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Why reopening the economy is just the start of even more headaches for already struggling businesses – Financial Post

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Saskatchewan was the first to pull the trigger on lifting the pandemic-induced economic shutdown, a move a week ago that brought equal degrees of hope and anxiety to individuals and businesses both within the province and around the country.

Its reopening is gradual, starting with medical services such as dentists being allowed to see patients, then golf courses will open, followed by provincial parks in June. Quebec followed suit, in much bolder fashion despite having the highest death toll in the country and a stubbornly high rate of new COVID-19 cases.

Quebec Premier Francois Legault spent much of Thursday defending his decision to reopen the province’s economy in phases starting May 4, fielding tough questions about the risks of reopening daycares, elementary schools, factories and retail stores amidst a curve that had barely flattened.

“Nothing is perfect, nothing in life is 100 per cent, but we calculate, with the help of public health, that it’s better for children to return to school,” he said.

The open protests to reopen fully continue nevertheless, with protestors ignoring social distancing protocols, even though many experts believe that until a COVID-19 vaccine is found and widely distributed — a process that might take 18 months or more — normalcy will not resume even if governments throw their economies wide open.

Until then, there will be a tug of war between the public’s health and the long-term damage to the economy of staying partly closed, with tricky questions surrounding when and how to open, and who is allowed outside and in what circumstances, without increasing the risk of over-running public health facilities with a surge of COVID-19 cases.

But it doesn’t get any easier for business owners once those decisions have been made since they are the ones who will have to figure out how to bring their employees back without jeopardizing their health and safety. That process will include redesigning workplaces, interacting with customers in different ways, increasing sanitation efforts and perhaps even paying people in different ways, all of which come with myriad headaches and extra costs at a time when many businesses are already on life-support benefits.


Hand sanitizer at a recently reopened restaurant in Alabama.

Maranie Staab/Bloomberg

For example, retailers and restaurants, for the sake of their own survival, will have to somehow entice people to come out to shop and eat, despite the ever-present risk of contracting the virus. There are or will be provincial and maybe municipal guidelines to follow, but no amount of cleaning or spacing people out will convince everyone that it’s safe.

“To the degree that we have to weigh up moral, economic and health concerns … that is something we all have to collectively do. There are no single set of experts here,” said Steven Pearlstein, Robinson Professor of Public Affairs at George Mason University in Virginia.

“Governments will put out guidelines on reopening, saying here’s what you can do, here’s what you can’t do. That does not necessarily mean every company or consumer or business will follow. We all get to decide as consumers and workers and company executives how much and when and how we are going to do things. And we’ll only know if we struck the right balance in hindsight.”

Even in jurisdictions where government guidelines on reopening remain vague, major companies have started brainstorming new ways of working that incorporate physical distancing into their floor plans.

Darryl Wright, a human resources consultant at Ernst & Young LLP, said he has started seeing a number of companies bring in experts to redesign offices and configure them according to the requirements of landlords mandating physical distancing in indoor spaces.

“Some of the things that are being considered are one-way passages in office spaces so people don’t brush past each other, the number of people that should be allowed in a boardroom or how many people should even be in an office space at a given time,” Wright said. “We are basically trying to agree on what a base model of working might look like when we are allowed to reopen.”

That’s at least partly because employees will be “emboldened to push back on returning to work” until they feel it is safe to do so, according to a recent survey conducted by international architectural and design company Ware Malcomb.

It suggests companies take the temperature of individual employees or use fever scanning systems and introduce staggered work times and four-day work weeks, tactics that have already been adopted at some large banks in Hong Kong, a city-state that from the get-go employed effective methods of contract tracing and isolation to curb community spread of the virus.

For example, employees at the Hong Kong headquarters of French banking giant BNP Paribas can not enter the building without a mask. Everybody’s temperature is checked when walking into an office building or restaurant on the island.

Office workers in Hong Kong.

Office workers in Hong Kong.

Anthony Allace/AFP via Getty Images

Cynthia Milota, Ware Malcomb’s director of workplace strategy, suggests that office lunch and break times be scheduled or lengthened to “minimize occupant loads,” similar to how large high schools stagger their lunch periods.

The company has also produced modified workplace floor plans that vastly reduce the number of people in a given space or on a specific floor.

