In recent years, Restaurants Canada has stepped up its advocacy game to navigate a heavy cocktail of legacy and new challenges for the foodservice industry. At the helm of this transformation are Kelly Higginson, President and CEO, and Richard Alexander, Executive Vice President of Government Relations and Public Affairs.

Together, they have led a strategic shift in how the association represents and champions the industry on issues ranging from cost relief and labour shortages to sustainability and consumer affordability, and their vision is returning undeniable results.

In this candid interview with MENU, Kelly and Richard discuss how and why their advocacy approach has evolved, the challenges faced by operators, and their vision to unify the industry and create lasting, meaningful change to counter the headwinds facing Canadian operators.

MM: Over the past few years, Restaurants Canada has significantly and noticeably transformed the strategy behind its advocacy efforts on behalf of the Canadian foodservice industry. Can you share your vision behind the new style and approach? Has it been working?

Kelly Higginson: A lot of the groundwork, conversations and initiatives we’ve undertaken have really amplified our effectiveness in the advocacy space, but one aspect really stands out for me, and that’s relationships. We’ve stayed focused on building close, strategic relationships with people who have real influence and who are true champions of our industry.

Previously, we didn’t have those champions or representation at the federal level. Now, we’ve established productive connections in finance, at the Prime Minister’s Office (PMO), and with the current Minister of Tourism, among others.

Richard Alexander: For example, the recent GST/HST Holiday wasn’t an issue we reacted to; it was an issue we drove for the industry. With CEBA (Canada Emergency Business Account), we were reacting to policy, but with this initiative, we were at the forefront. Organizations often fall into the trap of only reacting to what the government does. Instead, we’ve taken the approach of identifying something we can improve, even if no one else is talking about it yet. We are asking, “What has potential, and how can we drive it forward?”

MM: Where did the idea for the GST/HST Holiday come from?

KH: The tax holiday was not a Restaurants Canada idea. We had been doing campaigns around affordability and how it has been impacting our industry. So again, the drop in traffic attributed to less discretionary consumer spending power. One of the campaigns we ran was about the EI payroll taxes, called “Lift the Strain on Small Business.” It wasn’t just about payroll tax; it was about the bigger and broader idea that cutting payroll taxes will help employees have more money in their pocket—in all sectors. Everyone is feeling the paycheque pinch and has little money left over to pursue a little pleasure or self-care, and this makes voters less happy in their day-to-day life.

Strategically, we stay informed about government priorities and look for opportunities to align them with the interests of our industry. Affordability is a prime example of a shared priority that resonated with both the government and the foodservice sector. We did public polling around affordability, and it came up as one of the top issues for the public, though not necessarily for every segment in our industry. It was, though, one of the top reasons cited as to why people were not going to restaurants.

RA: It’s a big part of the reason Premier Doug Ford handed out $200 cheques. Overall, we’ve mobilized our whole team to tackle the cost burden in our industry, tying it directly to affordability. This is what government is deeply concerned about. We’ve mounted four campaigns and are actively pushing the issue, to ensure it stays on the agenda. We’re not going away, and that persistence is helping us gain ground.

KH: If you take a bird’s eye view of what the industry has been through over the last five years, operators have seen their bottom line just decimated. If I think about what my P&Ls looked like five years ago as an operator compared with what they looked like two years ago as I was leaving, it’s painful. The two years since then have been even worse.

As operators, we can be very reactive. If my labour cost is too high, I might cut staff instead of thinking long-term and looking at volume to really understand the flow of business in order to properly schedule my team. Because it has been such a rat race and hamster wheel for our industry, it is very difficult to get out of that reactive mode. Operators have to pay bills, schedule staff, and place orders to get through the next day. When you’re just breaking even, you don’t have the luxury of waiting two months to see the benefit of a GST cut. This is the effect of what they’ve been through over the past five years.

RA: When I speak with operators, it’s not always clear to them how a tax cut will increase demand. Some say, “Okay, I think this is something, but it’s just 15 per cent.” Maybe the economics of demand elasticity doesn’t resonate with them, but a cheque for six or seven thousand dollars would. The value can sometimes be tough to see in the abstract, particularly when morale is so low in the industry.

They’re looking for a silver bullet to fix all of the problems, like hitting a baseball and trying to get to home plate. I explain it conversationally as, “We hit the baseball, and we got to second base. That’s pretty good—that’s $1.5 billion—and now we’re going to try and steal third and get to home.” That resonates.

