Post COVID, many Prairie restaurants struggling for survival

Hello Flatlanders,

I love a good homecoming story about someone who leaves the Canadian Prairies to pursue greatness, but their heart longs for home, so they return and create their legacy here. 

This week The Flatlander brings you the story of Dale MacKay—who left Saskatchewan to work with some of the biggest names in the restaurant business, like Gordon Ramsay and Daniel Boulud. 

If you’ve watched any of the TV shows featuring Ramsay, you know he can be a nasty person, which MacKay found challenging as someone from the Canadian Prairies. 

“Coming from Saskatchewan, people are humble, polite, thoughtful. At times, working with Gordon Ramsay, I lost that,” MacKay told The Flatlander. “When I first joined him, it was a super aggressive and competitive kitchen. You had to be like that to hold your own. There were times where I was like, ‘You’re turning into an asshole.’ Thankfully the kitchens, like society, have changed so much over the years.”

MacKay was the first winner of Top Chef Canada and went on to open restaurants in Vancouver and Toronto. But he always wanted to go back to where he grew up and returned to Saskatchewan. He opened serval restaurants in Saskatoon and Regina, where he and his team served up dishes inspired by the local ingredients and traditions of the prairies.

Currently, he owns Avenue in Regina and Little Grouse on the Prairies in Saskatoon. 

Earlier in July, he shuttered Ayden Kitchen and Bar in Saskatoon after he could not renew the lease. And he recently sold Dojo Ramen in Regina to the owners of another restaurant Milu. 

While many restaurants are still financially hurting after the pandemic, MacKay says his decisions to close weren’t financially motivated—rather, he wanted to do something new. This is why he closed Sticks and Stones in June, another one of his Saskatoon restaurants, after six years in business and relaunched it as F&B Restaurant last week.

F&B stands for food and beverage. 

“To us, and many, food and beverage is the pillar of our lives. How we gather as family, celebrate with friends, make new memories, or reminisce over old ones.

“Hearing all the wonderful stories from guests of our restaurants, and the impact those spaces have had on so many people, truly reminds us of why we do this,” reads a statement on the F&B Facebook page.

You can read our full story on MacKay here.

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Prairie restaurants challenged by debt after the pandemic

While many of us have put the worst of the pandemic behind us, Prairie restaurants are still feeling its effects.

Some restaurants that have managed to stay open are sitting on massive debt and are struggling to pay back Canada Emergency Business Account (CEBA) loans. 

The federal government created CEBA to help small businesses during the pandemic by providing interest-free loans of up to $60,000.

About 83 per cent of table service restaurants and 56 per cent of quick-service restaurants in Canada received CEBA and have until Dec. 31 of this year to pay the loans back. (The deadline was extended by a year).

According to a Restaurants Canada survey, about 20 per cent of restaurants will not be able to repay their loans. 

This is in part because Canadian restaurants have seen a 12 per cent drop in economic activity from 2019 to 2022.

How important is the restaurant industry to the local economy?

Prior to the COVID-19 pandemic, Saskatchewan’s $2.4 billion food service industry represented three per cent of the province’s GDP and was the third-largest private sector employer.

But in the first few months of the pandemic, Saskatchewan establishments lost up to $450 million and 25,000 jobs were lost in the food industry. 

By November 2020, the situation was better. Saskatchewan restaurants unadjusted industry receipts totalled $123 million, down from $159 million the year before, so that is a loss of about $36 million.

Losses similar in Manitoba

Last summer, the Manitoba Restaurant and Foodservices Association did a survey and found that local restaurants are doing about 30 to 40 per cent fewer sales than they were doing pre-pandemic. 

From 2020 to 2021, Manitoba lost nearly 12,000 jobs in the hospitality sector, according to data from Restaurants Canada. 

Labour shortages and reduced hours

During the repeated closings and re-openings during the pandemic, many restaurant workers transitioned to different jobs that offered more stability. 

Now the local restaurant industry continues to face labour shortages meaning some businesses have reduced their operating hours. 

Debt payback deadline looming 

While many business organizations, including Restaurants Canada, have asked the federal government to extend the CEBA loan repayment period for a second time, the deadline, at the time of writing this, still stands. 

Only 21 per cent of CEBA loans have been fully paid.
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According to Restaurants Canada, bankruptcy filings in food service have increased 116 per cent since 2022, and the organization is expecting more restaurants to close.

“Post-pandemic operational challenges like inflation, labour shortages and supply chain hurdles are further diminishing the profitability of restaurants and lengthening the sector’s recovery process entirely,” said Olivier Bourbeau from Restaurants Canada in a May 8 news release.

Restaurants’ operational costs are on the rise due to inflation; utilities have increased by six per cent, the cost of beef has increased by nine per cent, seafood by 11 per cent and chicken by 13 per cent. The price of cooking oil is up 40 per cent.

Restaurateurs have been forced to absorb as much of these increased costs as they can to avoid losing customers. 

Restaurants Canada said half of all food service companies were currently operating at a loss or just breaking even.

Many of its members are debating whether to remain open or continue to incur further debt. The other option is to file for bankruptcy. 

Five stories from Manitoba you may have missed

1. Manitoba energy strategy includes wind power and ‘surge pricing’
2. Not searching landfill for human remains might embolden killers, feasibility study shows 
3. Manitoba government planned a COVID-19 video and song for project that was abandoned
4. Winkler councillor on region’s library board to ‘exert influence’ over what books should be available or visible to children on library shelves
5. Manitoba crash highlights safety concerns about Canada’s highways and trucking industy

Five stories from Saskatchewan you may have missed

1. Saskatchewan man convicted of killing brother 26 years ago over farm dispute 
2. Humboldt, Sask. archeological dig opens ‘a window into the past’
3. 50 years of riding in the Nipawin parade for 68-year-old cowgirl 
4. Bekevar Wind Energy project underway in southern Saskatchewan
5. ‘Old boys’ club‘: Employees question how Regina rebrand was approved