“Remove chairs or even monitors to discourage unoccupied workstation use,” Milota said. “Seating should remain assigned until the widespread threat of virus transmission has diminished.”

Some companies may figure that they need less space if their employees are going to stay at home for the long term, but Lowest Rates Inc., which runs a website that helps people find low insurance and mortgage rates and employs about 50 people, is accelerating a planned move to a larger physical office space.

“We’re going to have to move offices, because we’re taking this very seriously,” chief executive Justin Thouin said. “We never want to put the team in a position where they feel unsafe and uncomfortable, so we will be actively looking to move into a larger office where desks are wider apart and ventilation is better.”

He said his company has had a remarkably positive experience throughout the pandemic, which has enabled the company to afford a larger office space. Business is improving and he is looking to hire even more staff.

“We are actually using this opportunity to pick up talent that has been let go by other organizations,” Thouin said.

In a photo taken on April 9, 2020 employees at their desks beside empty spaces as part of protective measures against the spread of COVID-19 in Seoul, South Korea.

In a photo taken on April 9, 2020 employees at their desks beside empty spaces as part of protective measures against the spread of COVID-19 in Seoul, South Korea.

Ed Jones/AFP via Getty Images files

Even if governments and companies allow workers to return to their desks, working remotely might become the new normal, said Kareen Emery, director of innovation and consulting at The Foundry by Monster, an employer branding agency.

“I can’t name specific clients, but there are companies that are now saying as long as employees are productive, and work at the same efficiency level, they are going to keep them at home,” she said. “The thing is, even if you practice physical distancing at work, employees have to take public transit to commute in, and that’s going to be a problem. It’s a benefit to employees and to companies to continue keeping them at home.”

One such example is OpenText Corp., the Waterloo, Ont.-based software developer giant. In a recent earnings call, chief executive Mark Barrenechea said that half of the company’s headquarters will not open up even when allowed, implying that a greater number of employees will now work from home permanently.

“More than 95 per cent of OpenText employees have moved to remote work and have maintained productivity throughout,” he said.

EY’s Wright believes that companies in the post-virus, pre-vaccine world will oscillate between letting white-collar workers continue to work remotely and encouraging them to come back to reconstituted, open-plan workspaces with built-in physical distancing.

We cannot risk another outbreak that shuts us down all over again

Kevin Dove, KPMG Canada

“Remote working isn’t for everyone,” he said. “I know that some people want to come back to the office, but they need to be given the reassurance that it is safe to come back.”

Canadian Imperial Bank of Commerce’s back-to-work strategy will include alternate work-from-home days, though final plans for the two-thirds of its employees currently working remotely have yet to be fully confirmed.

“Our pace will be measured as appropriate,” a CIBC spokesperson said.

At KPMG Canada, allowing employees to return to their regular workplaces will to some extent hinge on the health-care system ramping up testing and instituting proper contact tracing, methods that Canada has largely lagged on, especially compared to some East Asian countries such as Singapore and South Korea.

“We have engaged with our KPMG partners in Asia and Europe who are sharing their experiences on returning post-COVID-19 … we cannot risk another outbreak that shuts us down all over again,” spokesperson Kevin Dove said.

Of course, working from home isn’t an option for many blue-collar workers and those who directly interact with customers, so redesigning workplaces, if possible, is only the start of their employers’ headaches.

A customer receives a hair treatment at a salon in Tokyo, Japan.

A customer receives a hair treatment at a salon in Tokyo, Japan.

Kim Kyung-Hoon/Reuters

“The financial struggle is going to be real,” said Leesa Berry, owner of Klute Hair Salon in Toronto. “We are not going to take in as many clients every day, because the space is too small. We are going to have to purchase a lot of disposable things. For instance, capes would have to be thrown out after each client uses it. We need tons of disposable masks, because we have to provide them to clients.”

Berry hasn’t had any revenue since her salon closed down in mid-March, and is operating on savings and a federal loan for small businesses, so she will not be able to renovate her salon to space out workstations.

“Our workstations will have to be six feet apart from each other, so we can’t use all of them obviously, and only one of our shampoo stations can be in operation at any given time,” she said.

But those issues become moot if customers won’t venture outside as long as the threat of infection remains.

