Hospitality Sask. CEO warns that tariffs could be ‘catastrophic’

The Saskatchewan hospitality industry is breathing a small sigh of relief after U.S. President Donald Trump announced a 30-day pause on tariffs on Monday.

Jim Bence, president and CEO of Hospitality Saskatchewan, said hotel and restaurant owners don’t want to get ahead of themselves.

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“(We’re) cautiously optimistic,” said Bence. “We’re no further ahead than we were, other than we do have a small reprieve, but the uncertainty and unknown still hang over us.”

Bence said the industry will still continue to work on having a solid backup plan, just in case the tariffs can’t be avoided.

“I think that it’s really prudent for my membership that they’re moving forward with those plan Bs,” said Bence. “Quite frankly, I think that the plan Bs should probably become the plan As.”

With the threat of tariffs still hanging over Canada, Bence said he’s glad to see the provinces starting meaningful conversations around removing interprovincial trade barriers.

In the hospitality industry, which is still recovering from the COVID-19 pandemic, frustrations around the possibility of tariffs are high.

“In the pandemic, we were the first to get hit, we were hit the hardest and we were the last to recover,” Bence said.

Now that restaurants are getting back on their feet, the industry feels like another major hit could be on the way.

Bence said restaurants would be affected immediately by the tariffs, which would dramatically raise the cost of American imports.

“Most restaurants typically bring in about 30 to 35 percent of their products from the States,” he said. “Any operation that has food services attached to it, is going to see an immediate impact.”

Many restaurants operate on razor-thin margins, Bence explained, which was already going to lead to a difficult year in 2025. If the tariffs are imposed, Bence said the industry is going to feel very serious impacts.

“If they’re to last for any length of time, it could be catastrophic,” said Bence. “There just isn’t the margins… It’s going to mean that operators will either absorb the additional costs.”

He said that could mean reducing portion sizes, reducing the number of seats in a restaurant to cut down on labour costs, or passing the extra expenses on to consumers.

Bence said there is a lot of uncertainty among the restauranteurs he has spoken with.

“Some have said loud and clear that these tariffs could make the challenges of the pandemic look like a cake walk,” he explained.

“For the most part, when the pandemic started there were relief programs in place that assisted operators, mainly the small- and medium-sized.”

Bence said medium-sized restaurants could see expenses rise as much as $3,700 a month under the threatened tariffs.

“If we were to take out the carbon tax, if we were to extend the GST holiday, we would get a little bit closer to breaking even,” Bence said, but he emphasized that many restaurants would likely require federal and provincial support in order to keep operating.