Minimum wage hike worries Nova Scotia restaurant owners

Restaurant owners in Nova Scotia say rising labour costs as a result of the new February holiday, combined with a hike to the minimum hourly wage this April, will make it tougher to stay in business.

New holiday, April minimum wage hike tough on restaurant business

Many Nova Scotians will get a day off next Monday, but most restaurants are planning to stay open during the first provincial Heritage Day.

Restaurant owners are worried about paying overtime but that's small change compared to the impact of a 20 cent hourly minimum wage hike coming April 1.

Costa Elles operates two Greek restaurants in Halifax. He said the minimum wage increase to $10.60 an hour is comparable to paying staff to work a holiday each and every month.

"The minimum wage issue, it's huge," said Elles. He said rising labour costs were a factor in his decision to close two other restaurants he previously co-owned.

Minimum wage in Nova Scotia was $9.65 an hour in April 2011, meaning there's been a 9.5 per cent increase over the past five years.

It's adjusted by the province annually based on the cost of living. After the April 1 increase, Nova Scotia's hourly wage will be the fifth highest in the country.

Negative impact predicted

Restaurants are Nova Scotia's third largest employer. Luc Erjavec, the Atlantic vice-president of Canadian Restaurant and Foodservices Association, said about one-third of every dollar spent by a customer pays for labour costs.

Next week's Heritage Day will see restaurant employees who have worked 15 out of the previous 30 days qualify for holiday pay or time off.

When Erjavec does the math based on a survey of Nova Scotian eateries, he predicts a negative impact on sit-down restaurants.

"We estimate the minimum wage increase and the new holiday will cost the average operator about $4,000," said Erjavec. "That's roughly ¼ of their profits for the year."

Restaurant owners like Elles, who also heads the Restaurant Association of Nova Scotia, have tried and failed to convince the provincial government that full-time, professional waiters should be excluded from annual hikes to the minimum wage. Elles said that's because they are minimum wage earners in name only. 

"All of my servers make tips," said Elles. "The increase to minimum wage will cost me $500 a payroll and the government is rerouting money to servers already making $25 an hour."

Elles said the current rules mean less money is available to raise the wages of the lowest-paid dishwashers and kitchen help.

At the same time, owners said rising labour costs that aren't offset by either higher menu prices or a higher volume of customers could starve more restaurants out of business later this year.

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