Manitoba’s budget: No help for restaurant and foodservice operators
FOR IMMEDIATE RELEASE
April 12, 2011
WINNIPEG – A lacklustre budget was further tarnished by the decision to raise the minimum wage for the seventh time in six years – an especially important issue for the restaurant industry, where 30 cents of every dollar goes directly to labour costs.
“Unfortunately the government is pursuing a policy of wage inflation, not job creation,” said Dwayne Marling, Manitoba-Saskatchewan Vice President for the Canadian Restaurant and Foodservices Association (CRFA). “This latest increase will hurt the very people it is meant to help. If the government really wanted to address poverty they would significantly raise the basic personal tax exemption, not the minimum wage.”
Last year’s 50-cent minimum wage hike, which took effect Oct. 1, cost Manitoba’s restaurant operators an estimated $16 million – or $7,000 per restaurant – in increased labour costs. The hike was six times the rate of inflation (+0.9%). Given this gap, another increase is clearly unnecessary.
“The province holds up the elimination of the Small Business Tax as the solution to every business owner’s challenges,” said Marling. “But this is only helpful when businesses are actually making money. Restaurants always work on tight margins, but in today’s economic climate many are struggling with profitability.”
Manitoba’s $1.7-billion restaurant and foodservice industry is one of the largest employers in the province. More than 41,000 people are directly employed in foodservice, making it one of the top five private sector employers in Manitoba. 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 $60-billion foodservice industry employs more than one million people in communities across the country.
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