"Significant spike" in restaurant closures in Vancouver spurs industry pushback

More than half of the food and hospitality businesses in BC are unprofitable, advocates say, and they are calling for help to stay afloat amidst a “significant spike” in closures in recent days.

That’s according to the BC Restaurant & Foodservices Association, which has been trying to raise awareness of this cause through its “Save BC Restaurants” campaign, which includes an “Unhappy Hour Menu” listing their concerns like menu items.

Restaurant closures have been top of mind for many people, including customers, who are saddened by the growing list of their favourite spots shutting their doors. According to Restaurants Canada, it’s the worst it’s ever been.

“There are some really strong restaurants [closing] that are well known. They just can’t make it. I mean, it’s just there’s no money,” said Ian Tostenson, president and CEO of the BC Restaurant & Foodservices Association.

Adding that customers are still going out, but they aren’t spending as much.

“They are sharing pizzas, they’re going to happy hours, and they’re really managing your pennies.”

@cityofvancouver/Instagram

Tostenson says it’s on leaders to address this before more businesses are forced to close.

“The problem is there is no profitability in the industry right now. It’s been really an issue of inflation that we’ve been faced with…The good news is that’s coming down. [Plus] high-interest rates really hampered a lot of restaurants [which] took on an incredible amount of debt because of the pandemic, and we think a little bit of this is being exasperated now because of the deadline for the repayment of the CEBA loans,” Tostenson explained.

Many businesses have been struggling to pay back their Canadian Emergency Business Account (CEBA) loans. Thousands received a government-funded, interest-free business loan introduced in April 2020 to pay for expenses during the pandemic.

Shawn Goldberg/Shutterstock

Another 50,000 small companies applied for a special extension deadline, which fell on Thursday, and many others have petitioned to have that moved further.

He says a lot of those businesses could not get refinancing from the bank, or it’s just simply not worth it.

“The fact that restaurants aren’t making much money right now and a lot of them have folded is because their leases are due, and it’s not worth their time to renew the lease and take on all this liability,” he added.

Slow approvals for business licences, like patio permits or foreign worker programs, are taking months, and Tostenson says he has sat down with Premier David Eby to discuss how to cut the red tape and reduce the hidden costs.

Community impacts

Amir Ali/Daily Hive

Recently, Finch’s Tea House closed its West Pender location after years in the neighbourhood. Its owner blamed the pandemic, constant construction, and a string of vandalism for the closure. Nine windows were smashed within a year and a half, prompting the owner to start an online fundraiser, but their efforts were not enough.

“We are now being defeated by the neighbourhood,” said Sheryl Matthew, Finch’s owner.

Tostenson says the costs of crime on businesses have been really expensive, but thankfully, many businesses are seeing a decline since the peak of the pandemic days.

Earlier this month, Tacofino announced it would be closing its Gastown location this summer after a decade in that spot.

Tacofino Gastown (@tacofino/Instagram)

“After a decade of great food, amazing people and lots of laughs, our doors will soon close, not by choice but by change,” says Gino Di Domenico, Tacofino’s managing partner.

Its lease expiration and “uncertainty in redevelopment plans for the building” were among the reasons for the departure.

It’s not alone. Last year, Dished reported the closure of more than 60 beloved restaurants in the region, and already this winter, more than a dozen others joined the sombre list.

Freehouse.co

While recent headlines have surrounded the financial failings of two well-known restaurant groups, the Joseph Richard Group and the Donnelly Group, in recent months, Tostenson says there is some staying power for many of the big chains.

“You will see the big chains, the Cactus’, The White Spots, the Keg. They’re gonna be in business and will get through this because they have the infrastructure to endure, but it’s not even happy for them right now, but they have more strength to endure this than the little guy for sure,” he said.

However, 18% of restaurants could close because of pandemic-related debt in the months ahead.

But he adds that many of the smaller restaurants, especially ethnic restaurants, are able to open and have some stability right now because they don’t have as high of an overhead.

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With files from Irish Mae Silvestre, Amir Ali, Marco Ovies, and Hanna McLean