Rising food prices and a ballooning minimum wage. It is a bad time to be a restaurant owner, or even a patron at a diner.
According to Statistics Canada (via The National Post), restaurant prices in Ontario surged nearly two percent between December 2017 and January 2018, the biggest pace in the entire country. Alberta was second on the list – the province also has a high minimum wage of $13.60, and $15 later this year.
In January, overall food prices jumped 2.3 percent, the biggest increase since April 2016, when it spiked 3.2 percent. Meanwhile, prices at eateries soared 1.9 percent in January – 3.7 percent year-over-year – and this is the largest increase since January 1991 when then-Prime Minister Brian Mulroney introduced the federal general sales tax (GST).
Since the Ontario minimum wage is scheduled to swell to $15 in 2019, these restaurant price hikes are expected to continue. Food is the largest cost for restaurants, followed by labor.
The food industry isn’t the only one in Ontario to suffer the consequences of Premier Kathleen Wynne and the Liberal Party’s policies.
From The Canadian Press:
Ontario outpaced inflation in other provinces and territories for other categories as well.
Child care and housekeeping services in Ontario, for example, increased 9.9 per cent in January compared with the same month the previous year, according to Statistics Canada, while Canada-wide that service increased 5.8 per cent. The agency said that coincided with the legislated minimum wage increase.
Royce Mendes of CIBC World Markets believes it’s likely the increase in that service was also tied to the bump in wages.
Are consumers reacting? There have yet to be any considerable data to suggest that they are refraining from heading out, but Alberta is beginning to witness a decline in restaurant sales, a year after enacting a higher minimum wage.
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