Leave it to the premier of Ontario and Canada’s state broadcaster to stoke anti-business ire by using Canada’s once-beloved homegrown coffee chain as their scapegoat.
After Premier Kathleen Wynne rammed through new legislation hiking the minimum wage by 21 per cent at the start of 2018, without conducting any impact assessment and going against her old pledge to not raise it above inflation and giving only six-months notice, the CBC had the perfect news report to whip up proletarian anger at the business community, which would deflect blame from the unpopular Liberal premier.
The CBC’s report on the Tim Hortons heirs cutting paid breaks and reducing benefits at two Tim Hortons store locations resonated with everyday Canadians and their general sentiment that fat cat millionaires are exploiting their workers to line their own pockets. The article was wildly popular, shared over 185,000 times and with over 7,000 comments, with many top commenters suggesting more than one way to skin the cats.
After CBC teed up this story for the premier, Wynne drove home the false narrative that nasty business owners are keeping Canadians from making a living wage by mimicking US President Trump’s style of attack tweeting her opponent (ironically she has repeatedly chastised the US President for his bombastic behaviour in the past, now she’s taking a page out of his populist playbook).
Now, I’m not suggesting CBC conspired with Wynne, but it’s worth asking why CBC chose to lead with this particular story when there are countless other stories out there of small family businesses struggling to survive under the new conditions imposed upon them by Wynne’s government, and these small business owners are putting forth similar cost-saving measures. The CBC has a long track record of attacking businesses in Canada (some of it fair game obviously, but then you have ridiculous cases like the Subway fake meat fiasco which has led to the sandwich franchise suing the CBC, i.e. Canadians, for $210 million for defamation). When it comes to the CBC going after left-leaning governments, the public broadcaster’s paymasters, the ferocity is lost.
The Tim Hortons heirs, likely very wealthy from their inheritance (which Wynne inappropriately points out as if it has relevancy to whether or not their Tim Hortons locations are making a profit), who own two franchise locations in Cobourg are an anomaly compared to the average small business owner. CBC’s use of these Tim Hortons heirs as the case study of a business reacting to this government’s rash, self-serving and disruptive hike of the minimum wage distorts the real picture of average small businesses trying to cope. Furthermore, the CBC’s viral report doesn’t mention the huge additional cost small businesses owners like a Tim Hortons franchisee are now saddled with. Only at the end of one of its several reports on CBC’s The National last week did the public network briefly mention the cost to an average Tim Hortons location. According to Great White North Franchise Association, admittedly a biased source, when factoring wage increases, CPP, EI, and training the additional costs for Tim Hortons is just under $7,000 per full-time employee or $243,889 per year per average franchise with 35 employees. Even if those numbers are inflated, the wage increase alone means the average franchise is spending close to $200,000 more a year. Yet, CBC’s coverage from last week barely touches on this and and instead focuses on the public firestorm they unfairly unleashed on franchisees. Of course the CBC doesn’t give the NDP or Progressive Conservatives any airtime either.
By the end of the week they were still bashing the Tim Hortons franchise owners. While Ian Hanomansing was interviewing the author of a book on the iconic Canadian coffee chain he asked the author how much an owner typically makes from a franchise annually. After the author tells Hanomansing the average pre-tax amount is between $300,000-$400,000, the host says, “[Franchisees] work hard, as you know from the research you did in your book, but still $300,000 to $400,000, you know there are a lot of people in Canada that will look at that and say, ‘So franchisees are complaining about a small, depending on your perspective, increase in the minimum wage?'”
$200,000-$243,889 is no small amount in additional costs that the franchisee is apparently just supposed to absorb. And if you factor in their pre-tax income is $300,000-$400,000, after taxes many franchisees could be left with very little annual income now. No wonder, with Tim Horton’s head office not allowing price increases and asking franchisees to eat all of the additional costs on their own, they’re now resorting to rolling back employees’ benefits and paid breaks (perks they already offered their employees without a government decree). This also doesn’t factor in the incredible risk and investment a franchisee has to pony up to buy a Tim Hortons location, and possible debt they’re paying off from the initial loan on that investment.
Instead of pointing all of this out, Hanomansing and CBC perpetuate the false notion that these franchisees are greedy by suggesting $300,000-$400,000 is a lot of money (which it is if they actually got to keep all of that and not have to pay off the initial investment and taxes). Never mind how hard many franchisees work and how they’ve created jobs for dozens of people, no, instead they shall be vilified by the public network. And the CBC was remiss in not pointing out in its coverage that the independent Financial Accountability Officer, employer groups, banks, and employers have all warned against this steep and sudden increase in the minimum wage and how it would cause inflation, cuts to workers’ benefits and hours, and a net loss of tens of thousands of jobs. The CBC, in spite of Ontarians being largely fed up with their premier, only seems to give Wynne national coverage when it puts her in a positive light.
