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.
Restaurants Canada vice-president, shown at at Au Petit Extra in Montreal, said He the government should have support designed especially for the hard-hit food service sector. (Submitted by Restaurants Canada)
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.
Chris Rempen, left, and his wife Nunu founded Nunu Ethiopian restaurant in Toronto during the 2008 recession. The pandemic has nearly put them under. They believe a government-sponsored discount could help them, but worry about the timing and a second wave of COVID-19. (James Dunne/CBC)
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.
Nicole Gomes, left, and her sister Francine own Calgary’s Cluck N Cleaver restaurants. Francine believes a government-backed discount program to help bring in customers would help restaurants, but only for a short spell. (Daniela Ciuffa)
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.
An analysis of the Eat Out to Help Out program by Toby Phillips, a policy researcher at Oxford University, suggests it didn’t have lasting impact on business. It did, however, overlap with a rise in COVID-19 cases in the U.K. (Submitted by Oxford University)
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.
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.
For more stories about the experiences of Black Canadians — from anti-Black racism to success stories within the Black community — check out Being Black in Canada, a CBC project Black Canadians can be proud of.
TOKYO (AP) — Japanese technology group SoftBank swung back to profitability in the July-September quarter, boosted by positive results in its Vision Fund investments.
Tokyo-based SoftBank Group Corp. reported Tuesday a fiscal second quarter profit of nearly 1.18 trillion yen ($7.7 billion), compared with a 931 billion yen loss in the year-earlier period.
Quarterly sales edged up about 6% to nearly 1.77 trillion yen ($11.5 billion).
SoftBank credited income from royalties and licensing related to its holdings in Arm, a computer chip-designing company, whose business spans smartphones, data centers, networking equipment, automotive, consumer electronic devices, and AI applications.
The results were also helped by the absence of losses related to SoftBank’s investment in office-space sharing venture WeWork, which hit the previous fiscal year.
WeWork, which filed for Chapter 11 bankruptcy protection in 2023, emerged from Chapter 11 in June.
SoftBank has benefitted in recent months from rising share prices in some investment, such as U.S.-based e-commerce company Coupang, Chinese mobility provider DiDi Global and Bytedance, the Chinese developer of TikTok.
SoftBank’s financial results tend to swing wildly, partly because of its sprawling investment portfolio that includes search engine Yahoo, Chinese retailer Alibaba, and artificial intelligence company Nvidia.
SoftBank makes investments in a variety of companies that it groups together in a series of Vision Funds.
The company’s founder, Masayoshi Son, is a pioneer in technology investment in Japan. SoftBank Group does not give earnings forecasts.
Shopify Inc. executives brushed off concerns that incoming U.S. President Donald Trump will be a major detriment to many of the company’s merchants.
“There’s nothing in what we’ve heard from Trump, nor would there have been anything from (Democratic candidate) Kamala (Harris), which we think impacts the overall state of new business formation and entrepreneurship,” Shopify’s chief financial officer Jeff Hoffmeister told analysts on a call Tuesday.
“We still feel really good about all the merchants out there, all the entrepreneurs that want to start new businesses and that’s obviously not going to change with the administration.”
Hoffmeister’s comments come a week after Trump, a Republican businessman, trounced Harris in an election that will soon return him to the Oval Office.
On the campaign trail, he threatened to impose tariffs of 60 per cent on imports from China and roughly 10 per cent to 20 per cent on goods from all other countries.
If the president-elect makes good on the promise, many worry the cost of operating will soar for companies, including customers of Shopify, which sells e-commerce software to small businesses but also brands as big as Kylie Cosmetics and Victoria’s Secret.
These merchants may feel they have no choice but to pass on the increases to customers, perhaps sparking more inflation.
If Trump’s tariffs do come to fruition, Shopify’s president Harley Finkelstein pointed out China is “not a huge area” for Shopify.
However, “we can’t anticipate what every presidential administration is going to do,” he cautioned.
He likened the uncertainty facing the business community to the COVID-19 pandemic where Shopify had to help companies migrate online.
“Our job is no matter what comes the way of our merchants, we provide them with tools and service and support for them to navigate it really well,” he said.
Finkelstein was questioned about the forthcoming U.S. leadership change on a call meant to delve into Shopify’s latest earnings, which sent shares soaring 27 per cent to $158.63 shortly after Tuesday’s market open.
The Ottawa-based company, which keeps its books in U.S. dollars, reported US$828 million in net income for its third quarter, up from US$718 million in the same quarter last year, as its revenue rose 26 per cent.
Revenue for the period ended Sept. 30 totalled US$2.16 billion, up from US$1.71 billion a year earlier.
Subscription solutions revenue reached US$610 million, up from US$486 million in the same quarter last year.
Merchant solutions revenue amounted to US$1.55 billion, up from US$1.23 billion.
Shopify’s net income excluding the impact of equity investments totalled US$344 million for the quarter, up from US$173 million in the same quarter last year.
Daniel Chan, a TD Cowen analyst, said the results show Shopify has a leadership position in the e-commerce world and “a continued ability to gain market share.”
In its outlook for its fourth quarter of 2024, the company said it expects revenue to grow at a mid-to-high-twenties percentage rate on a year-over-year basis.
“Q4 guidance suggests Shopify will finish the year strong, with better-than-expected revenue growth and operating margin,” Chan pointed out in a note to investors.
This report by The Canadian Press was first published Nov. 12, 2024.
TORONTO – RioCan Real Estate Investment Trust says it has cut almost 10 per cent of its staff as it deals with a slowdown in the condo market and overall pushes for greater efficiency.
The company says the cuts, which amount to around 60 employees based on its last annual filing, will mean about $9 million in restructuring charges and should translate to about $8 million in annualized cash savings.
The job cuts come as RioCan and others scale back condo development plans as the market softens, but chief executive Jonathan Gitlin says the reductions were from a companywide efficiency effort.
RioCan says it doesn’t plan to start any new construction of mixed-use properties this year and well into 2025 as it adjusts to the shifting market demand.
The company reported a net income of $96.9 million in the third quarter, up from a loss of $73.5 million last year, as it saw a $159 million boost from a favourable change in the fair value of investment properties.
RioCan reported what it says is a record-breaking 97.8 per cent occupancy rate in the quarter including retail committed occupancy of 98.6 per cent.
This report by The Canadian Press was first published Nov. 12, 2024.
