Money, Money, Money
Have you looked at a restaurant menu lately? Even at mid-priced joints you’re looking at $25 for a burger, $30 for a plate of pasta, $50 or more for a steak (extra for the sides). On top of that there’s tax — PST, GST, liquor tax, “health tax” — and tip, which now seems to start at 20 percent. A glass of wine and a snack can easily set you back $100.
Yet, with few exceptions, restaurants aren’t exactly raking in the dough.
In fact, in February, Restaurants Canada reported that 62 percent of restaurants across this country are either losing money or barely breaking even. That’s a nine per cent increase from last July and up a shocking 52 per cent from before the pandemic, when it stood at 10 per cent. Last year was a record-breaking year for restaurant bankruptcies. This year isn’t looking much better.
Ask anyone who works in the restaurant business and they will tell you the same thing: The industry is in crisis. The question is, why? What can we do about it? Whose job is it to fix it? And maybe most importantly, why does it even matter?
Well, it’s complicated. But it’s also pretty simple.
It’s the numbers
“It’s a business, so it’s about money,” says Robert Belcham, the still very active past-president of the Chefs’ Table Society (CTS).“Why isn’t there enough money? Because if there was enough money, there wouldn’t be a crisis.”
At Anh and Chi, the popular Vietnamese restaurant on Main Street, there is always a lineup of people hungry for the crispy spring rolls and fragrant pho. But even there, co-owner Vincent Nguyen has struggled. “It’s crazy,” he says. “Just in the last four months, we’re full. But we’re just breaking even, and we’re Anh and Chi. It’s the food costs, it’s the supply costs, it’s the labour cost. Our bowl of pho that was $16 is now $20.”
Here in B.C., the province’s 15,000 restaurants bring in $18 billion in sales per year and employ nearly 200,000 people —most of the time. “The estimate is that we are short 25,000 workers even today and that’s mainly cooks and chefs,” says Ian Tostenson, president and CEO of the British Columbia Restaurant and Foodservices Association.
Blame COVID. After the pandemic shut restaurants in March 2020, they reopened a few months later to a series of restrictions that required one pivot after another: limited hours, limited seating, mask mandates, endless sanitizing, Plexiglas barriers. Even fine-dining establishments started offering takeout and meal kits. And then there was staffing — no temporary foreign workers to run prep station and an exodus of workers leaving for jobs with more stability, better pay and fewer aggressive customers.
Still, Tostenson says, “During the pandemic, we had a couple of things going for us. We were united, we had a common voice and we had a partner in the provincial government and the federal government. We could do a lot really fast. We did a number of things that helped the industry reposition itself.” Among them: fast-tracking patio approvals and wholesale pricing for alcohol.
But COVID is just one factor. There is also inflation, though that, too, was fuelled, if not caused, by COVID. Tostenson says the average increase in costs to restaurants is 20 per cent (as of March 2023), but despite what you might think, they have only increased food prices by seven per cent, leaving a gap of 13 percent in revenue. (All estimates here are averages.)
At the same time, many restaurants are still carrying heavy debts from pandemic loans. “And then there’s a lot of pressure on wages and we expect more of that because the minimum wage goes up each year,” Tostenson says.
All of that is why the BCRFA has joined with Restaurants Canada to put all the issues into a single, digestible “Unhappy Hour” menu that includes items such as “Deep Debt Pizza” and “Struggling to Make Ends Meatloaf,” and presented it to government at all levels. “We want to make sure that every single person who is responsible for regulations is all on the same song sheet,” he says. Otherwise, “It’s like having an orchestra without a conductor.”
In addition to the financial pressures, he notes, restaurants must navigate a steady stream of new regulations (“Regulation Jumbleaya”) regarding everything from labour codes to environmental standards to the employer heath tax that was introduced in 2019. Yet, at the same time, approvals for permits have slowed to a pre-pandemic crawl, with everything tied up in “a lot of red tape and replication.”
“We are going to need the help of government, not in terms of a bailout, but in terms of responsiveness,” Tostenson adds. Otherwise, he says, “I think we’re going to see an active decrease in the number of restaurants because of all the pressures.”
It’s the labour
COVID didn’t cause the problems in the industry, and it hasn’t broken it, but it has put enormous strain on the cracks that were already there — and have been for a long time.
