The COVID fee: Why many services could cost you more as Toronto reopens for business

Now that many Toronto shops and malls are reopening this week, you might be eager to finally get to your neighbourhood hair salon.

But that long-awaited haircut might cost you more than before the novel coronavirus pandemic began.

Call it the COVID fee — the surcharge some Toronto businesses are tacking on as they open their doors to customers again.

"There are instances when it can be appropriate," said Lisa Kramer, a professor of finance at the University of Toronto.

Kramer says some businesses are facing increased costs to operate during the pandemic, and they need to find a way to cover the additional expenses.

"They might be needed to disinfect surfaces much more frequently than normal," Kramer told CBC Toronto.

"That requires extra hours on the part of the employees to carry out those duties. The businesses might be paying higher salaries temporarily to their employees to offset the increased risks that they're facing."

Ryan Mallough, the Ontario director for the Canadian Federation of Independent Business, says he's hearing a fair bit about surcharges from his membership in both Ontario and across Canada.

Paul Borkwood/CBC News
Paul Borkwood/CBC News

"It's really a reflection of the new business reality," he said.

"A lot of these businesses are facing new costs when it comes to equipment, be it ensuring that there's hand sanitizer on-site, providing masks for employees, or in some cases, sourcing Plexiglas shields," Mallough added.

"These costs are coming down at a time when businesses can't afford them."

One Toronto dentist's office says in an email that it has "no choice but to institute a $10 charge per visit, which will only partially offset the increased cost of the new safety measures."

Some of those measures include,sneeze shields at the reception desk, additional disinfection processes, and face shields and gowns worn by staff for all procedures, Simcoe Dental Group states.

"In fact, we have gone beyond the recommendations set forth by the Royal College of Dental Surgeons," the email reads.

Evan Mitsui/CBC
Evan Mitsui/CBC

"We have sealed off each of the operatories to better contain any aerosols generated, and are procuring N95 masks and new air filtration systems in order to ensure that we are doing all we can to make your appointment with us a safe and reassuring experience."

Passing the cost to consumers is a difficult decision for a business owner to make, Mallough.says.

"As much as business owners are in a pinch, they do understand that their customers are in that same sort of situation," he said.

"A lot of people are out of work or on the [Canada Emergency Response Benefit] ... or have seen their hours reduced."

Still, he argues, businesses don't have much of a choice.

"The hope is that it's not going to be too long and that [when] business revenues get back to a healthier place they'll be able to take on that cost," Mallough said. "But certainly, initially, we had heard from a significant contingent of our membership that the cost is a barrier and they are looking for ways to pass it."

A Toronto hair salon, Urban Philosophy Men's Grooming, is also adding a COVID-19 surcharge, although in an email to customers it doesn't say how much the surcharge is, or if it is temporary.

But the email does cite additional measures the business is taking to reopen safely during the pandemic.

Kramer, the U of T finance professor, says it's important for businesses to tell customers why the extra fees are needed and that they will be removed once the pandemic is over.

"It's reasonable, I think, to feel some skepticism," Kramer said.

"There have been instances in the past when companies have introduced a fuel surcharge when gas prices skyrocketed. And then when the prices came back down, suddenly those were just relabelled and the customers were still paying the fee — they were just called something different."