Restaurant bankruptcies up 112 per cent over last year: CEO

The restaurant industry is still struggling to steady itself after the COVID-19 pandemic, as evidenced by a surging amount of declared bankruptcies across the country.

Kelly Higginson, CEO of Restaurants Canada, told CTV’s Todd Battis in an interview Thursday they have seen an 112 per cent increase in bankruptcies over last year.

“We are really concerned over this coming year because of the debt and all the inflationary pressures the industry has been hit with,” she said.

Restaurants Canada is currently calling on the Nova Scotia government to provide transitional support to restaurants as they grapple with minimum wage increases. Higginson cites provinces like Manitoba and Newfoundland and Labrador, which are providing $2 million to help small businesses transition to higher minimum wages.

“There’s a minimum wage increase coming and our operators have seen seven wage increases since 2020, which accounts to a 31 percent increase along with all the other increases,” Higginson said. “It’s been very volatile for operators these last four or five years. We’re looking for Nova Scotia to follow the lead of (Newfoundland and Labrador and Manitoba) and provide some breathing room and wage transition.

“We have 63 per cent of operators in our industry operating at a loss or barely breaking even and it was 12 per cent pre pandemic. As the fourth largest private employer in the province and a very labour-intensive industry, any impact to an increase in wages disproportionally hits our industry.”

Higginson said the industry brings in $2.7 billion to Nova Scotia and Restaurants Canada is hoping a wage transition could provide “breathing room” for operators to get out from under heavy debt.

“Adding that extra support for such a vital industry I think is going to make a big difference,” she said. “There’s definitely a sense (leaders) want to work with us."