Ontario workers deserve to earn a fair, living wage. Small business deserves to be profitable enough to pay that fair, living wage.

The provincial government’s recent announcement raising the minimum wage to $15 an hour in the next 18 months garnered headlines like “a good day for the little guy.” We beg to differ. The other “little guys,” hard-working and risk-taking owners of Ontario’s small business community, will have more bad days making ends meet.

A 32-per-cent hike in minimum wage rates will cause many small businesses to go out of business, especially those of us in the labour-intensive restaurant industry. Ontario restaurants have the lowest profit margin in Canada, according to both Statistics Canada and industry association Restaurant Canada.

The average Ontario restaurant owner has only 10 employees with annual revenues around $689,000. Ontario restaurateurs earn the lowest pre-tax profit in Canada, 3.4 per cent or $23,450 per year. This wage hike will cost them $47,000 per year.

Premier Kathleen Wynne compared Ontario business to San Francisco and New York City, and said that “if they can raise their minimum wage to $15, so can we.” Feel-good political rhetoric, but this policy hinders the sector’s ability to create jobs.

Visit your favourite neighbourhood restaurant. Ask the owner. They’ll tell you about the Ontario-only challenges that negate comparisons to major U.S. cities.

Ontario restaurant owners’ costs include beer, wine and liquor that are provincially priced, without wholesale pricing for restaurants. Poultry, eggs and dairy product prices fall under federal supply management pricing. Then factor in increasing hydro costs, minimum wage, property tax, employee health tax, payroll taxes, etc.

The Liberal government talks a good game about supporting small business, welcoming its job creation, without understanding the dynamics of razor-thin operating margins. Most small businesses — and the majority of restaurants in Ontario — go from making a profit one year to losing money the next.

The establishments we started and have managed for a cumulative 60 years have employed thousands of people. Many of our chefs were early in their careers and gained training at our expense, some learning the skills to open or manage their own restaurants. For many Canadians the restaurant industry is their first “foot in the door” in the job market, a large percentage being so-called unskilled, not to mention summer jobs for the young, or flexible work options for others.

We want to attract more people to our industry and be successful enough to pay attractive living wages. Restaurant owners compete in a real-world marketplace for the best and the brightest employees. Therefore, our back-of-the-house kitchen employees are paid above minimum wage at competitive rates to ensure less staff turnover and build a larger workforce of skilled and motivated employees.

Increasing the minimum wage by 32 per cent within 18 months will cause a serious cascading affect. When the minimum wage floor rises, employees who are now paid $15 an hour or more will also want a raise in order to maintain relative compensation.

The Wynne government chose not to undertake an economic impact study, and therefore has little understanding of how many people the minimum wage increase will affect in a positive or negative way, especially when combined with all the other upward cost pressures.

The provincial government mandate impedes our ability to be profitable — and therefore impedes our ability to offer higher wages for our existing employees.

Restaurant industry margins are shrinking and our options have diminished. There are no cost-cutting options, no competitive wholesalers to compete with against government monopolies. Our market will only bear so much — and forcing customers to pay higher menu prices cannot make up cumulative financial losses.

Inevitably, increasing the mandatory minimum wage will, in our opinion, result in job losses in the small business sector, exactly the opposite of the intent of this government policy.

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Premier Wynne has backtracked on her promise to let the consumer price index determine annual minimum wage increases and keep it out of politics. We call on her to work with the industry and find aggressive and creative ways to help small business to stay in business.

Fred Luk is the owner of Fred’s Not Here and Red Tomato restaurants in Toronto, with 25 employees. Francis Wood is owner of Southern Accent restaurant, with 20 employees.

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