Saskatchewan restaurateurs surprised by province’s decision to abandon predictable minimum wage indexation formula with $3 per hour minimum wage increase over next three years

Restaurants Canada calls on the government to reverse the hasty, ill-thought-out decision and consult with the foodservice sector to mitigate the impact of this unprecedented hike

Restaurants Canada and Saskatchewan’s struggling restaurateurs were disheartened by yesterday’s announcement that the Saskatchewan Government will be increasing the provincial minimum wage from $11.81 to $13.00 per hour on October 1, 2022, and to $15 per hour on October 1, 2024 – a 27 per cent increase over the next three years. The decision came without consultation and moves away from the province’s traditional indexation formula, which linked adjustments to Average Hourly Wage to the Consumer Price Index (CPI) for Saskatchewan. The increase removes predictable and sustainable minimum wage increases at a time when Saskatchewan’s hospitality businesses can least afford it as the industry still continues to rebuild after being one of the hardest hit during the COVID-19 pandemic.

For years Restaurants Canada has praised the Saskatchewan government for its approach to increasing the minimum wage by linking increases to CPI and wage inflation which the foodservice sector uses to adjust all wages. Other provinces have even jumped on board to follow Saskatchewan’s approach by adopting similar minimum wage indexation formulas as a reasonable way to predictably adjust minimum wages.

“Yesterday’s minimum wage announcement comes at the worst time for Saskatchewan restaurants. Operators are already struggling to survive, grappling with increased debt from the pandemic, as well as rising costs, and menu inflation pressure, all while trying to bring back price-sensitive guests to recover and rebuild from the pandemic” said Mark von Schellwitz, Vice President Western Canada.

As the province’s third-largest private-sector employer, Saskatchewan’s low-profit margin hospitality industry has still not returned to pre-pandemic sales and employment levels as foodservice still has 6,000 fewer employees compared to the industry pre-pandemic. “Yesterday’s minimum wage announcement will make it even more difficult to hire back employees. It will also result in fewer employment opportunities and less work hours for service staff. The announcement also ignores Restaurants Canada’s “do no harm” recommendation to help restaurants recover” added von Schellwitz.

Most minimum wage earners in the restaurant industry are either new young workers entering the workforce or servers who earn more than double the minimum wage when factoring in gratuities. The announced minimum wage increases, which are several times higher than wage inflation, will simply add labour cost pressure to the entire payroll as restaurants will need to increase relative wages of all employees. Rather than helping to control the inflationary issues plaguing the restaurant sector, yesterday’s announcement will likely fuel inflation – increasing prices for consumers while depriving employees of much-needed hours of work.

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