Ontario delivers mixed message on payroll costs

TORONTO, March 25 /CNW/ - Today's provincial budget allows government to control its own payroll costs, but forces restaurant owners to swallow a huge increase in minimum wage during a tough economy.

The eight per cent increase to the minimum wage in today's budget will cost Ontario restaurant operators an estimated $255 million. Payroll accounts for one third of a restaurant's expenses - second only to food and beverage.

"The government recognized the need to take significant steps to control expenses by freezing their payroll costs to protect public services, but denies restaurant operators the ability to do the same to protect their businesses," says Stephanie Jones, Vice President Ontario for the Canadian Restaurant and Foodservices Association (CRFA). "As in government, payroll is a major spending line in our industry, but restaurants have been mandated to increase their payroll costs by eight per cent."

With the second-lowest profit margins in the country, Ontario restaurant operators already pay amongst the highest minimum wages to employees - including students and employees earning gratuities. "With inflation in Ontario rising only 0.4% in 2009, all Ontario employers need the flexibility to control their costs," says Jones. "This is not a privilege for government alone."

For Ontario restaurants, the benefits in the budget will be stripped away by the minimum wage increase.

Ontario's $23-billion restaurant industry is one of the largest employers in the province. With over 32,500 establishments, Ontario's restaurant industry is uniquely positioned to contribute to the economic recovery of every community in the province.

"We want to see Open Ontario recognize this opportunity and work with the restaurant industry in 2010," says Jones.

CRFA is one of Canada's largest business associations, with 33,000 members representing independent and chain restaurants, bars, caterers, institutions and other foodservice providers. Canada's $60-billion foodservice industry employs more than one million people in communities across the country.

For further information: Stephanie Jones, [phone] (cell) or [email protected]; Prasanthi Vasanthakumar, CRFA Communications, [phone] or [email protected]