From the spring 2018 issue of Canadian Restaurant & Foodservice News
By Jeff Dover
Restaurateurs are dealing with increases in many of their expenses, like food and rent, but with significant minimum wage increases in several provinces, labour cost has caused considerable concern given the tight margins in Canada’s restaurant industry.
The table below shows current and planned minimum wage increases by province.
As shown, Ontario and Alberta are both increasing minimum wages significantly in 2018 and will have the greatest minimum wage in Canada, $15 per hour, by October 1, 2018 and January 1, 2019, respectively. These rapid minimum wage increases, especially in Ontario, will be challenging for restaurant operators, whose profit margins are relatively slim and may not be in a competitive position to increase prices to cover the increased labour cost. Several provinces, including Nova Scotia, Saskatchewan and Quebec, as well as Nunavut, increase minimum wage rates by small amounts annually, which is much easier for restaurant operators to absorb than sudden, significant wage increases.
Not all restaurant employees make minimum wage. However, increases in minimum wage, especially significant increases, often result in wage increases for other employees making more than the minimum wage. In Ontario and Alberta, restaurant operators are looking for other ways to increase margins. fsSTRATEGY is working with our clients to conduct operational reviews designed to ensure all costs are controlled and design labour matrices to ensure restaurants remain profitable.
Jeff Dover is a Principal with fsSTRATEGY Inc. fsSTRATEGY is a niche consulting firm specializing in strategy in the hospitality industry with an emphasis on the foodservice sector. For additional information on fsSTRATEGY services, contact us at firstname.lastname@example.org or 416-229-2290.