Minimum wage math doesn't add up

TORONTO, May 15, 2014 /CNW/ - The NDP's policy to counter a 9.1 per cent minimum wage increase with a 1.5 per cent cut to the small business tax doesn't add up for the province's largest employer of youth and first time employees.

"The NDP claims that the cut to the small business tax will counteract the added labour cost," said James Rilett, Ontario Vice President of Restaurants Canada, an industry association representing foodservice owners and operators.  "The reality is that it doesn't even come close."

The cascading effect of a $1 per hour increase to minimum wage will cause the average restaurant's labour cost to increase by $11, 700 per year.  The net effect of a 1.5 per cent cut to the small business tax is a savings of $262, for a net cost to a small business of $11, 525.

"It is impossible for a small business to make up for these additional costs without raising prices or cutting back hours," said Rilett.

Quick Facts:

• 22 per cent of Canadians had their first job in the restaurant business—highest of any industry
• 1 in 5 young people between the ages of 15 and 24 are employed in the restaurant industry
• Ontario youth unemployment rate ranges between 16 and 17.1 per cent, among the worst in the country
• Labour accounts for 30 per cent of a restaurant's expenses.

Restaurants Canada (formerly the Canadian Restaurant and Foodservices Association) is a national association comprising 30,000 businesses in every segment of the foodservice industry, including restaurants, bars, caterers, institutions and their suppliers. Through advocacy, research, and member programs and services, Restaurants Canada is dedicated to helping its members in every community grow and prosper.

Canada's restaurant industry directly employs more than 1.1 million Canadians, contributes $68 billion a year to the Canadian economy, and serves more than 18 million customers every day.

SOURCE: Restaurants Canada

Media Contact:
James Rilett, Vice President, Ontario, 416-649-4241 or [email protected]
Mary Gazze, Communications Specialist, 416-649-4226 or [email protected]