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Toronto restaurant owners say they cannot survive coronavirus shutdowns

Last Updated Apr 2, 2020 at 5:24 pm EDT

Eastside Social in Leslieville is one of thousands of restaurants struggling to stay afloat after being forced to close due to the coronavirus pandemic. CITYNEWS.

With all non-essential businesses forced to close as the city battles the coronavirus pandemic, Toronto restaurants have been dealt what many are calling a death blow.

The city, known for being a “foodie town,” is home to over 17,000 eateries, from cult favourite holes-in-the-wall to more upscale establishments with months-long wait lists.

But some restaurant owners say they’re simply not going to survive prolonged closures.

“We are in a crisis in the hospitality industry,” says Cherie Stinson, owner of Eastside Social in Leslieville and Little Joe on Gerrard Street.

She tells CityNews they have been forced to lay off all 24 of their employees across both restaurants and have no idea how they’re going to meet their obligations to their landlords, suppliers and pay all other utilities.

Stinson says restaurants have the lowest profit margins and pay the highest rents compared to most other businesses and the situation is simple but dire – if they can’t generate income, they’re going under.

“I don’t think we will survive unless we get some sort of help from the government … I think provincially and federally they need to understand the impact on the hospitality industry,” she says. “I want to pay my landlord, he has bills as well … but I don’t know how that’s going to happen unless we, as small businesses, get some sort of stimulus package immediately to help do that.”

Michael Summerfield, owner of Prohibition Gastro House, also says his establishment of 13 years will not make it through this crisis.

“I’m pretty confident we’re finished,” he says, based on the fact that they are losing up to $30,000 a month with their doors shut. “We couldn’t even make our last payroll.”

Summerfield says after it’s all over, Toronto’s restaurant scene will be decimated and he estimates a 50 to 70 per cent failure rate among establishments in the city, including large chains.

While the federal government has introduced some measures to help small businesses, both Stinson and Summerfield feel they’re not particularly helpful to the restaurant industry.

Stinson says the government’s 75 per cent wage subsidy is of no use to a business like hers because they no longer have any employees to pay wages to.

“Maybe that would help us if they would prolong it for nine to 10 months when we can reopen again, because then we would actually have some sort of sense of control on how we can mitigate the losses we’re doing now.”

The government also announced the Canada Emergency Business Account, which provides interest-free loans of up to $40,000 to small businesses and not-for-profits. Up to 25 per cent of the loan will be forgiven if it is repaid by Dec. 31, 2022.

No further details have been released but Summerfield says if the government wants to help in a concrete way, that help will to have to be no-strings-attached — a loan or deferral won’t be much help to them.

“Most restaurants are not liquid – they’re functioning on the 45 to 90 day terms they have with their supplying partners. You usually make your money up on the weekend and that’s how you pay your staff after that,” he says.

Stinson adds turning to insurance providers to recover some of their losses has also been fruitless.

“[They say] we don’t cover anything to do with loss of business due to a pandemic. Everything has to be physical damage. That’s ridiculous,” she says. “Why are we paying insurance if we’re not covered for business interruption? It’s all interpreted wording, so how ever you interpret it is how they’re getting away with this.”

A new Restaurants Canada survey shows that Stinson and Summerfield are among thousands in the same position nationwide, with some dismal numbers released Thursday.

The survey estimates over 800,000 food service jobs have been lost in the country due to the COVID-19 pandemic and 300,000 of them are in Ontario alone.

It also says one in 10 restaurants have already closed permanently and another 18 per cent will permanently close within a month if current conditions continue.

Premier Doug Ford said he understands the federal government’s small business loan is likely not much help for restaurants in Toronto.

He says he will raise the issue with the finance minister and with Prime Minister Trudeau.

“I will emphasize this and see if we can get more funding for restaurant owners because it’s so tough on these people. My heart breaks for them,” he said.

Meanwhile as they wait for relief, Stinson says she’s paralyzed with fear.

“I’m terrified, I’m devastated. I can’t sleep at night, I’m worried, I don’t understand how we are supposed to get through the next month,” she said.