“Restaurants have been in crisis for 10 years. It’s not a new thing. It’s never been an easy business; it’s always been difficult,” Belcham says. But, he adds, “There are a lot of positives, too. There’s the camaraderie and the people you make happy. We have really smart people in this industry who are in it because they love it. We could fix the problems if we had the intestinal fortitude.”
That’s what the Chefs’ Table Society is working on, with an ambitious slate of initiatives such as Cooks Camp, a yearly retreat where cooks and chefs share challenges and best practices for solving them, tackling everything from butchery to accounting to substance abuse. “That can change lives,” says Shawna Gardham, CTS executive director. Adds Belcham: “If you help individuals make better decisions, you make better decisions as a group.”
Restaurant kitchens have long romanticized what the late Anthony Bourdain described as “the way a bunch of motley misfits can be a family.” But that family has often been a dysfunctional one: overworked, poorly paid and often without benefits to cover chronic physical and mental health problems.
Little wonder, then, that when COVID came along, so many workers left the industry. And although guests who’ve experienced less-than-stellar service may think the problem is with wait staff, it’s actually the kitchen where the shortage is most dire. Cooking is physically hard, often ungratifying work, and cooks often don’t benefit from tips to the same extent that servers do. “The tip model is utterly broken,” Belcham says. “You’re leaving the wage up to the whim of the customer. It’s utterly disrespectful. It doesn’t promote professionalism in the industry.”
And professionalism is at the top of CTS’s agenda.
Belcham would like to see a certification system for cooks —with accompanying pay increases at each level of training —similar to what electricians or plumbers enjoy. “In cooking, it’s the same system, but there’s no pay bump until you get into management,” Belcham notes. “One way we could change the whole game is to make it mandatory that people have training to work in a kitchen.”
Working toward that, CTS is managing two grants that could be game changers for the industry.
The first is putting students who face barriers through culinary school. CTS helps with everything from tuition, child-care, meal cards and transportation to ESL training and resumé-writing for those who struggle with English. Already, it has added 50 newly trained cooks to an industry that desperately needs them.
The other grant is for creating an online toolkit designed to connect industry professionals with resources for everything from HVAC experts and accountants to suppliers of organic greens —putting problems and solutions together in one easily accessible place, and all for free.
“Chefs’ Table is a conduit,” says Gardham. “The more we communicate with each other, the more we can help each other. It’s the whole idea of better together.”
It’s sharing expertise
Robert Clark and Julian Bond have been friends since they cooked together at Star Anise, back in 1992. Today, Clark is best known for co-founding Ocean Wise; Bond for his years as vice-president and chief operating officer at the Pacific Institute of Culinary Arts. Both chefs are respected mentors and leaders in the industry. Now, they’ve created a culinary consultancy called Aramé, whose mandate is promoting the sustainability of the restaurant industry.
It’s a way of giving back to the industry they love, and they often share their expertise for free.
“I’ve been given a second chance at life,” says Bond, who went through a serious bout of cancer a few years ago. “We want to do good in the world. We want to help people.”
To do that, the consultancy is “formalizing what we’ve been doing for years anyway,” Bond says. “And with our pasts being so different, we hear the yin and the yang of it.”
While the pandemic exposed faults in the industry everywhere, they note that the situation is especially critical in Vancouver, where leases are higher than anywhere else in the country.
“It means you can’t pay your staff or you can’t afford your food. It’s that simple,” Clark says. But, he adds, “Based on my experience and what I see, for a lot of restaurants that are struggling, they just need a fresh pair of eyes to tweak what they’ve got.”
That might mean changing the hand movements used to prepare a dish, reducing the amount of time and labour involved. It might mean finding the right person to deal with the grease traps or a better source for seafood. Or it might mean a total overhaul of the menu. “You don’t need to put a Caesar salad on your menus if your Caesar salad sucks. You’ll get your customers— once — and they’ll never come back,” Clark says.
He adds: “Understanding what’s needed helps us connect people. The only thing you have to do to get business from a chef is to solve a problem for them. And there are so many problems.”