KH: When we looked at our recent member surveys—which are so important—three strategic priorities emerged from our members’ feedback: cost relief and foot traffic—top line and bottom line, workforce and access to labour, and sustainability.

There is no silver bullet to fix the cratering of the bottom line that operators have experienced over the last five years. It’s not reality. So, our team designed a strategy focused on delivering progress on multiple margin-building fronts for restaurants. It’s going to be wholesale liquor pricing for restaurants, a little bit off WSIB rates, health claims and other insurance areas, a little bit off payroll taxes, and supporting efforts that put more discretionary income in consumers’ pockets that they can spend in our restaurants. It’s a little bit here, there, and everywhere to try and shave off a few percentage points on each line of that income statement to bring a little more down to the bottom line.

MM: So, you’re shaking many trees to optimize the total harvest, rather than making a few big asks…?

KH: Yes.

MM:  In spite of the progress that has been made to date, the sector is still suffering. What are you saying to operators who are having really tough times?

KH: Acknowledging that we understand where the challenges are and letting our members know they are not alone are top priorities in the conversations we’re having. When we put out tough information like our bankruptcy report, the Quarterly Canadian Restaurant Intelligence Report, or trend reports, we know we’re often bringing bad news to the fore, but even difficult information can provide useful and important perspective.  

When we started noticing the drop in foot traffic early last summer when the patio season returns were not as strong as they should have been, we got on the phone to verify and find out what operators were experiencing in different regions. B.C., for example, has the highest household debt and, because of the big mortgages out there and the rising interest rates, those operators were first to feel the dip. We were able to watch the trend creep across the country as discretionary spending dwindled. This validated our expectation that high levels of household debt strongly correlate with a decline in foot traffic.

Being able to show the industry some of these trends, backed by our data, helped because it showed operators the decline in business was not their fault. Of course, that doesn’t help pay the bills, but it shows people they’re not alone. Knowing the ‘why’ has also immeasurably helped us have those critical advocacy conversations. We provide our quarterly reports to government representatives nationwide, offering them a data-driven understanding of the industry’s performance in the current economy, which can help strengthen and ideally expedite our advocacy efforts.

KH: We also created our Restaurant Impact Report to make sure every level of government had an accurate picture of the size, scope and importance of our industry and our overall contribution to the local, provincial and national economy and culture. We’ve been able to make the connection that restaurants are an early indicator of Canada’s national economic health and demonstrate to elected officials that their constituents are feeling the pinch. They have less money in their pocket. They’re not able to go out for dinner or stop for a sandwich on their way to work. We’ve made it clear that the trickle-down effect of declining spending in restaurants is going to impact the GDP and the success of elected officials at all levels of government. That’s been an effective message for Restaurants Canada.

MM: So, you’re using the role of restaurants as early economic indicators to pull the relief lever and attach it to government priorities or performance to bolster the effectiveness of your advocacy tactics…?

KH: Yes, and because there were so many conversations around affordability, government has become so much more aware of how vulnerable our industry is to debt and bankruptcy as direct results of decreases in discretionary consumer spending power. If you’ve got 53 per cent of operators operating at a loss or barely breaking even, we start to see the affordability issue expand. As a sector, restaurants impact every community across the country. It’s not like other industries, where sector performance has a more contained, localized effect. We have a presence and direct impact on communities and infrastructure. We’re the fourth-largest private sector employer in Canada, so when restaurants fail, there is exponential job loss, which directly affects the local and national economies. Making that connection has demonstrably changed the quality and effectiveness of the conversations we’re having on behalf
of the industry.

RA: The government knows it’s vulnerable on affordability because of all the cost increases and inflation. They wanted to do something, so we proposed the payroll tax relief. The PMO jumped on it. They loved it, but they weren’t the division of government to drive it forward, so they included our industry in the GST/HST tax holiday. They didn’t have to, and they weren’t initially going to.

Because we had those champions in place and the conversations we’ve had and the campaigns around affordability we’ve produced, they understood how our industry’s inclusion helped them deliver.

KH: We’re top of mind right now, and we need to maintain that. Before the holidays, we were in Ottawa for a long string of meetings capped off with an evening event. We were tired, but we knew we had to show up and connect. It’s about always being present.

RA: We make ourselves available, which keeps our industry front and centre all the time.

MM: Do you feel that presence has changed the effectiveness of Restaurants Canada’s advocacy efforts over the past two years?

