We’re now $343 billion poorer as a nation because of COVID-19. As a result, our national debt will reach unprecedented levels.
While some Canadians will dispute how the government is supporting Canadians and businesses during the pandemic, many will argue it didn’t have of much choice. There’s certainly some truth to that.
The numbers are massive. But what’s most concerning is that the government appears to lack an economic recovery strategy.
And the food service industry desperately needs one.
To that end, some countries are launching interesting programs to help the hospitality industry. In Britain, for example, a voucher program called “eat out to help out” was launched to support restaurants, pubs and other food establishments.
It’s corporate welfare, of course, but the pandemic is different, very different. Very rarely has one event affected both sides of the economy at once. Both supply-side economics and demand have been hard hit.
So the British government is spending more than £500 million on its voucher program over 13 days. It’s a lot of money.
The program covers August only, Mondays to Wednesdays, for a total or 13 days. All registered establishments will offer meals at half price, with a maximum discount of about $15 per person (roughly £10), including children. Consumers can use vouchers as many times as they want, so they can use the vouchers over consecutive days.
Vouchers can’t be used for takeout or delivery, only for sit-down meals. Alcoholic drinks are excluded.
Restaurant operators can start to register for the program on the British government’s website starting on July 13. From fast food to fine dining, operators can make claims and be reimbursed directly by the government.
Canada could follow Britain’s footsteps, but such an initiative has significant and obvious downsides.
For one, the ethics of a government giving money to consumers so they can eat junk food is questionable. Most governments in the Western world have been beating the health drum for some time, including the British government. Supporting fast-food chains with public funding seems a little awkward.
Plus, some of these establishments are part of huge conglomerates. Public funding given to well-resourced global franchises is problematic. On the other hand, the financial viability of many of these establishments is an issue. Estimates suggest 30 to 50 per cent of all restaurants will close within a year due to COVID-19. Public support for establishments that are bound to fail may be ill-timed.
But the hospitality industry isn’t just about continuity. It’s also about jobs, people, human capital and communities. Many people in the industry have precarious financial situations and need work and who they work for matters less.
For consumers, encouraging restaurant use means we get to congregate and feel somewhat normal again.
But according to a recent survey, more than half of Canadians still don’t want to be close to a restaurant any time soon, which is completely understandable. Many others, however, want to but may not be able to afford it.
So a restaurant voucher scheme could be the difference between staying home and contributing to an economy in desperate need of affection.
If such a program is implemented in Canada, the government should expect something back from operators. As a start, restaurants benefiting from the program would need to do their part by paying decent wages. A basic income or a substantial universal income subsidy would be more broadly effective, but no such program exists yet.
Menu prices would also need to be adjusted. Since June, many reports suggest that prices have gone up, not down. Vouchers could push prices higher since operators would know patrons only need to cover half the costs.
Public programs can motivate consumers to go out but restaurant operators would need to do their part as well.
Some clarity on expectations for both industry and government should be expected. All Canadians would pay for this, so it needs to be done right. There’s no such thing as a free lunch.
It’s time to get creative about putting our economy back to work. Giving consumers incentives to go out safely and participate in the economy, support restaurant operators and entrepreneurs, is more critical than ever.
Many restaurant operators need help – and the rest of us could use a break from our kitchens.
Dr. Sylvain Charlebois is senior director of the agri-food analytics lab and a professor in food distribution and policy at Dalhousie University.