Last week’s minimum wage hike appears to be putting pressure on Cochrane businesses that are already feeling the effects of an economic downturn.
“It’s a kick in the teeth right now,” said John Scondrianis, owner of Ducks on the Roof sports pub for 26 years and a 40-year veteran in the restaurant business.
“This will affect all smaller businesses, as the bottom line won’t be there … it’s already thin and it’s getting thinner,” said the employer of 33 full and part-time staff.
Scondrianis said between the rising shipping and delivery cost of food, the annual increases in minimum wage (to reach $15/hour by 2018) and the slumping economy, it’s a challenge to get people in the door even for $7-lunch specials and his prices will inevitably have to go up.
The NDP have committed to annual minimum wage increases through to 2018; the wage rose to $11.20 from $10.20 one year ago and last week it was set at $12.20; next year it will be at $13.60, reaching $15 by the fall of 2018.
This recent increase saw a $1.50 increase for liquor servers (previously earning $10.70/hr) and $1 for all other minimum wage earners.
Megan and Vince Houde, who have owned Olive ‘R Twist Bistro & Bar for more than nine years, says their casual fine food bistro has taken a lot of hits over the last couple of years. Most recently they have been contending with an economic decline exacerbated by rising labour and food costs.
The increased competition in Cochrane, where several bars and restaurants have opened since the Quarry construction, has put even more pressure on their business.
“We just can’t afford it,” said Megan, who works around 50-60 hours each week in the restaurant, as does her husband. “You just have to be grateful for what you do have.”
Megan said her roster, currently at nine full and part-time staff members, has been pared down to adjust to rising costs and slow sales – around half of what it usually is heading into the winter months.
She is also concerned that moving forward, they won’t be able to provide a raise for hard-working kitchen staff, who are less reliant on gratuities than front-of-house staff.
Banff-Cochrane NDP MLA Cameron Westhead said the government is “taking steps to help small-mid sized businesses make the transition” including lowering the small business tax rate to two from three per cent and introducing a wage subsidy program for employers hiring summer students.
Westhead also said there are two tax credit programs which will be brought to the Alberta Legislature later this fall: an investor tax credit and a capital investor tax credit (for machinery, equipment, buildings for business expansion/growth).
The province has also increased the capital available to the Alberta Treasury Branch (ATB Financial) by $1.5 billion for investment in small to mid-sized businesses.
While he recognizes these incentive programs might not directly affect some of the mom and pop-type businesses, the idea is that increasing paycheques and getting people back to work will encourage spending in these businesses and it becomes a “cyclical investment.”
“These programs are meant to diversify our economy, so we can better weather the ups and downs,” he said, adding that the province is in this current situation because of “our over-reliance on the oil sector.”
Kelly Joyner, owner of Tea… And Other Things, said she doesn’t see how the hike will benefit anyone.
She said while she is grateful for a landlord who hasn’t raised her rent in seven years, she knows she will have to continue to be creative to ensure her store is making money – including continued work on her online store.
“To be honest, I don’t think it’s fair for businesses,” she said, adding that she thinks the NDP assertion that slight increases to the minimum earners’ paycheques will result in more local spending is a misnomer.
“I think you will see the end of many mom and pop stores,” she said, adding that paying people ten or fifteen dollars an hour isn’t enough to pay the mortgage and that people working in stores such as hers aren’t normally the family breadwinners.
Camille Elain, 12-year and running owner of Donair On the Run, said while his staff of eight full and part-time already make above minimum wage he is concerned about the $15 threshold which is a mere two years away – especially considering he is looking to expand to a full-sized Mediterranean restaurant, which will increase hi staffing costs.
The Eagle was unable to get in touch with a local businessperson in favour of the hike by press time, despite multiple attempts.
