Here is an article recently featured on Financial Post written by our own David Clement. David is a senior policy advisor for my campaign.
According to a recent survey of restaurant owners, more than 29 per cent of food-service operators can’t turn a profit under current social distancing restrictions, while 60 per cent said that if things continue, they’ll have to permanently close after 90 days.
Under normal conditions, the food service industry employs 1.2 million Canadians, which makes this doomsday scenario truly frightening. Short-term mass restaurant failures would certainly take a toll, but the long-term impact would also be devastating. At some point or other, most young people rely on the food service industry for their entry into the workforce. It also provides flexible work for many older Canadians. The impact of eliminating these employment opportunities would be hard to measure but clearly would not be good.
What can policymakers do to get Canadians eating at restaurants again? We could, as some have suggested, follow the lead of the U.K.’s Eat Out To Help Out campaign. For the month of August, the British government provided a 50 per cent discount, to a limit of £10 per diner, on food and soft drinks every Monday, Tuesday and Wednesday for restaurant-goers who ate in.
The goal was to provide a gentle nudge to consumers to alleviate their concerns about eating at restaurants and to give participating restaurants a revenue boost. Take-up was impressive, with more than 64 million meals being claimed over the first three weeks. On top of that, some major chains have said that they will honour the Monday-Wednesday 50 per cent discount moving forward, without government assistance, bearing the cost themselves.
Could it work in Canada? Possibly, but it largely depends on what we are “nudging” consumers back to. Some of us aren’t particularly excited about returning to $9 pints of generic beer and $17 cheeseburgers. That isn’t a slight against Canada’s food service industry; it’s a statement about the constrained environment legislators, at all levels, have created via over-regulation.
If we are going to nudge people back to restaurants, let’s make the food service industry fun again. Some simple changes in government policy could go a long way to creating a much more dynamic and ultimately fun environment for consumers, which will help make these businesses profitable once again.
Starting with alcohol, Canadian provinces should remove minimum pricing on alcoholic beverages and allow for restaurants to order directly from producers, rather than be required to order through provincial liquor control boards. Opening up the pricing model would allow for more competition — and possibly even higher margins on alcohol once bureaucracy can be side-stepped — while better serving consumers. Removing the liquor control board as the middle man would help combat inflated prices and drastically reduce costs for restaurants.
The provinces should also repeal their open-container laws and allow for outdoor alcohol consumption, something that is commonplace all over Europe. This change would allow for licensed restaurants to sell to-go drinks for those who are enjoying what is left of our summer months. Should I be able to enjoy a beer while taking a walk through a park? Of course. Should a licensed restaurant or bar be allowed to sell me that beer? Why on earth not?
Beyond alcohol, restaurants and bars should be allowed to incorporate non-smokable cannabis products into their menu offerings. If I can order a beer at a bar, I should be able to order a cannabis beverage. Giving cannabis consumers a legal commercial setting in which to consume beverages or edibles gives those consumers something that has never before been possible, while opening restaurants up to an entirely new customer base. New product offerings of cannabis beverages and edibles would be easy to implement. All that provincial authorities would have to do is roll these products into existing server licenses such as Smart Serve. If we can trust servers to serve alcohol, we can trust them to serve cannabis products.
For food, the elimination of supply management would be a major long-term help to both restaurants and consumers. The quota and tariff system that restricts the market for chicken, dairy, eggs and turkey artificially inflates restaurants’ costs and get passed along to consumers via higher prices. We know that supply management is a backwards policy that pushes people under the poverty line by inflating grocery bills upwards of $500 per year per family. Allowing for competition for these products would go a long way to reducing costs for the food service industry.
With the end of summer upon us and colder temperatures on the horizon, the clock is ticking for policymakers to breathe life back into the food service sector. If we are going to nudge people back to restaurants, let’s make restaurants fun and affordable again. Simple changes could go a long way to avoiding mass restaurant bankruptcies.
- David Clement
P.S. I am excited to have David Clement on our team. Read more about him in our press release.
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