Bear’s Den says minimum wage didn’t shutter business
OWNERS CHOSE TO CLOSE INSTEAD OF REBRAND UNDER PRESSURE FROM MULTIPLE FEDERAL, PROVINCIAL AND COUNTY COST INCREASES
Thursday, Jan 18, 2018 06:00 am
In light of the media storm surrounding the announcement of the Bear’s Den restaurant closure, co-owner Scott Winograd said he wants to clear up the misunderstanding that the closure is due to increased minimum wage and rather it’s about layered policies from all three tiers of government that he said are gravely affecting the bottom line of business owners.
“A lot of media is going on the minimum wage thing – it’s not that, I want my staff to have a fair wage, and all of them do. I want to make sure that’s quite clear,” said Winograd, who has been the general manager and proprietor for the last two years and says while his servers were making minimum wage other staff were paid above that.
Despite the recession, Winograd said the iconic fine-dining restaurant – a facet of the industry he believes to be in the “twilight” zone – was beginning to see an upswing in business.
“We turned a corner, our revenues were going up, bookings were going up,” he said.
In 2017, his revenue increased by about 25 per cent compared to 2016.
“But then a lot of the new legislation really impacted us in a bad way,” he said.
The carbon tax, which increased by 50 per cent on Jan. 1 – from $20 per tonne to $30 – was one of the biggest factors since suppliers partially passed down these expenses to restaurant owners. In December of 2017, the NDP announced a policy forcing restaurant owners to pay their employees for statutory holidays regardless if the employee worked or if the restaurant is open.
Winograd especially takes issue with this as seven of the nine statutory holidays this year land on a Monday – a day which the restaurant has never been open.
“I have to pay my entire staff for all of those days that we’re closed. Those staff don’t normally work at all. All of the sudden the government decided to give my staff a bonus that comes out of my pocket. Not that I don’t want them to have a bonus but when you take another $30,000 out of my bottom line I really have to question the viability of my business,” Winograd said.
Winograd’s property taxes for the restaurant – regulated by the Rocky View County municipality – have also had a significant increase and this, coupled with the federal government’s policies around the carbon tax, has trickled down creating another imposition on businesses.
“I have three tiers of government that are all increasing my costs and putting pressure on me as a business owner and none of those levels of government are talking to each other. Especially, they’re not talking to business owners,” he said.
The Alberta Minister for Labour, Christina Gray, responded by pointing to numbers that show an increase to restaurant receipts reaching an all-time high in Alberta last year.
“Employment in the province’s food services sector is recovering from the low of the recession,” said Gray in an email statement to the Cochrane Eagle. “While it is unfortunate to hear that the owners of this restaurant have decided to close their doors, we know Albertans continue to enjoy dining out with their friends and families.”
The minister made reference to the growing number of restaurants opening in Calgary as well, pointing at data from Statistics Canada showing an increase to employment in the hospitality sector. In December 2015, 140,400 Albertans were employed in accommodations and food services compared to 148,500 in December 2017.
However, Winograd contends those numbers are comparing apples to oranges.
“She’s comparing a year coming out of recession to a year in recession. So those numbers don’t make sense at all.” he said. “140,000 was a year ago in a deep recession but you’re also grouping in all hospitality in Alberta, so that’s resorts, hotels, golf courses, fun parks and restaurants – all types of restaurants.”
“They’re throwing out numbers that are making it look like it’s a completely different story. Business owners are hurting big time,” he said. “When you’re hit with a big bill like that, it changes your business model, it changes the direction of your business, how you’re going to operate, you have to re-forecast.”
Winograd said when the owners looked at reorganizing their forecast, it came down to increasing their prices by 25 to 30 per cent – an unsustainable option that would have alienated his customers.
However, he said if prices can’t be raised, there are few options left.
“I’m looking at the comments people are saying on Facebook, and for the most part people are supportive but the haters out there are accusing us of having prices too high. So wait a second, you’re expecting me to lower my prices and increase my wages? Is that what the public expects?” he said. “That’s why I want to speak about this, because that’s not how business works.”
Winograd said he has received support from other local businesses but is also receiving backlash from community members who he said have misunderstood his reasons for closing.
“I had a call yesterday, someone said ‘you should kill yourself’ and then hung up. Can you believe that?”
Patti-Jay Powell, executive director for Futures West, a firm that helps support small rural Alberta businesses, said she could not directly comment on the Bear’s Den closure but did say that for rural Alberta businesses to thrive a variety of components need to be factored in.
Among those are potentially diversifying the business, understanding the competition and understanding what’s happening in the economy are key. In addition, a business needs to have enough population and demographic to support them.
“Understanding what affects them is really important,” she said adding that the downward spikes in the economy, which caused a slow down in the money that was trickling down from oil and gas industry has stung small businesses.
Winograd said for the Bear’s Den to be successful with the new policies, it would have to do a complete rebrand and in the end they opted to pull out before too much was lost.
“We had an opportunity to thrive again. Seeing the new changes, especially January first with the carbon tax and statutory holiday thing – that was the straw that broke the camel’s back. It was just too much.”