaurant workers and owners are asking for bailouts from the government to prevent further business closures.

The restaurant industry already operates on such slim margins that a few weeks of closure can mean a permanent shutdown, Burch said.

That's why Restaurants Canada is asking for more capital for the industry: loans, subsidies, anything, Lefebvre said.

"Anything that gives breathing room in terms of cash flow," he said, adding that the $40,000 government-backed loan for small businesses is a "first step in the right direction."

Castro is also concerned that small businesses and landlords aren't getting enough of a break. Instead, he sees a mountain of deferrals and debt that will benefit banks while just keeping businesses open for a little while longer.

He will be applying for the $40,000 loan for small businesses, interest-free until 2022, but said most of the money will go to other small businesses, such as the suppliers he owes.

The biggest challenge going forward will be rent and mortgages, and he wants more than a deferral.

"There's gonna have to be some level of conversation about forgiveness," Castro said.

'It comes down to respect'

Mian said the $2,000-a-month emergency response benefit is barely enough, at least in Toronto - but EI is even less. She, too, is hoping for rent and mortgage relief.

In the future, she hopes more attention will be paid to the wellness of food service workers, in the form of health benefits and sick days.

"I think it comes down to respect," she said. "We just wanna know that we're valued."

Meanwhile, Burch sees a potential silver lining coming out of the pandemic - more caution when it comes to opening restaurants.

In the past couple of years, he thinks it's become too easy to open a restaurant. As long as you have a good reputation, there are investors willing to provide the financial help to do so, he said, jumping on trends and crowding the market, at least in Toronto.

He thinks those once-eager investors will now be wary.

"The precariousness of restaurants has really been brought to the forefront, and people are going to be much less willing " to invest."

He hopes this means more restaurants will stay open for longer, becoming established instead of being replaced with what's hot and new.

When the pandemic ends, he still plans to open his own bar.

"This industry is beautiful, and it will survive in some way, shape or form," he said. "Though I have no idea what shape that's going to take."

Rosa Saba is a Calgary-based reporter for the Star. Follow her on Twitter: @rosajsaba