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Not only did it damage the Tim Hortons brand but it gave Wynne the opportunity to carry the message to low information voters about how greedy and uncaring business is

How Tim Horton’s Blew it Bigtime!


By —— Bio and Archives--January 9, 2018

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 HOW TIM HORTONS BLEW IT BIGTIME
No matter how destructive you think Ontario Premier Kathleen Wynne’s idea was to increase the province’s minimum wage law a whopping amount, a couple of Tim Hortons’ franchisees and the franchisor played it wrong. In the end, with the help of the business-hating media, Wynne has emerged the winner in the battle over whether the increase in the minimum wage is good or bad.

Ontario’s Fair Workplaces, Better Jobs Act, 2017, took effect on Jan. 1 (You know a law can’t be good when it contains the word “fair.”) Among its provisions, the provinces minimum wage increased from $1l.60 an hour to $14. Under the legislation the minimum wage is set to increase again to $15 an hour in January 2019. Although businesses should and do expect minimum wages to increase as other prices do, the 2018 increase represents a 23% increase in low wage levels. As employers have to contribute to the employees Canada pension and Employment insurance payments, the cost to these employers will be more than just the $2.40 increase in the hourly wage.

The government justifies this increase by referencing the multiplier effect. The more money workers have, the more they will spend. More spending will result in more sales of goods and services that will in turn lead to increased business and more jobs. While this principle is true in theory, there are limits; if there weren’t, the minimum wage could be raised to $25 or $50 an hour and the economy would boom. But the reality is many business owners are not the ultra-rich that many on the left think they are.

The Bank of Canada predicted that by 2019, 60,000 jobs will be lost in Ontario as a result of the large increases in the minimum wage.

On Jan. 3, just two days after the legislation became law, two Tim Hortons franchisees announced they were eliminating paid breaks for their employees. Employees of the franchisees now get benefits but from now on, employees will have to pay half the cost of benefits if they have been employed at the outlets for at least five years. Shorter term employees will have to pay 75 percent of the cost of these benefits if they wish to continue to receive them. And it didn’t help that these particular franchisees are the children of the co-founder of Tim Hortons who is a billionaire. More fodder for the Ontario premier to dump on the rich.

These actions set the stage for the premier to accuse the franchisee of bullying (it is only permissible for the rich and business owners to be bullied in the province). Wynne said they should have taken out their anger on her and not the employees.

To make matters worse, the franchisor then agreed with the premier and those who criticized the franchisees. In a corporate release, the company called those franchisees who cut employee benefits “reckless” and attempted to do damage control.

There are problems with the way both the franchisees and Tim Hortons handled the situation. Of course Wynne actually doesn’t care how much Ontario workers make; all she cares about is being re-elected in the upcoming June election. And there are a lot more voters who work for minimum and low wages than there are voters who run small businesses. It’s all politics. And the actions of both the franchisees and franchisor probably helped Wynne more than it did in gaining sympathy for Ontario businesses who are facing extraordinarily large costs of doing business.

Some people are now calling for a boycott of Tim Hortons. And an Ottawa union is starting a hotline for employees in the province to tell their stories about what is happening to them. Although Kevin Flynn, Ontario’s Minister of Labour ,said what the franchisees did was legal no one should bet reducing benefits and especially eliminating paid breaks will still be legal in a few weeks.

The main problem with the actions of both the franchisees and the company is how it is being played out politically. There were such better ways to get their points across without giving Wynne and the Liberals further ammunition to show how mean businesses are.

What was objectionable in what the franchisees did was the timing; they cut employee paid benefits and paid breaks just two days after the law took effect. They should have waited a few weeks so they could show how the new minimum wage was affecting the bottom line of their business. By taking the actions they did before the effect of the $14 minimum wage could be felt, helped Wynne’s position. The franchisees could have shown they were taking the steps they took out of necessity, countering the argument they were punishing employees.

And the company was no better in taking the government’s side and accusing the two franchisees of being reckless. Tim Hortons has an advantage many Ontario businesses do not have. Their business consists of selling low cost products in high volumes. All the company had to do was to raise their prices 10 or 20 cents to offset the cost of the higher wages. They could have even posted signs in stores saying the increases were a result of having to pay higher wages.

They really played it badly. Not only did it damage the Tim Hortons brand but it gave Wynne the opportunity to carry the message to low information voters about how greedy and uncaring business is.


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Arthur Weinreb -- Bio and Archives | Comments

Arthur Weinreb is an author, columnist and Associate Editor of Canada Free Press. Arthur’s latest book, Ford Nation: Why hundreds of thousands of Torontonians supported their conservative crack-smoking mayor is available at Amazon. Racism and the Death of Trayvon Martin is also available at Smashwords. His work has appeared on Newsmax.com,  Drudge Report, Foxnews.com.

Older articles (2007) by Arthur Weinreb


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