Survey: 81% of Toronto restaurants will lay off staff due to $15 minimum wage

Jul 20 2017, 5:02 pm

Ontario is set to raise the minimum wage to $15 (a 32% hike) by 2019 and now a survey conducted by Restaurants Canada helps forecast what that might mean for Toronto restaurants when it comes into effect.

According to survey results, restaurant operators are already considering the following actions to cope with the wage increase:

  • 98% will raise menu prices
  • 97% will reduce labour hours
  • 81% will lay off staff
  • 74% will explore labour-saving technology such as self-service touch screens; and
  • 26% are likely to close one or more of their locations.

“The survey results are not surprising, given the average pre-tax profit margin for a restaurant operator is just 3.4%,” says James Rilett VP of Restaurants Canada. “The government’s drastic minimum wage hikes will reduce profitability by 5 to 7 points – forcing restaurateurs to lay off staff, reduce employment or close their doors entirely. Many of our members just don’t know how to cope with an increase of this magnitude.”

See also

The survey was conducted with nearly 800 respondents from across Ontario in June and July and will be presented in detail by Rilett at the Ontario minimum wage hearing in Hamilton today, July 20.

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