Much of the chattering class also chimed in with their two-cents, joining in on the anti-Timmies bandwagon.
All of this isn’t to say I’m a pro-business absolutist. And it’s important to point out that Tim Hortons is largely owned by a Brazilian company now and deserved a lot of flack, along with the previous federal governments, for exploiting the temporary foreign workers program. And don’t get me started on how stupidly patronizing Tim Hortons ads are in trying to exploit Canadians into thinking buying Timmies is somehow their patriotic duty, but that the majority of mainstream media cheered on or didn’t push back against the premier vilifying small businesses by implying they’re all bullies and greedy by using the Tim Hortons heirs as symbolic of business owners as a whole or distraction from the whole, is the latest sign that Canada is becoming increasingly anti-competitive and socialist.
(The Ontario Liberal government has encouraged businesses to increase prices in order to pay their employees the higher wage, yet Tim Hortons head office isn’t allowing franchisee to do so, so really protests outside franchises and the boycott are misplaced.)
This anti-competitive malady is especially dire when our only neighbour down south has just slashed taxes, making us even less competitive, and the federal Liberals closed tax “loopholes” for small businesses while allowing the 0.0001 per cent to continue to reap the benefits of the tax loopholes that benefit these fabulously wealthy individuals.
You need look no further than the corporate welfare given to Bombardier — or the company’s lucrative government contracts like the one with the City of Toronto for its apparently defective street cars it can’t deliver on — or the relatively easy time Galen Weston and Loblaws have had over the bread price-fixing scheme — or the company’s sweet deal with Wynne’s government of up to $75,000 per-Tesla-electric-truck rebate for its new fleet to see that this country, like any country descending into socialism, vilifies competition while simultaneously and quietly declaring certain large corporations the winners. In other words a kleptocracy.
(I’d be remiss not to point out that The Globe and Mail and National Post had editorials calling Wynne out on her grandstanding. Even the Toronto Star had allowed a guest column pushing back, but the overall sentiment from many in the media, especially the state broadcaster that has immense sway in this country, and the general public has been one foolish contempt for small business, the lifeblood of any healthy economy and democracy. Bizarrely, National Post’s Andrew Coyne responded to the latest Tim Hortons brouhaha by suggesting the government mandate a guaranteed income instead. I guess the old saying needs to be revised to “The only things guaranteed in life are death and taxes and and income. Yes, even a top supposedly conservative columnist thinks everyone should get a guaranteed income, i.e. expanding welfare to all, and seems to be even more socialist than the oversized left on this issue.)
In one CBC segment on Friday the public broadcaster briefly included an independent coffee shop owner, before returning to bashing Tim Hortons again, and she had this to say about having to raise her rates 22 per cent, “We’ve had two customers already leave and say ‘Tim Hortons hasn’t raised their rates.’ So we’re losing business because of this.” She also said she would likely have to close up shop for good.
For as stupid as the outrage at Tim Hortons and franchisees is, with things like #boycottTimHortons (a great way to put their employees out of work, while letting chains like McDonalds off the hook), the real people who will suffer are mom and pop shops like the local grocer owner, corner store owner, laundromat owner, restaurant owner, tailor, retail owner, etc. and the many workers who will lose hours, benefits and jobs over this reckless increase in the minimum wage. Tim Hortons or the franchisees will weather this storm fine, but small independent businesses and startups, what fuels a better life and increased wealth for us all through competition and innovation, will take the brunt of it.
In the coming days and weeks more unfortunate stories of middle class business owners closing up shop and layoffs of workers will come to light as the full effects of the minimum wage hike are felt. Also, everyone will see and feel the inevitable rapid rise in inflation from the minimum wage hike.
Perhaps Ontarians will eventually look past Tim Hortons franchisees trying to cope with being squeezed by their government and head office and look at how this reckless Liberal policy is hurting fellow Ontarians and doing further damage to our economy. All of this, and the “free” medication for anyone under 25 has me asking in my latest Loonie Politics column, “Are Ontarians Hopelessly Addicted to ‘Free’ Stuff and Money From Their Government?” The continued irrational lashing out by Ontarians at Tim Hortons franchisees, whipped up into a frenzy by their premier that has led the province to become the greatest indebted sub-sovereign nation in the developed world, seems to answer my question with an exuberant “Yes!!!!”
Canadians would do best to stop reading the fictional dystopias of Margaret Atwood and start reading about real-life nightmares, past and present, of the Soviet Union, Greece, and Venezuela.