KH: In the past, some key relationships were fractured. During the pandemic, things got incredibly intense, and understandably so. I don’t hold anyone in this building responsible for that. It was a very difficult time.

There had also been a fair amount of turnover at Restaurants Canada, which made it hard to build long-standing, consistent relationships. Having a level of stability within a national advocacy association is really important. All of the relationships are important and need to be developed, from the Ministers to their staffers, policy advisors, and teams. Making sure we have stability is really important to me. We are continuing to invest in all of those relationships.

We are national, and unlike many other associations, we are provincially focused as well. Over the last year, we have developed great relationships at Queen’s Park. If there is a change in government, we know there will be a movement of many of those staffers to Ottawa. Making sure we treat those relationships and those people with respect is so important. We’ve been told a number of times that we’re known for our “respectful” advocacy. If we’re going to respond to a policy proposal or decision in the press, we always give them a heads-up, and we only resort to a higher frequency when government has given us no choice. We also let them know when we’re going to move with the times and change direction to better serve our members.

Initially, we were having conversations about the carbon tax behind closed doors, but we got to the point where we needed to bring that discussion into the open. We knew they were vulnerable, but we had no choice. When you maintain open lines of communication, it’s much easier to preserve relationships.

MM: With such a large and diverse industry under Restaurants Canada’s umbrella, how do you engage operators to take part in advocacy efforts, and what impact can collective action have on advancing your policy goals?

KH: We have 1.2 million employees and 100,000 brick-and-mortar restaurants across the country. When we harness the power of our representation to send letters to government, they have to respond.

There isn’t an operator in this country who isn’t saying their labour costs are killing them. The ask may only be for a few percentage points of relief, but we’re a labour-intensive industry, so that really matters. Those points are huge in aggregate. It only takes two minutes to hit send to add your voice to this
issue, yet we only received 700 letters after begging for weeks. If we ask operators to do this, it’s because we see a significant opportunity to advance our case. The power of those letters is immense. When you hit send on a campaign page on restaurantscanada.org, your letter is instantly delivered to a Minister, Premier, or Prime Minister’s inbox and your local MP’s inbox. If your local MP got 5,000 letters, you’d see action. Staffers will identify the influx of letters as a trend and brief their officials, who will put pressure on the Minister.

This is impactful, and we are very strategic. We don’t overuse or abuse this power to ensure that when we do use it, it spurs action.

RA: Things have been very tough over the past five years, and the frustration is palpable. Sometimes though, we tear each other down on public platforms. I understand that people are under enormous pressure, but we need to stay united and respond to incremental industry wins with grace to continue to move the conversation forward with government.

When segments from other sectors like EV batteries earn investment from government, you’ll notice that the rest of the manufacturing sector does not publicly tear down the announcement, because it’s understood that “a rising tide lifts all boats.” The proven strategy is for that industry to respond with positivity, knowing that a win for part of that industry is still progress, and is not the end of the conversation and ongoing push for further commitments that benefit the broader industry.

We do want to hear these candid opinions and observations from operators directly, and the best place to share that is by responding to our surveys. Of course, members are also always welcome to give us a call
or meet us face to face in their region. These first-person perspectives enrich and personalize our discussions with government and make our advocacy work more effective.

Quantifying the experience, needs and performance of our industry has been a significant effort we need everyone to participate in. Look how many individual restaurants we have in this country… If we could mobilize this industry and advocate together, we could move mountains.

RESTAURANTS CANADA’S ADVOCACY STRATEGY

Set the Agenda: Restaurants Canada has shifted from reacting to government policies to proactively helping shape the conversation.

Result: Rather than waiting and hoping the foodservice industry is recognized and included in government policy and investment, Restaurants Canada is working alongside policy makers to drive informed solutions.

Nurture Connections: Advocacy focuses on policies, but it’s ultimately about people. By forging deep, strategic relationships with local, provincial and federal champions and their team members, Restaurants Canada is positioning itself as an indispensable voice for an industry that touches every corner of the economy and Canadian life.

Result: Stronger ties, greater influence and a more respected voice at the table.

Think Like an Economist: Sweeping reforms are rare, but by embracing a pragmatic, multi-pronged approach—cutting payroll taxes here, lowering liquor costs there—the association can chip away at systemic costs and legislative burdens in a smart, fair and realistic way.

Result: A steady march toward relief that resonates on operators’ balance sheets.