Service sector

How COVID-19 negatively impacted BC’s service sector

Hiring staff at restaurants and bars in Vancouver six months ago looked like an “air dogfight” for Nate Sabine.

“One of my GMs [general managers] had eight interviews and hired eight people in one day,” said the business development manager of This Is Blueprint Management Ltd.

“Two of them showed up for work.”

Sabine’s company operates clubs and bars throughout the city, including the Fortune Sound Club and the Colony pub chain. It also promotes concerts and organizes the annual FVDED in the Park music festival.

While competition for workers in bars and restaurants has diminished somewhat, the local events and music industry is facing increased pressure after many workers left at the start of the pandemic there. almost two years old.

“There’s been a big loss of talent that’s going to take time to make up for because it’s experience,” Sabine said. “You can’t go to school and learn to be a production manager all of a sudden or learn to be a talent buyer.”

While a recall campaign is underway and many British Columbians have recovered from COVID-19 amid the Omicron wave, Provincial Health Officer Dr. Bonnie Henry has repeatedly indicated since January that some restrictions would be relaxed this month. But does the province have the labor capacity to meet the demand of BC consumers wanting to end their vacation period and return to town?

Job vacancies in the province totaled 157,575 in the third quarter of 2021, according to Statistics Canada data. And Ian Tostenson, president and CEO of the BC Restaurant & Foodservices Association, said vacancies are unusually high in his industry: up to 20,000 to 30,000 from a base of 190,000.

“But it was important even before the pandemic,” he said, adding that the sector is undertaking significant changes to address labor shortages.

Some restaurants are no longer open for lunch and others may close one day a week due to a labor shortage. Other establishments are now relying more on technology that allows customers to order and pay for meals at the table.

He estimated that takeout made up about 15% of orders before the pandemic and now makes up more than 30%.

“What this means for us is that more of our commercial sales are takeout and delivery, which is less labor intensive,” Tostenson said, describing the change as a rebalancing of the economy of the restaurant industry.

Meanwhile, the federal government has embarked on a campaign to bring in 1.2 million immigrants over three years.

So far, Ottawa is meeting its targets, having welcomed 401,000 newcomers in 2021, the first year of the campaign.

“When we think of new immigrants, the image that comes to mind is that of an individual or a family arriving in Canada via one of the country’s major airports. During COVID, only 30% of immigrants arrived this way,” Benjamin Tal, deputy chief economist at the Canadian Imperial Bank of Commerce (TSX:CM), said in a report last month.

“The remaining 70% of ‘newcomers’ came to Canada… from Canada. That is, these new permanent residents lived in Canada as temporary residents.

Even so, Tal said, the growing number of new immigrants is helping to ease Canada’s labor shortage and helping to limit wage inflation.

In November 2021, the median hourly wage for a server was $16 in the Lower Mainland and $17 on Vancouver Island, according to federal government data.

The minimum hourly wage in the province is $15.20, while the median wage for servers in Canada is $15.

Tostenson said wages are rising not only for servers, but also for kitchen support staff.

“We are going to see higher menu prices in British Columbia. This is quite natural, in order to be able to pay higher salaries and to meet the costs. But there is such demand that we know is coming that the cost pressure over time will likely diminish.