Cafes and retail stores reopened in Germany last week, but foot traffic was so low that some shops began shutting down again, leading the head of the Berlin-Brandenburg Trade Association, Nils Busch-Petersen, to characterize this interim period until things become fully normal again as one that will be even worse than the shutdown.

“At least when shops were shut they were entitled to government aid,” he told the Financial Times. “Now they’re on their own.”

A shopper inspects a flower market stall outside a Galeria Kaufhof GmbH department store in Chemnitz, Germany, on Thursday, April 30, 2020.

A shopper inspects a flower market stall outside a Galeria Kaufhof GmbH department store in Chemnitz, Germany, on Thursday, April 30, 2020.

Krisztian Bocsi/Bloomberg

A similar scenario could very easily happen in Canada. An Angus Reid poll conducted in the third week of April showed that 43 per cent of Canadians said they wouldn’t return to regular routines until no new cases were reported in their region for two weeks in a row. Only one in 10 said they would resume their former lives immediately.

“We just don’t know where the psychology of customers is going to be as we are reopening,” said Janet De Silva, chief executive of the Toronto Board of Trade. “The business owners we talk to want to be back in business, but the public needs to be confident with the guidelines on recovery that are to come.”

Caution is the watchword. Take Starbucks Canada. It announced this week that it would resume operations at as many stores as possible by the end of May, but will only choose select stores for walk-in services, based on the health situation in those communities. Certain stores that remained open for delivery, curbside pick-up and drive-thru services will act as test cases for the remaining stores.

All employees and store owners, according to a statement issued by Starbucks, will be required to wear facial coverings and take their temperatures at the start of each shift.

Starbucks staff wear masks at the drive-thru at a store in California.

Starbucks staff wear masks at the drive-thru at a store in California.

Matthew Stockman/Getty Images

There will also be provincial guidelines to follow. The Ontario government is recommending retailers control how many customers are in a store at one time, install barriers between cashiers and customers, introduce floor markings to show where people should stand and not accept paper money or coins — tactics many grocers are already doing.

Social distancing becomes even more difficult at factories, where workers toil side by side. Volkswagen AG provided an inkling of what manufacturers might have to do when it reopened the world’s biggest car factory In Germany on Monday.

Volkswagen made 100 changes to the way its plant operates, including spacing vehicles further apart to reduce employee interaction. Workers will have to wear masks where it’s not possible to keep them 1.5 metres apart and they are expected to avail themselves of hundreds of new hand-washing stations.

But that’s just the start. Employees are expected to check their own temperature before each shift, change into their work clothes at home rather than on site, and use their elbows to open doors. The tools they use will be disinfected after each shift and cannot be passed from one person to another.

Air conditioners are even set on high to circulate as much fresh air as possible. The company did not release a cost estimate of all these changes, but production is starting slowly to ramp up so the costs will be borne while revenues are reduced.

A worker wears a protective mask at the Volkswagen assembly line after VW re-starts Europe's largest car factory after coronavirus shutdown in Wolfsburg, Germany, April 27, 2020.

A worker wears a protective mask at the Volkswagen assembly line after VW re-starts Europe’s largest car factory after coronavirus shutdown in Wolfsburg, Germany, April 27, 2020.

Swen Pfoertner/Pool via Reuters

“Now it is up to line managers to make sure that all employees are fully informed about the prescribed measures before they start work,” Bernd Osterloh, chairman of the General and Group Works Councils of Volkswagen, said in a release. “All colleagues must know what to do to best protect themselves and others.”

Simultaneously considering economic and health concerns is why Toronto’s Recovery and Rebuild Strategy is being led by Saad Rafi, former CEO of the Pan Am Games, and Dr. David Mowat, Ontario’s former chief medical officer.

“What we have got right now is a recovery framework that will look at expected stages of recovery, how each sector has been impacted and how to support them through the fiscal challenge of opening up,” said De Silva who is working closely with the new office of recovery.

[embedded content]

That recovery will likely be slow. More than 55 per cent of economists polled by Reuters this week concluded that the pandemic would result in a U-shaped recovery, rather than an immediate V-shaped one, which should dampen anyone’s enthusiasm about the kind of economy we will have once most industries and sectors reopen.

