NEWS HIGHLIGHT
Ontario delivers mixed message on payroll cuts
Last week’s provincial budget
allows government to control its own payroll costs, but forces restaurant
owners to swallow a huge increase in minimum wage during a tough economy, says
the Canadian Restaurant and Foodservices Association (CRFA).
March 29, 2010 – Last week’s provincial budget
allows government to control its own payroll costs, but forces restaurant
owners to swallow a huge increase in minimum wage during a tough economy, says
the Canadian Restaurant and Foodservices Association (CRFA).
The eight per cent increase to the minimum
wage in the budget will cost Ontario
restaurant operators an estimated $255 million. Payroll accounts for one
third of a restaurant’s expenses – second only to food and beverage.
“The government recognized the need to take
significant steps to control expenses by freezing their payroll costs to
protect public services, but denies restaurant operators the ability to do the
same to protect their businesses,” says Stephanie Jones, vice president Ontario
for the CRFA. “As in government, payroll is a major spending line in our
industry, but restaurants have been mandated to increase their payroll costs by
eight per cent.”
With the second lowest profit margins in
the country, Ontario
restaurant operators already pay amongst the highest minimum wages to employees
– including students and employees earning gratuities. “With inflation in
Ontario rising only 0.4 per cent in 2009, all Ontario employers need the
flexibility to control their costs,” says Jones. “This is not a privilege
for government alone.”
For Ontario
restaurants, the benefits in the budget will be stripped away by the minimum
wage increase.
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