Alberta restaurants fear more closures and job cuts with recent wage hike

CALGARY - Alberta's restaurateurs don't know how they will survive another major labour cost increase in the midst of a recession where sales continue to decline. This is the message Restaurants Canada has been hearing from its members since the government announced in June that it would significantly raise the minimum wage and remove the liquor server wage on Oct.1, 2016.

Also read, Restaurant tips reward server but not cook, Guelph research shows.

"Since the October 2015 minimum wage increase, many small restaurant businesses have closed their doors," said Mark von Schellwitz, Restaurants Canada's Vice President Western Canada. "Members fear the worst business closures and job losses are yet to come as they have no more room to raise prices in a declining sales environment."

Alberta's minimum wage has increased by one dollar to $12.20 an hour, and $1.50 for liquor servers, with the elimination of the liquor server wage. When you factor in tips, liquor servers typically earn more than $30 an hour (according to University of Guelph research) -- which means a much greater loss in income when hours are cut.

Restaurants Canada hosted a member forum on Sept. 22 to look at ways operators could cope with these unprecedented minimum wage increases. Members are considering reducing labour, and balancing compensation between higher-paid front-of-house service staff and back-of-house kitchen staff who don't earn gratuities through new service charge or self-service options.

"Our members are worried that that the government keeps piling on extra costs, forcing many of them to work seven days a week, on the floor and in the kitchen, to reduce staff hours to keep their businesses viable," said von Schellwitz. "Premier Notley's plan to raise the minimum wage faster than any other North American jurisdiction is only hurting the very people she is trying to help. For the Albertans who lost their jobs in the past year, their minimum wage is zero. Thousands more industry employees are also taking home less money, because their hours have been cut as operators try to control escalating labour costs."

Alberta's restaurant industry directly employs more than 150,000 Albertans, representing nearly 7% of the province's work force.

Source Restaurants Canada