“While the ‘restart playbook’ should be the immediate priority, governments must also identify and address sources of ‘systemic risk’ to the economy and potential ‘scarring’ that could impair economic recovery,” said a recent communique released by a C.D. Howe Institute working group on the post-COVID-19 environment.

The group suggested that prolonging the Canada Emergency Response Benefit program, for example, could have the adverse effect of discouraging workers to seek new work or return to the workforce, potentially deepening the economic crisis.

Part of a cheque for the $2,000 Canada Emergency Response Benefit (CERB).

Part of a cheque for the $2,000 Canada Emergency Response Benefit (CERB).

Chris Helgren/Reuters

“I did have clients express these concerns about employees not wanting to return to work,” said Lai-King Hum, a labour and employment lawyer in Toronto representing both employers and employees. “But it was because they did not feel it was safe to do so.”

Hum said that from a legal standpoint, if an employer has adequately taken the right health and safety measures to protect employees, they have to return to work.

“But the issue under the current circumstances, I don’t think the employer will actually take action and fire the employee if he or she chooses not to,” she said. “It very well could be an anxiety issue that could be justified in these times.”

Companies will also have to consider reviewing and updating their employee agreements and HR policies, as well as navigate possibly tricky privacy concerns related to testing employees and collecting data.

“Proper policies and procedures, particularly with regard to employee consent and notifications, the types of data that will be collected, how the data is collected, and the purposes for which it will be used, etc., will need to be in place and communicated to employees in order to respect privacy rights and minimize associated risks,” warns a recent report by Borden Ladner Gervais LLP.

Pearlstein, the public affairs professor at George Mason, said mitigating a prolonged recession should start with measures to address the heart of this economic crisis: a cash squeeze.

“We have a liquidity problem,” he said. “Individuals have a limited amount of cash, and businesses have a limited amount of cash.”

We have a liquidity problem

Steven Pearlstein, public affairs professor, George Mason

Pearlstein suggests that one method large companies could adopt is to make sure lower-wage employees get paid most of what they would normally would, but defer part of higher-wage employees’ compensation.

“If you have an employee that makes $250,000, for example, there’s no need right now to provide that employee with that entire amount of cash,” he said. “You could say, ‘Hey I’m going to pay you now at an annual rate of $100,000,’ and give the employee an IOU in some form at a later date, in order to preserve jobs of low-wage employees.”

Pearlstein said his argument is not rooted in a sense of fairness and justice as much as it is just good business sense.

“If you start having a large number of companies or a large number of households go bankrupt, or if businesses start defaulting on their debt, which triggers all kinds of legal stuff, then you make the recession worse,” he said.

The issue, though, is which company is willing to take the plunge first and adopt such a radical compensation strategy.

“Again, this is a collective action issue. It would be good if everyone does it, but it is in no one person’s interest to do it himself or herself,” Pearlstein said.

“That’s the thing about how we’re going to navigate the coming years of reopening the economy. Government guidelines will be issued, but we will interpret them in ways that make sense to us as individuals, companies and regions. If you’re looking for a one-size fits all solution here, that would be the wrong way to go.”

Financial Post

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Calm before the storm for Japan suicides as coronavirus ravages economy – National Post

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TOKYO — The phones at the Tokyo suicide hotline start ringing as soon as it opens for its once-weekly overnight session. They don’t stop until the lone volunteer fielding calls from hundreds of people yearning to talk signs out early the next morning.

Both operating days and volunteer numbers at the volunteer-run Tokyo Befrienders call center have been cut to avoid coronavirus infection, but the desperate need remains.

“There are so many people who want to connect and talk to somebody, but the fact is we can’t answer all of them,” center director Machiko Nakayama told Reuters.

Health workers fear the pandemic’s economic shock will return Japan to 14 dark years from 1998 when more than 30,000 people took their lives annually. With the grim distinction of the highest suicide rate among G7 nations, Japan adopted legal and corporate changes that helped lower the toll to just over 20,000 last year.

Worried the current crisis will reverse that downward trend, frontline workers are urging the government to boost both fiscal aid and practical support.

“We need to take steps now, before the deaths begin,” said Hisao Sato, head of an NGO that provides counseling and economic advice in Akita, a northern prefecture long known for Japan’s worst suicide rate.

