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Minimum wage hike will 'annihilate' small business: sub shop owner

'This is a big challenge and it’s absolutely coming at the worst time,' says Fern Resort owner; Sundial employee counters pay raise 'makes a big difference'
marcus sadeghi mr sub owner orillia
Marcus Sadeghi, owner of Mr. Sub in the Fittons West Plaza, said the minimum wage hike is leading to stress and anger among many small business owners.

As of Jan. 1, the hourly minimum wage in Ontario rose from $14.35 to $15, while the hourly wages for liquor servers increased from $12.55 to $15. The move is music to the ears of those earning minimum wage, but some local businesses are worried about the impact on their bottom line.

Marcus Sadeghi, owner of Mr. Sub in the Fittons West Plaza, says he is angry and frustrated with the Ontario government’s decision to boost the minimum wage amid a crippling pandemic and rising inflation.

“The agenda is very clear: they want to destroy the middle class and annihilate the small businesses,” he said.

“This agenda has been in the works since 2016 when the minimum wage went up from $11.60 to $14. They are systematically making this country a social communist country.”

Sadeghi says the minimum wage hike makes hiring more people impossible.

“My margin is non-existent, I’m working myself to death, I’m stressed beyond reason, and I’m angry.”

Sadeghi says the minimum wage increase is coming at the worst possible time with the latest round of restrictions that have been put in place to stop the surge of the Omicron variant.

It’s also hurting the hospitality industry, says Mark Downing, owner of Fern Resort in Ramara Township.

“The challenge is we have 220 staff here, many of which are first-time, entry-level employees - the majority of our workforce is minimum wage. It’s a big hit for us on costs and all of the levels of having to make that up for all our other employees as well,” Downing said.

With the uncertainty of the pandemic, Fern Resort has needed more staff than usual to oversee safety protocols such as sanitization and social distancing. With the increase of the minimum wage, staffing the resort with the necessary amount of employees becomes difficult, Downing says.

“We still have to deliver on our experience and provide a good quality resort for our guests, and the number of employees it takes to deliver is substantially more. This is a big challenge and it’s absolutely coming at the worst time,” he said.

“We are struggling to deliver on the people that are booked here now, everybody is kind of doing three to four jobs because there are a lot of challenges with facilitating and serving our guests right now.”

Joe Winacott, owner of Studabakers Beachside Restaurant in downtown Orillia, agrees.

“This comes at a bad time with lockdowns, food cost rising out of control, and insurance doubling,” he said.

“I don’t feel the Ford government understands all aspects of what it takes to run a business. There is only so much money to go around and we don’t want to push it all on customers, so we will be eating some of those costs.”

Winacott says his hiring processes will now change due to the minimum wage increase.

“We probably won’t hire staff to help out during the quiet times; we will re-evaluate if we need to be hiring two to three closers. Over the next few weeks, we will have to determine how to recoup some of these costs,” he said.

“It’s easy to say give everyone more money, but that money has to come from somewhere.”

The increase in minimum wage, however, is helpful for students entering the workforce. Grade 11 Patrick Fogarty Catholic Secondary School student, Emitt McDonald, says the increase is helpful.

“I work at Sundial Retirement Home in Orillia as a server. It’s a good gig for me, but I don’t get a ton of hours,” he said.

“To be boosted up to $15 makes a big difference. Soon, I’ll be helping my mom with rent, I’m saving for school, and I play competitive baseball which costs about $10,000 a year.”

McDonald, 16, says with the cost of living being inflated, making $15 helps take some of the weight off of the shoulders of his single mother.

“Everything costs so much nowadays, so to be able to take care of myself is important,” he said.

Shawn Mombourquette, who works as a lift operator at Horseshoe Valley Resort, says it’s hard to say how the increase will affect himself and others currently earning minimum wage. Mombourquette is retired and works at the local ski resort “for fun” and to earn some extra income.

“I think anything you can get will help; it will always make a difference. It will maybe pay a little bit more in taxes and then you will maybe get a bit more back… but every time you go up a little bit more on your paycheque, you’re into a different tax bracket," he said. "They’ve got you cornered everywhere.

“I don’t think it’s really coming up that much (to match) cost of living. It’s not even close. You go buy six oranges and it costs $7… it’s ludicrous. I don’t know how the young kids do it today. How can they afford a one-bedroom apartment in Barrie let alone groceries," Mombourquette added.

Mombourquette said with the price of gas expected to jump to $1.65 per litre this year and grocery prices rising, any additional income people earn from this will likely just get absorbed there. 

“Where does it balance?” asked the Oro-Medonte Township resident

-- With files from Nikki Cole

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Tyler Evans

About the Author: Tyler Evans

Tyler Evans got his start in the news business when he was just 15-years-old and now serves as a video producer and reporter with OrilliaMatters
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