"It will have a real impact on our employers in areas where they are struggling to find staff. It's creating a great deal of uncertainty," said Joyce Reynolds, executive vice-president of government affairs for Restaurants Canada. "We're already hearing from members saying they don't know how they're going to be able to keep their restaurants open in certain locales."
"I anticipate that unfortunately, we will see some restaurants close."
On Thursday, federal Employment Minister Jason Kenney announced the moratorium, saying that "serious concerns" remain following a government investigation of the allegations raised about the program.
The moratorium will remain in effect until his department completes its review, he said.
'Very serious impact on many employers'
On Friday, Kenney said the moratorium would have a "very serious impact on many employers.
"And quite frankly some [employers] have done their level best to follow the rules and have not been able to find Canadians," he said. "That's regrettable but I think it's necessary. I think it's necessary to send a message that we mean what we say about the obligation actively to search for Canadians first."
The announcement follows a series of stories produced by the CBC's Go Public about how some McDonald's franchisees were allegedly abusing the Temporary Foreign Workers program.
Dan Kelly, president and CEO of the Canadian Federation of Independent Business, said he was "deeply disappointed" with the government's decision, saying it was a "trial and conviction by media example."
"I have thousands and thousands of quick service restaurants, restaurants of all types that were using the program as it was intended. where they could not find a qualified Canadian to do the job, had gone through all of the paperwork, all of the process, all of the costs and delays and will now lose that opportunity as a result of some negative stories," he said.
"In large urban settings in general service restaurants, I think some of them can muddle through with consequences," Kelly said. "But in small communities, in resource communities, in resort areas, I am absolutely positive if the moratorium lasts, if it goes into months, there will be business closures as a result of this."
"And take some Canadian jobs with them," he added.
Kelly cited the example of an Indian restaurant owner in Toronto who needs cooks, but is unable to find any qualified Canadians.
"He's willing to train. He pays 40 grand a year so these are not minimum wage positions. And he cannot find a single qualified person to prepare the food he specializes in."
The owner already has four temporary workers whose permits are set to expire next year, Kelly said, and he fears if he is unable to replace them with other foreign workers, he will likely close.
Reynolds said she is concerned that the moratorium will force Canada to go back to the days of the mid-2000s, when consumers in Alberta, for example, were faced with signs saying restaurants closed due to lack of staff.
"We had situations where parts of restaurants were being shut down, hours of operation were being curtailed, expansion plans were being put on hold," she said. "We definitely think this [moratorium] was too broad a stroke."
In places like northern Alberta and northern Saskatchewan, restaurant owners face labour challenges and must compete against resource-based jobs paying high wages.
"People are not coming out to those locations to look for jobs and there's just nobody locally there to do those jobs," Reynolds said. "And those that are there locally get immediately scooped up by the resource-based companies, which have much higher profit margins and can lure them away with $30-an-hour jobs."
Difficult to find cooks, kitchen helpers
Meanwhile, in other pocket of regions across the country, restaurant owners are finding it difficult to find cooks and kitchen helpers, she said.
Kelly said that people are unwilling to move their families across Canada to go and work in a small Alberta or Saskatchewan town just to work in a pizza place.
As well, there just aren't enough young people to fill these jobs, he said, and with a higher percentage of youth with post-secondary education, many are looking for higher paying jobs or work in their field.
"People in their 40s and 50s are of the belief that the world hasn't changed," he said.
Reynolds added that many restaurants have moved to 24-hour, seven-day-a-week operations, and the need to fill shifts has expanded. But most operators have codes of practices, Reynolds said, and won't put teenagers on those shifts.