National suicides fell 20% year-on-year in April, the first month of the country’s soft lockdown, but experts said that was likely due to an internationally recognized phenomenon in which suicides decrease during crises, only to rise afterwards.

“It’s the quiet before the storm, but the clouds are upon us,” Sato said.

Prevention workers see echoes of 1998 when a sales tax hike and the Asian economic crisis first drove annual suicides above 30,000, then to a peak of almost 34,500 in 2003.

Economic circumstance is the second biggest reason for suicides, behind health, according to 2019 police data, which also shows that men are nearly three times more likely to kill themselves than women, and most are in the 40-60 age group.

The current crisis, which is forecast to shrink Japan’s economy 22.2 percent this quarter, is especially dangerous for cash-strapped small and medium-sized businesses for whom government subsidies might not arrive in time.

“It’s tough. A lot of people are really worried,” said Shinnosuke Hirose, chief executive of a small human resources firm that has lost nearly 90% of its business. “It’s like waiting at the execution grounds to see if they survive or not.”

A Health Ministry official in charge of suicide policy told Reuters his department planned to ask for more money from a $1.1 trillion central government stimulus package to help fund measures such as extra hotlines. The official, who declined to be named as he was not authorized to speak on the record, added there were limits to central government action and local efforts were crucial.

JOBLESS LINK

Some believe the steps taken in recent years to bring down the suicide rate will hold firm through the current crisis, but others are not so sure.

Kyoto University’s Resilience Research Unit has predicted 2,400 more suicides for each 1% rise in unemployment. If the virus subsides in a year, unemployment could peak at around 6% by March, lifting annual suicides to around 34,000, it estimated. If pandemic conditions persist for two years, a rise to 8% unemployment by March 2022 would see suicides spike over 39,000.

“Of course social support is important … but they won’t be able to ramp this up suddenly,” said unit director Satoshi Fujii. “Preventing bankruptcies will start helping immediately.”

At the Tokyo Befrienders call center, the phones continue to ring. The formerly nightly service now opens on Tuesdays only, with one volunteer a shift instead of four, although it plans to reinstate another day in June.

“Everyone has tried hard to get through lockdown, but now they’ll reflect and think ‘why was I doing it? What hope do I have?’” Nakayama said. “At that time I think a lot could choose death.” (Reporting by Elaine Lies; editing by Jane Wardell)

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Nova Scotia's stimulus plan a good start in rebuilding devastated economy, economist says – TheChronicleHerald.ca

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HALIFAX, N.S. —

A $230-million stimulus program expected to employ 2,000 Nova Scotians and rebuild important infrastructure assets is a needed emergency measure to rebuild an economy devastated by the COVID-19 crisis, but there’s plenty of pain still to come, warns a Halifax economist.

“For a province like Nova Scotia, $230 million of debt is significant but on the other hand we’re still focused on containing the economic pain that’s been caused by COVID-19 and I think that’s the first matter of focus,” said Melvin Cross, a Dalhousie University economics professor. “If you have 2,000 people otherwise unemployed and have them doing something that will add to the assets of the province then such a program is worth considering.”

Premier Stephen Mcneil unveiled the provincially funded plan on Wednesday when he announced the province’s economy would completely reopen on June 5. The provincial monies will pay for projects across the province, such as roads, bridges, school repairs and museum, courthouse, and hospital renovations. Statistics Canada reported earlier this month that 50,000 jobs were lost in Nova Scotia in April.

The professor said the program is a reasonable first response in addressing “the economic pain we see people experiencing.”

“Will we have more discussions about the details of this program and have some dissatisfaction with it, probably. That doesn’t mean the concept is unsound.”

Cross said there’s a possibility that the Bank of Canada would pony up cash to pay a portion of the stimulus program, much better than the alternative, he added.

“It would be unwise to increase tax rates in the economy that’s already lumbered with unemployment and businesses struggling to deal with the consequences of COVID19.”

Scotiabank released a report earlier this month predicting Nova Scotia could feel less economic pain caused by COVID-19 compared to other provinces.

The report said besides Saskatchewan, Nova Scotia is the only province likely to avoid record deficits in the 2021 fiscal year. Yet it predicts Nova Scotia will have a roughly $970-million deficit.

