Wynne’s team stuck us with a $1.8B tab

While most Ontarians rang in 2018 with hope and optimism, small businesses are scrambling to keep the lights on. Ontario restaurants have to pay the highest rents in the country; skyrocketing hydro rates; relentless liquor mark-ups; and the costs of inter-provincial trade barriers that make no sense. We believe it’s time to have an honest conversation.

In this election year, the Wynne government has delivered a clear message to Main Streets across Ontario with Bill 148, which has now dramatically raised the minimum wage while imposing a myriad of costly new regulations on Ontario’s employers.

That message: Small businesses will pay for the Wynne government’s social agenda. Now the government is vilifying business owners by announcing the creation of a “hotline” to report on employers and that it’s adding 175 new enforcement officers to police small businesses throughout the province. This comes on top of tough talk from the minister of labour, who issued a stern warning that business owners should not contravene the “spirit of the legislation.”

Ontario business owners are hurting. Each day we are contacted by restaurateurs wondering how they will survive with these new increased costs. While the Wynne government promotes its public narrative that pits owners against employees, the real debate should focus on why the Wynne government has so wilfully enacted legislation that will cost tens of thousands of jobs and hurt the same people they so desperately want to help. The increase in minimum wage will be meaningless to an employee if his or her employer ends up having to close its doors after facing a mountain of new costs. This is simply too much pain, inflicted too fast.

Restaurants Canada communicated these challenges countless times to the government over the past seven months. We shared our insights and member research data; that included a survey showing that 95 per cent of our members indicated they would have to make serious choices for their operation by finding ways to control costs, and a further 26 per cent suggested that they will be forced to close their doors altogether.

We also shared key insights from numerous other sources including the TD Bank, Fraser Institute, C.D. Howe Institute and the Canadian Centre for Economic Analysis, with each one forecasting that the government’s new raft of labour costs would bring job losses in the tens of thousands. Bank of Canada researchers recently released a study that not only outlined potential job losses, but the overall inflationary impact and reductions in GDP.

The Wynne government stubbornly ignored business owners, including the foodservice sector on this critical issue. Ontario restaurateurs operate with razor-thin margins, on average just 3.4 per cent, which is the lowest in Canada. These cost increases will push many restaurateurs to the brink. The 21-per-cent increase in the minimum wage (with another hike due next year) is just a portion of the costs related to Bill 148. Wage-related adjustments are roughly 58 per cent of the total costs, but another 42 per cent come from the various other regulatory changes.

All totalled, this equates to $1.8 billion in new costs for Ontario’s foodservice industry. And it’s not just restaurants: The entire value chain of growers, wholesalers, transportation and logistics firms, and everyone within the supply chain is being hammered with the same increased costs. All of those added expenses end up in the lap of the restaurateur, who is then left with few choices: cut services or raise prices, or a combination of both.

With a provincial budget coming soon, there is a small window for the government to show some of the fairness that the premier speaks so frequently and passionately about — the fairness of helping small businesses across Ontario survive and help their employees keep their jobs.