Family Day will cost Ontario

Family Day won’t benefit the families that own and operate Ontario’s
22,000 restaurants, according to the Canadian Restaurant and
Foodservice Association. The new statutory holiday will cost these small businesses an additional $37 million a year in higher payroll costs.

Family Day won’t benefit the families that own and operate Ontario’s 22,000 restaurants, according to the Canadian Restaurant and Foodservice Association. The new statutory holiday will cost these small businesses an additional $37 million a year in higher payroll costs, according to a release issued following the provincial election. Premier Dalton McGuinty, elected to a second term, promised the new statutory holiday as part of his party’s campaign.

 “Contrary to speculation in the media that the new holiday will generate more business for restaurants, the reality is that sales would have to more than double on Feb. 18 to make up for the 200 per cent increase in wages that day,” the CRFA states.

Full-time and part-time employees must be paid their regular pay plus 150 per cent if they work on Feb. 18, which means a $10/hour wage jumps to $25/hour that day. Employees who don’t work on Feb. 18 will receive their regular pay.

“Many restaurants will be better off closing their doors on Feb. 18, but whether they open or close, it is a money-losing proposition,” says Elaine Flis, vice-president for Ontario with the CRFA. The average pre-tax profit margin in the restaurant industry is just 2.9 per cent of revenue, leaving little room to absorb higher costs. 

“Statutory holidays are extremely costly for restaurants even when they fall in the busy summer period,” says Flis.  “It will be even worse in February, when many Ontarians are still paying off Christmas bills and happier to stay home than to brave winter conditions for a meal out.”

Restaurant operators are already faced with a mandatory wage increase of 28 per cent over the next three years, following a 17 per cent increase over the last three years.  Many are struggling with a dramatic drop in U.S. tourists and a sluggish Ontario economy. So far in 2007, real sales in the restaurant industry have fallen 0.5 per cent compared to 2006.

“We hope the Ontario government will take a closer look at the real impact of Family Day and work with us to mitigate the impact on entrepreneurial families,” says Flis.