Our proposals for helping the foodservice industry
Any help that the government provides relative to minimum wage increases must focus on the industries and Ontarians who will be most impacted. No industry will be more negatively impacted than restaurants and foodservice, and economic impact analysis indicates that youth and entry-level workers are the most vulnerable to lost hours and jobs.
Restaurants Canada has presented the following proposals to the Ontario government to give restaurants offsets to the minimum wage increase:
Enhance tax deduction for the difference in wages paid to workers ages 15 – 25
Before Premier Wynne’s announcement, minimum wage was scheduled to be $11.50 in 2018. This is the “Expected minimum wage.” Instead, it will be increased to $14.00. This is the “Increased minimum wage.”
We propose that the government allow businesses an enhanced tax deduction for the difference between the “expected minimum wage” and the “increased minimum wage” for all wages paid to employees under the age of 25, earning less than $18 per hour, for a period of five years. This would apply to all Ontario taxes otherwise payable.
Raise the PST exception on meals from $4.00 to $8.00
Currently, customers do not pay PST on restaurant meals under $4.00. This amount was set decades ago and does not account for the increase in the price of a basic restaurant meal.
Prices of basic meals will increase further with a 32% hike in minimum wage over 18 months, making them less affordable for Ontarians, particularly those on fixed incomes.
In the price-sensitive restaurant industry, increased prices impact how often people eat out and how much they spend. Extending the PST exemption will help stabilize sales and preserve youth jobs.
Restaurants Canada is proposing that the Ontario government increase the PST meal tax exemption from $4.00 to $8.00.
This would meet government’s policy objective of putting more money into the pockets of those who are trying to get ahead.
Increase the minimum wage differential for students and liquor servers
The student differential is used as a training wage for students (ages 15 to 18) with little or no work experience. It has historically been used to encourage employers to hire youth for their first job.
A very high entry-level wage will mean employers will only employ experienced staff.
Currently, the student wage is scheduled to increase to $14.10 by Jan. 1, 2019. Restaurants Canada is proposing that increases be held to inflation (approximately $12.10 by Jan. 1, 2019).
Liberal MPPs were interested in how much servers earn in tips. argument for an increased differential for liquor servers. Restaurant records show that servers often earn more than $30 per hour in tips alone, resulting in income well above a “living wage.” The savings in labour cost from a lower minimum wage for liquor servers would be used to pay more to non-tipped employees like cooks and kitchen helpers.
Currently the liquor server wage is scheduled to increase to $13.05 by Jan. 1, 2019. Restaurants Canada is proposing that increases be held to inflation (approximately $10.50).
Reduce the LCBO Licensee Markup
Although the province is the largest buyer of alcohol in the world, licensees aren’t benefiting from that. Many products are priced higher than in other jurisdictions with no wholesale advantage for volume purchase licensees. In fact, they often pay more for alcohol than single-purchase consumers, who have access to consumer discounts.
Premier Wynne has publicly mentioned the 6% markup the LCBO charges licensees when discussing the impact of minimum wage on restaurants.
Restaurants Canada is proposing wholesale pricing of alcohol for licensees.