Government tax coffers get richer, restaurants foot the bill

REGINA, Oct. 3, 2012 /CNW/ - Saskatchewan's decision to raise the minimum wage for the fifth time in five years is a major disappointment for the province's restaurateurs.

"Unfortunately, government made this announcement without any meaningful consultation with the business sectors most impacted by its decision," said Dwayne Marling, Manitoba-Saskatchewan Vice President for the Canadian Restaurant and Foodservices Association (CRFA). "Imposing a 50-cent-per-hour minimum wage hike, effective Dec.1, will cost Saskatchewan's 2,000 restaurant operators approximately $14 million. Government, on the other hand, will collect 15 per cent more in income tax from the average minimum wage earner."

Government has admitted these changes in minimum wage will exceed Saskatchewan's inflation rate by more than 2.5 times. As it is, restaurants struggle with tight margins, with 30 cents of every dollar already going directly to labour costs.

Further, this announcement ignores CRFA's calls for wage differentials in the event of a minimum wage hike. Differentials help alleviate the cost burden of a wage increase, by recognizing the significant income earned by wait-staff in licensed restaurants and the costs of training inexperienced workers.

"Does the government expect restaurant operators working on already tight margins to simply absorb yet another cost increase?" asked Marling. "Do they want menu price increases to drive provincial inflation rates even higher? Or do they want restaurateurs to cut employee hours?"

Saskatchewan's $1.9-billion restaurant and foodservice industry is one of the largest employers in the province. More than 32,600 people are directly employed in foodservice, making it one of the top four private-sector employers in Saskatchewan. More than half of these employees are young people under the age of 25.

CRFA is one of Canada's largest business associations, with more than 30,000 members representing restaurants, bars, caterers, institutions and other foodservice providers. Canada's $63-billion restaurant industry employs more than 1.1 million people in communities across the country.

SOURCE: Canadian Restaurant and Foodservices Association

Dwayne Marling, 204-688-8557 or [email protected]; Prasanthi Vasanthakumar, 1-800-387-5649, ext. 4254 or [email protected].