TORONTO, 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.

6 comments

6 responses to “Survey shows Ontario minimum wage hike will force 81% of restaurateurs to cut jobs”

  1. Thana Mills says:

    We have a Produce market and also have a cooler with prepared fruit and salads and sandwiches. We also work on a 3.4% margin . Needless to say staff will be cut and prices will go up . Fruit and vegetables are an important ingredient in fruit is prep . I’m sure we are not the only market facing this. Many restaurants shop from us . Food costs go up so menu prices go up.

  2. Alan Mckell says:

    Can we stop talking about the 15 dollar increase, that’s what they want everybody to talk about. It’s all the other cost that will put us under. Sick days payroll taxes and all the other 30 items in the bill that they want. So the min wage makes them look like Robin Hood saving the people they don’t care about that one issue. Look at all the changes from unions being a

  3. John Smyth says:

    This is a two edged sword. For those who make minimum wage, it seems like a wind fall. However, given that the general cost of goods and services will need to rise to cover the increased expenditure on wages, I fail to see how anyone is going to get ahead.
    the second part is this; for those who earn above the minimum wage, they will in all likely hood not receive any increase in pay hence, they will have less disposable income as a result. Given the number of increases in the minimum wage over the years has anyone looked at whether or not such an increase has actually benefited the intended recipient or merely increased the taxes paid to the government. I realize this sounds cynical but it seems quite realistic to me. Just my two cents

  4. Is there a way to combine a training grant so restaurants get some subsidy on wages? Students and grads need work experience and foodservice is a great training ground for many professions in food (food handling, health & safety, not to mention all the soft skills gained). The wider Food Industry is struggling to attract young people to professions while the restaurant industry is suffering with potential job loses. The government is offering millions of $$$ in training, why shouldn’t restaurants get a piece? FoodGrads would be happy to support any initiative that enables students and grads to gain more relevant work experience so they are well prepared to join the workforce.

  5. Jack Valianes says:

    If they want to raise the minimum wage of kitchen staff and bussers I can see that but most servers make anywhere from $50 to &400 per shift per night. They should not get a raise.

  6. Paul says:

    Great comments. Unfortunately, the Ontario Government (Liberals) chose not to consider the importance of the foodservice industry as the ‘first employer’ of many who enter the economy. There is an important training benefit that may be lost in the re-engineering of labour cost allocations in many business models. Longer-term employees will get the Min Wage adjustment, but nothing more in terms of a salary increase, whereas part time and first time jobs will be cut or reduced, based on what we’re hearing. There is where ‘Policy’ and ‘Politics’ don’t meet or match the realities of the marketplace. The Government may be hurting the people they are trying to help.

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