By Nicole Di Tomasso
TORONTO — Foodservice and hospitality businesses across Canada are worried about the minimum-wage hikes scheduled to take effect in 2022 as many are still struggling to operate amid the COVID-19 pandemic. As one of the hardest-hit industries, operators that can’t afford to pay their staff more will risk shutting down in the most desperate of situations.
While a minimum-wage wage increase will help Canadians gain access to the necessities of living, the consequence of raising minimum wage is higher costs to businesses. As a result, businesses need to either reduce costs or increase prices to stay afloat, especially during the winter months.
“Most operators are already paying more than minimum wage today for non-server positions, so the changes to the server wage is the most significant,” says Todd Barclay, president and CEO, Restaurants Canada. “The other issue is timing. It’s one thing to make a change, but it’s another thing to allow some time for the industry to get ready for that change, especially when so many operators have taken on a significant amount of debt in the last 20 months. The fact that these changes are happening so quickly, specifically in January, is frustrating and the fact that our industry, as well as other industries, weren’t included in these discussions is quite frankly inexcusable.”
“Costs are increasing exponentially for operators. Whether it’s the cost of insurance, food, products, cleaning supplies or minimum wage, [they’re] ballooning out of control without the revenue to support it,” says Susie Grynol, president and CEO, Hotel Association of Canada (HAC). “We knew the winter months would be hard with expenses exceeding revenue, which is why we worked so hard on the Tourism and Hospitality Recovery Program. If it passes, it will help to cover some of these losses and prevent sizable business failures.”
Moving forward, industry-leading organizations are asking government to be included in conversations related to minimum-wage increases for the benefit of operators and their employees.
“If the provincial governments across the country are increasing the costs for businesses to operate, such as the minimum-wage hike, our expectation as an industry is that the government will find ways to support us and ensure our survival,” says Barclay. “One of the ways that can happen, in Ontario specifically, is by implementing wholesale liquor pricing which would be similar to most other provinces across Canada.”
Here’s a breakdown of current minimum wages across Canada, as well as confirmed increases for 2022:
- In June 2021, B.C.’s minimum wage increased from $14.60 to $15.20, marking the second-highest minimum wage in the country. The new rate also applies to liquor servers. The minimum wage is expected to increase again in June 2022.
- As of Oct. 1, 2018, Alberta’s minimum wage is $15.
- In October 2021, Saskatchewan’s minimum wage increased from $11.45 to $11.81, marking the second-lowest minimum wage in the country. The rate is expected to be adjusted in October 2022 relative to the Consumer Price Index.
- As of June 1, 2021, Manitoba’s minimum wage currently sits at $11.95, and it’s expected to be adjusted in October 2022 based on the inflation rate.
- Currently, the minimum wage in Ontario is $14.35, however, a bump to $15 will come into effect on Jan. 1, 2022. The new rate will also apply to liquor servers, who currently make $12.55.
- As of May 1, 2021, the minimum wage in Quebec currently sits at $13.50.
- Currently, New Brunswick has the lowest minimum wage at $11.75, however, the rate will increase to $12.75 on Apr. 1, 2022 and then again to $13.75 on Oct. 1, 2022. Restaurants Canada estimates that increasing the minimum wage by $2 over the course of 2022 will add at least $25,000 to the cost of operating a restaurant in New Brunswick. This 17-per-cent increase represents the most significant jump since 1980.
- As of Apr. 1, 2021, Nova Scotia’s minimum wage currently sits at $12.95. The rate is expected to be adjusted in April 2022 relative to the Consumer Price Index.
- As of Oct. 1, 2021, Newfoundland’s minimum wage increased by $0.25 to $12.75. The province’s minimum-wage review is expected in early 2022.
Prince Edward Island
- Effective as of Apr. 1, 2021, P.E.I.’s minimum wage is currently $13, however, the rate will increase to $13.70 on Apr. 1, 2022.
- As of Apr. 1, 2021, Yukon’s minimum wage increased to $15.20. The rate is expected to be adjusted on Apr. 1, 2022 relative to the Consumer Price Index.
- As of Sept. 1, 2021, the NWT’s minimum wage increased from $13.46 to $15.20. The rate will be reviewed again in two years.
- Currently, Nunavut has the highest minimum wage in the country at $16.