Income tax relief for small businesses in the food & hospitality industry

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We are writing with great concern about the effects of Covid-19 as representatives of over 35,000 employees and business owners in the food and hospitality industry.

                  We’ve been following the global response very closely, and have no reason to believe that what is happening in other countries won’t happen here. The World Health Organization has called this a pandemic. They recommend social distancing, schools are closing, Parliament has been suspended, and people are stockpiling on food and supplies out of fear. Events of all sizes far and wide have been cancelled, some leading into the summer. As you can imagine the volume of patrons in restaurants and all food businesses alike has decreased significantly – lows like we’ve never experienced before. Catering companies, event planners, suppliers and event venue operators are all experiencing an extreme loss of business, with 90% of their income erased due to cancelled events. If you didn’t know this already, the profit margins for restaurants and food businesses are extremely low, even for the corporate-owned.

Those who will be most vulnerable to these effects are independently owned businesses that must somehow remain afloat during these times. Rents, insurance, equipment leases, car payments, staff (who haven’t been laid off), and the costs of perishable food that must be purchased in order to remain open are all costs that cannot be avoided or unpaid by businesses. They must also maintain their own costs of living to stay alive. This situation we are in does not qualify us for employment insurance, and if we did qualify we would have to wait for 12 months. Business insurance will not cover us for loss of business in this instance. If we become ill, we have no protection. If we have no work, we have no protection. If we have no customers we cannot wait out the pandemic and reopen doors.

The federal government announced $1 billion in funding to address Covid-19. Of that, there is nothing for small businesses, for those working in the gig economy, for consultants, or for the self-employed. One of our main concerns is the upcoming tax season. We will be required to pay the government hundreds, in some cases thousands of dollars. If we don’t pay our taxes on time we are charged interest. For all of the reasons stated above, that chunk of money is more necessary now than ever in order to pay our rents, staff, ingredients, supplies and most importantly to support ourselves when there is little other forms of support available.

We are asking that the Canadian Federal Government temporarily excuse all independently owned businesses and business owners from paying their HST and income tax from the year 2019 that is due in 2020, and to postpone the payment deadline until 2021. Furthermore, in doing so, we would like there to be staggered payment terms for those who will not be able to pay that large lump some of money in 2021 due to any further unprecedented financial loss that is to occur in the coming months. Last but not least as is happening elsewhere many small businesses will require mortgage relief and rent relief for the near future.


The Food & Wine Industry Navigator