While the government has a key role to play in assisting businesses and rebuilding the economy there’s a limited pot of money available, said the professor. He likened the province’s predicament to fighting a raging fire with only a limited water source available.

“If we drained too much water out of the lake and you have to stop, well do you have the fire controlled yet?” said Cross. “Well, you say at what point do you decide it’s not appropriate to use water to put out the fire?”

The Chronicle Herald inquired with the province about the economic consequences of the stimulus plan, including whether it’s now in a deficit and if money has to be drawn from other government departments to pay for the program, but did not get answers to those questions.

Cross said as long as there’s no effective treatment for COVID-19, the province and country can expect to feel significant economic pain.

“We might get a bit of relief this summer If COVID-19 acts the way better understood flu viruses act but the epidemiologists tell us that we must be prepared to manage a second wave of COVID.”

Patrick Sullivan, CEO of the Halifax Chamber of Commerce, said he was pleased with the province’s decision to reopen those businesses closed during the lockdown, including restaurants, hairdressers and gyms. A $25-million Small Business Reopening and Support Grant was also announced on Wednesday for eligible businesses, nonprofits, charities and social enterprises to open safely. That amounts to $5,000 grants to businesses to purchase public health equipment necessary to reopen their business; money that’s badly needed and appreciated, said Sullivan.

“But there’s still concern restaurants will only be reopening at 50 per cent capacity and there will likely be reduced tourism this summer. We appreciate the need to operate safely because we don’t want this to happen again. “

Because of restrictions on international travel, tourism operators in the province face a daunting summer season. He’s encouraging Nova Scotians to choose a staycation to support the sector and advocating for the government to introduce a $2,000 accommodations tax credit to incentivize people to stay home.

He said businesses are in need of plenty more support but said there are still assistance programs available to small businesses through ACOA and Community Business Development Corporation. Sullivan said the federal Canada Emergency Commercial Rent Assistance Program, offering to cover 75 per cent of rent for small businesses, is flawed and has limited uptake largely because it’s optional for landlords. He said financial assistance should be made available to the tenant, not the landlord.

In the end, he couldn’t predict how many businesses in Halifax might be forced to close.

“I don’t know and don’t think anyone does right now I think the majority of businesses have tried to get their way through this to get a reopening day.”

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As economy falters, restaurateurs look back at oil boom that gave rise to fine dining – CBC.ca

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It was 2012 and times were good in Newfoundland and Labrador.

Oil was flowing offshore, and expensive bottles of wine were flowing in restaurants around St. John’s.

Jeremy Bonia remembers the days when a barrel of oil sold for $120, and a bottle of wine could easily fetch more.

“I mean, we were doing well,” he said with a smirk while standing in front of his restaurant, Raymonds, on Water Street in St. John’s.

The booming economy paved the way for new possibilities on the city’s food scene — high end dining for people with money to spend, and corporations looking to impress potential clients.

There was as much business being done at the dinner table as the boardroom table, and people like Bonia used the influx of riches to build their dream restaurants.

Those places are empty now, as a pandemic and plummeting oil prices have wreaked havoc on the already fragile economy in Newfoundland and Labrador.

Bonia and co-owner Jeremy Charles were forced this spring to lay off about 100 staff members between Raymonds and their other restaurant, The Merchant Tavern, with no idea if or when they could bring everyone back.

Everything is changing

High-end restaurants depend on tourism to make money in the summer months, and are kept afloat throughout the offseason by major industry players, like oil and gas companies.

But when it comes to the symbiotic relationship between oil and restaurants, most of the damage was done before the world knew about COVID-19.

The riches of 2012 were followed by a crash at the end of 2014. The yearly average price for a barrel of oil plummeted from $98.97 to $53.03, and the big players on the Grand Banks started slashing.

“We started to see companies scale back either office sizes, or team sizes, and expense accounts as well,” Bonia said.

“Just the amount of meetings and physical people on the ground started to scale back quite a bit.”

Without a strong economy to prop up the restaurant industry throughout the offseason, Raymonds closed its doors for the winter this year. The decision was made before COVID-19 was on anybody’s radar.

