With surveys saying most Metro Vancouver restaurant owners are losing money or barely breaking even, hopes are high that recent Bank of Canada interest rate cuts will stimulate consumer spending. This is key given the range of challenges the industry faces. For example, new federal changes to its Temporary Foreign Workers Program impact the sector.
That program's low-wage stream involves hospitality employers paying workers approximately $20 an hour. The federal government is cutting that stream for the hospitality sector, forcing restaurant owners who want to hire foreign workers to do so under a pricier high-wage stream, which could force them to pay up to $36 per hour. For most, that would not be viable.
Ottawa's intent in making the changes is to have fewer temporary foreign workers and more jobs for Canadians. Restaurant owners hope the interest-rate cuts will make consumers feel wealthier and more willing to spend money so they have increased sales that help them pay workers. Canada’s central bank .
Back in May, that rate was five per cent. Four consecutive rate cuts have prompted the country’s biggest banks to lower prime mortgage rates in tandem—to 5.95 per cent.
“The cuts are going to take a while to flow through the economy, but let’s face it: Any cut in interest rates will put some extra dollars in the consumer’s pocket for that extra coffee or glass of wine,” said Romer’s owner Kelly Gordon. Business has been hit-and-miss at Gordon’s pub-style bu.