Last year, a loan guarantee initiative for restaurants was introduced by the Newfoundland and Labrador government, aiming to support struggling businesses. However, as of December, none of the restaurants have availed loans under the $10 million program, as disclosed through access-to-information requests. While a few establishments have applied for guarantees, none have received financial assistance.
Marina Sexton and Vince McCarthy, co-owners of Sugar Hill Inn & Chanterelles Restaurant in Norris Point, highlighted the challenges faced by businesses like theirs. Factors such as escalating electricity bills, increasing food costs, and a persistent labor shortage are squeezing their operations. Despite considering the provincial loan guarantee program, McCarthy found it unsuitable for their business due to past bureaucratic complexities with similar programs.
Janick Cormier, the vice-president Atlantic for Restaurants Canada, mentioned that the eligibility criteria for the loan guarantee program were too restrictive, mainly benefiting restaurateurs already burdened with existing debts. This limitation deterred many potential applicants, resulting in minimal uptake of the program. Cormier emphasized the need for broader eligibility criteria to truly assist struggling restaurant owners.
Sexton and McCarthy stressed the urgent need for support in securing labor, especially in small rural communities facing an exodus of younger residents. They suggested lobbying efforts by the provincial government to grant access to the temporary foreign worker program for the tourism sector. Additionally, McCarthy highlighted the impact of rising living costs on rural areas, where businesses struggle to absorb increased expenses without passing them onto customers.
While the loan guarantee program aimed to aid restaurants in debt restructuring and relief, its effectiveness has been questioned due to its narrow focus. The program received 21 applications between September and December, with only 11 deemed eligible. Of these, six have lapsed, leaving five active applications awaiting loan approval from financial institutions. The government remains optimistic that successful applicants will secure the necessary loans to alleviate financial pressures.
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