In the historic Quidi Vidi Village, chef Todd Perrin knows all about the rise and fall of oil prices at Mallard Cottage.

Oil had been the catalyst to exploring the world of fine dining with traditional cuisine — places where concoctions of wild game and locally-sourced vegetables could fetch a pretty penny.

Todd Perrin, pictured in this file photo, cuts a cooked lobster at his restaurant, Mallard Cottage, in St. John’s. (Gary Locke/CBC)

“It made it possible to operate a restaurant and be able to pay the bills,” Perrin said. “At the beginning of my career, it was a tough market. When oil really hit, and St. John’s was full of people attached to the oil industry with expense accounts, it made a big, big difference.”

By the time the expense accounts shrunk, places like Raymonds and Mallard Cottage already had reputations bolstered by profiles in publications like The New York Times to help carry them through the leaner years. 

Those international awards and glowing reviews meant tourists were flocking to get in during the summer seasons.

Now, with no tourists due to COVID-19 restrictions, Bonia said he knows they’ll have a hard time continuing the way they had for a decade.

While other restaurants are relying on locals eating out to keep them afloat, he said that’s not likely with a place like Raymonds — especially with more than 30,000 jobs lost in the province since March.

“Fine dining is a niche thing. It’s not something we expect people to come out and do once a week, once a month even,” he said. 

“Raymonds will definitely feel it more than other restaurants.”

How oil will affect the next generation of chefs

But it’s not just local restaurants that are feeling the effects of the downturn in oil.

Roger Andrews, an advanced cooking instructor at the College of the North Atlantic, said he can look at his students on the first day of class, and pick out the ones who aspire to be the next celebrity chef.

He makes it his goal to give them the advice they need to hone their skills, but to also open up their minds to more realistic pathways.

With a downturn in the economy, students can expect fewer restaurants taking people in for internships, but that doesn’t necessarily mean a lack of options.

“Where they’re actually going to go is the big thing,” Andrews said.

“Perhaps we’re not teaching them for the restaurant setting as much as we would for the old age home.”

Roger Andrews is a chef and instructor of the advanced cooking program at College of the North Atlantic in St. John’s. (Gary Locke/CBC)

Another perk of the offshore oil boom was an uptake in the college’s marine cooking program.

People that grew tired of working in the volatile world of restaurant kitchens were returning to upgrade their education and head offshore. Oil companies handed lucrative salaries to cooks, who were ditching meagre pay onshore to head out on the rigs and supply vessels in the North Atlantic.

“They have families, want something more stable, or they go chasing money,” Andrews said. 

“You’ve got big oil offering up someone $100,000 a year — people are going to take that.”

Newfoundland and Labrador’s offshore has lost at least one oil platform for up to two years, and public figures from the premier to the president of Memorial University have called on the federal government to support the industry to prevent further losses.

Andrews expects the restaurant industry will thin out, too, with the combination of pains being inflicted on the province from all sides — Muskrat Falls in the north, offshore oil in the east, and a lack of tourists entering the province from the west.

“It’s a dog-eat-dog world, where you have to be very unique, and interesting and different,” he said.

“I can foresee with a bit of a change in the economy, the number of those restaurants will have to drop down a little bit, unfortunately.”

Raymonds is a fine dining restaurant in downtown St. John’s. With executive chef Jeremy Charles and sommelier Jeremy Bonia at the helm, the restaurant has earned high praise on the global stage. (Eddy Kennedy/CBC)

Jeremy Bonia hopes that won’t include Raymonds. To save his neck, he’s willing to alter the formula that made the restaurant a hit with critics around the world.

“We look forward to the day we can go back to what we were doing before,” he said.

“I’m sure we’ll open Raymonds, it just may be a different capacity, maybe as a different concept for a little bit.”

Bonia and Charles have had offers thrown at them before to leave behind their home province and start new ventures on the mainland, but they’ve resisted those — and Bonia said, they will resist more.

 “We’re not here for the weather and we’re not here for the money. We’re here because we love living here,” he said.

This coverage is part of Changing Course, a series of stories from CBC Newfoundland and Labrador that’s taking a closer look at how the COVID-19 pandemic is affecting local industries and businesses, and how they’re adapting during these uncertain times to stay afloat.

Read more from CBC Newfoundland and Labrador

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