Thursday January 04, 2018

Tim Hortons controversy shows Canadians are 'addicted to a low-wage economy,' says author

Tim Hortons has come under fire after one of its franchises cut employee benefits to compensate for Ontario's minimum wage hike.

Tim Hortons has come under fire after one of its franchises cut employee benefits to compensate for Ontario's minimum wage hike. (Eduardo Lima/Canadian Press)

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Controversy over the heirs of the Tim Hortons empire cutting worker benefits at their smalltown Ontario franchise is bad for the entire Tim Hortons brand, says writer Douglas Hunter.

CBC News reported Wednesday that the owners of a Tim Hortons in Cobourg, Ont., are eliminating paid breaks and cutting back on employee benefits to compensate for Ontario's minimum wage hike.

The franchise owners are Ron Joyce Jr. and his wife Jeri-Lynn Horton-Joyce. The former is the son of Ron Joyce, who co-founded the chain in 1964. The latter is the daughter of Tim Horton himself. 

As It Happens host Carol Off spoke to to Hunter, the author of Double Double: How Tim Hortons Became a Canadian Way of Life, One Cup at a Time.

This afternoon, the premier of Ontario, Kathleen Wynne, called the owner of this franchise, Ron Joyce Jr., she called him "bully." Would you agree with that?

It's setting up the way I think the premier would like it to go, which is the heir to a large restaurant fortune taking on the minimum-wage people. And I have great empathy for the minimum-wage people, but I think this is turning into kind of a binary fight.

There's 3,500-plus Tim Hortons in Canada. There's 1,400 McDonalds in Canada. We have a big low-wage, minimum-wage service sector and this is the trickle-down we're having from the minimum-wage increase and it's playing out through the industry, and now we're finding out how it's working — for good or for ill.

double double

Douglas Hunter chronicled the history of Tim Hortons in his book Double Double. (HarperCollins)

There's a document that the workers of this Tim Hortons have been asked to sign. Those who have more than five years of service will have to pay 50 per cent of the cost of these benefits. Employees between six months and five years will pay 75 per cent. They've crunched the numbers and they're saying they're paying out of pocket for this.

I'm not here to defend Tim Hortons in any shape or form. I feel for these people. This is why people have unions. It's an ugly day when a vulnerable worker ends up with less in their pocket than they started with because of a policy that I think was intended to make life better for people. So I'm not going to argue that they're being treated fairly.

Is [this document] intended, do you think, to embarrass the Wynne government?

What I'm interested in in this world is the reality that Canadians have kind of gotten a bit addicted to a low-wage economy. We like our cheap coffee. We like our cheap donuts. And the reality is we've allowed a sector of our economy to be run on this sort of precarious basis on the workers' side. And I would like to see that change. I think most Canadians would like to see that change. 

CBC News: Multiple Tim Hortons, other businesses cut pay

I'm really intrigued to know what the other 3,500 restaurants are doing — if they're just quietly absorbing it or if they have other strategies or if this is something that other workers are facing in other franchises.

Because the franchises all operate as independent companies. Head office cannot be particularly prescriptive at all in telling franchisees how to pay employees.

Douglas Jones

Douglas Hunter authored a book about the rise of Tim Hortons. (Submitted by Douglas Jones)

But what you have pointed out in your writing in your book Double Double and in your tweets, you're saying that what they do control ... is all the products, all the coupons, all the specials, all the pricing.

People have to understand how the franchise system works. The franchisee is really buying a system. You're paying up a quarter million dollars or something to get in the door for 10 years.

You can't have a price war with another Tim Hortons. You have to buy the equipment from them. You have to buy all your food products. There's not very much a franchisee can really control in terms of cost.

That's why you're not running an independent mom-and-pop coffee and bake shop. 'Cause if you were, and you were looking at your minimum wage employees and saying, "Well, I've got to pay them $14 an hour," you could look at your businesse and say,"You know what? This cup of coffee is now going to be another 12 cents."

The independent franchisee cannot just go rogue and do whatever they want.

Tim Hortons Division Street Cobourg

The Tim Hortons location on Division Street in Cobourg, Ontario. Employees here received a letter outlining increased benefits costs and cutting paid breaks due to the province's minimum wage hike. (James Pickersgill)

This is the company that says this is for the working person. This isn't the snooty place that's selling $5 lattes. This is where ordinary working people go. Do they not at some point have a public relations problem if they find out that people are stiffing their workers?

It looks bad for the entire system.

The moment Canadians stop identifying themselves with Tim Hortons, you know, as who they are, then the brand has a problem. Because really, McDonald's makes a pretty good cup of coffee. Lots of places make pretty good cups of coffee.