Editorial – Shoes still dropping

Jeff Burgar

There are news reports that one-third of Canadian restaurants might close their doors permanently by the end of this year. In America, some observers say the situation is actually much worse.

Specifically, they expect more than two-thirds of restaurants will be closed. Many of course, have still not opened since the shutdowns imposed in March and June of this year.

The fact is, many places that had “drive-thru” windows before the shutdowns are doing a booming business. True, their dining rooms were closed. But traffic that would have gone to full-service sit-down restaurants showed up at drive-thru windows.

Sadly, many full-service restaurants reacted badly to home delivery options. They never really had a robust takeout or home delivery to begin with. Plus, they never ramped this up as the shutdowns continued.

Let’s talk about problems here. The first is the crappy rent assistance program rolled out by Canada’s federal government. Call it a quirk of human nature, but there is a mentality that, loosely interpreted, means “I would rather have nothing than a little bit of something.”

To explain this as it applies to property owners selling a building, or renting that building. Only in absolute desperation will a property owner rent at a discount, just to get a tenant in his building. He would rather leave the property empty and have nothing! The owner doesn’t think about a low rent for a year, then a bigger than usual rent for a following year or two to make up the loss. This would give a break to a newcomer who will be struggling to prove his business idea. Plus, it keeps the property generating money.

But for so many owners, the reasoning is along the lines of, “cleaning up the mess from somebody who just moves in for a year, then moves out, isn’t worth the hassles. I would rather just leave it empty.”

So sometimes, a year goes by. Then another year. Then another. Then the signs go up about the huge discount now being offered. Or the building is put up for sale. Yup! The old “rather have nothing than a little bit of something.”

The federal rent subsidy program saw this thinking right across Canada. Landlords are asked to share the pain. Most refuse. Result? Offices, stores and restaurants moving out or simply closing. Still happening in fact. A lose-lose scenario.

A second result of virus lockdowns is the restaurants that already had a robust takeout or delivery business. Reports nationally is that many of these places doubled or tripled their takeout, even more.

But is it enough to pay rent on all those still shuttered dining rooms? Not even close for many.

There are many, many small businesses in the same boat. Some so-called “essential” businesses like hardware stores and gas stations are doing boom business. Many more are wondering how they will make ends meet when the subsidies and help programs run out.

Today, attention is focused on schools. So much so, we forget what is happening out there with jobs, jobs and business. It isn’t good for too many.

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