The biggest challenge they want to tackle is an outdated mindset that has restaurants still doing business the way it was done in the1980s, ’90s and 2000s. “You have to move on. You have to make a change,” Clark says. At every level, they say, restaurants have to offer true value and hospitality, whether it’s a Le Crocodile offering luxe service or a small, family-run hole-in-the-wall. As Clark says, “They are offering hospitality and value and that is the future.”
And despite all the bleak news, the chefs-turned-consultants are optimistic. “At the end of the day, the industry is changing and it’s going to change,” Clark says. “The hospitality industry will be better off for the pain COVID has caused.”
It’s about community
During the height of the pandemic, when restaurants had re-opened but social distancing was still a thing, siblings Amélie and Vincent Nguyen had a problem. Their restaurant, Anh and Chi, had always been walk-in only. But now they worried the customers lining up outside might be exposing themselves to the virus. “We thought, how do we make that safe?” Amélie says.
Then Vincent remembered something from when he worked at Café Medina. “We chose a charity and $20 from each reservation went to the restaurant’s charity,” he says. And so the idea for a reservation-by-donation program was born, with100 per cent of the money going to a charity chosen by the customers. In two and a half years, they have raised more than $250,000, mostly for small, local non-profits — and they’ve inspired other restaurants to launch similar initiatives.
“Most people at the core of their heart are very generous,” Amélie says. “We try to do preventative. We try to go upstream and focus on young people. Even if we don’t raise anything, we raise awareness.” Adds Vincent: “And it’s not forced. It’s all by choice. Some people think we get a tax write-off, but it’s a wash.”
Community has always been at the heart of Anh and Chi, a hip and stylish restaurant that replaced the family’s long-time restaurant Pho Hoang in 2016. (The siblings started it “to get mom out of the kitchen,” Amélie jokes.) They’ve received the Michelin Bib Gourmand designation and have earned accolades for their food and cocktails, for being the most photogenic restaurant in Vancouver and for their then-revolutionary gender-neutral bathrooms.
“We just try to find ways to break down barriers in the community,” Vincent says.
Anh and Chi demonstrates just why restaurants matter. As the CTS’s Gardham says, “We are the heartbeat of the neighbourhoods.”
It’s not just that restaurants directly employ thousands of cooks and servers and dishwashers. They also support a vast and sprawling network of fishers, farmers, bakers, butchers, winemakers, brewers and the truckers who drop their products at the kitchen door. They promote food security in our communities, give newcomers to Canada a foothold in the economy, provide places for people to gather and tell the world who we are and what we care about.
“Food is culture,” Belcham says. And that’s why, he adds, “We need to be supportive of each other in a way that is fair to the customer, fair to the restaurateur and fair to the supplier.”
It’s about you
Finally, it all comes down to you, the consumer. You’re the reason the chef is sourcing the first spot prawns of the season,the server is giving the silverware an extra polish, the somm is decanting that Pinot Noir so carefully. Making you happy is why they work a 14-hour shift and get up and do it all again the next day.
So what can you do to keep your favourite restaurants open? First, keep going to them, even if you decide not to order that $50 steak. “As diners, we can be more modest when we dine,” Amélie says.
We can be more thoughtful and intentional, too, choosing to support local growers, producers and independent operators rather than global conglomerates. “Put yourself in the shoes of a farmer or fisherman and think of the steps it takes for that food to get to you, and maybe you will appreciate it more.”
If money is tight, maybe order a small glass of wine rather thana large one, or the vegetarian risotto rather than the veal chop. No matter what, Tostenson says, “Every time you come in, we appreciate it. You can still go to a restaurant and you can still have fun and navigate the menu, whether its happy hour or appetizers.”
Most of all, Clark says: “People have to start appreciating value.” Value, please note, does not necessarily mean cheap. It means a fair price for good quality. “People are looking for experiences. People are willing to pay for good, positive, authentic, real experiences. We should be paying the true cost of food and we are not paying the true cost of food.”
While we are adjusting our expectations and recalibrating our ideas around value, people who love restaurants are working hard in kitchens and meeting rooms across this country to ensure that they not only survive but thrive in this new and challenging world.
And just maybe we’ve been asking the wrong question all along. “The question should not be how to lower food and labour costs,” Clark says. “It should be: How do we make enough money to afford the food and labour costs?
