Survey shows Ontario minimum wage hike will force 81% of restaurateurs to cut jobs

Published July 20, 2017

Ontario’s restaurant owners have crunched the numbers on the government’s planned minimum wage increases, and the results aren’t pretty. According to a recent Restaurants Canada survey, 95% of restaurateurs believe that raising the minimum wage to $15 an hour – a 32% hike in just 18 months – would hurt the very people we are trying to help.

To keep their businesses afloat, operators plan to take the following actions:

  • 98% will raise menu prices;
  • 97% will reduce labour hours;
  • 81% will lay off staff;
  • 74% will explore labour-saving technology such as self-service touch screens; and
  • 26% are likely to close one or more of their locations.

“The survey results are not surprising, given the average pre-tax profit margin for a restaurant operator is just 3.4%,” says Restaurants Canada’s Vice President Central Canada James Rilett. “The government’s drastic minimum wage hikes will reduce profitability by 5 to 7 points – forcing restaurateurs to lay off staff, reduce employment or close their doors entirely. Many of our members just don’t know how to cope with an increase of this magnitude.”

“Raise the minimum wage, but at least do an economic study to justify the amount and speed of the increase,” said Shanna Munro, Restaurants Canada’s President and CEO. “Too much, too fast is not a recipe for success.”

Rilett will present these findings in more detail at the Ontario minimum wage hearing in Hamilton today.

* Restaurants Canada’s survey was conducted in June and July. Results are based on nearly 800 respondents, representing 4,170 locations across the province.

 

Restaurants Canada is a growing community of 30,000 foodservice businesses, including restaurants, bars, caterers, institutions and suppliers. We connect our members from coast to coast, through services, research and advocacy for a strong and vibrant restaurant industry. Ontario’s $32-billion restaurant industry directly employs nearly 473,000 Ontarians, representing almost 7% of the province’s workforce.

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