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The Standing Committee on Social Policy will now come to order. First on the agenda is the report of the subcommittee on committee business. Your subcommittee on committee business met on Friday, November 27, , to consider the method of proceeding on the order of the House dated Thursday, November 26, , in relation to the following bills:. There being none, are the members ready to vote? Shall the subcommittee report be adopted? All those in favour?
We now move to public hearings on Bill Each presenter will have up to five minutes for their presentation, followed by up to nine minutes of questions from committee members which will be divided equally among the three parties. We will start the rotation with the official opposition. Ontario Restaurant Hotel and Motel Association.
If you would have a seat, introduce yourself for Hansard and please begin. Good afternoon, Chair and committee members. ORHMA does not support more red tape; however, we have been active and instrumental in obtaining changes to the legislation and we support the intent of Bill A common practice in many establishments, including restaurants and hotels, is that tips and gratuities may be pooled and shared by a variety of employees. Once these gratuities become part of the controlled tip pool as defined by the Canada Revenue Agency, they are subject to payroll taxes and remitted by the employer.
In the hotel community, gratuities are part of negotiation during collective bargaining or, in a non-union environment, gratuities becomes part of the wage and benefit discussion during the employment process. ORHMA supports the provisions of Bill 12 that recognize and allow for the continuation of tip pooling to support those that are part of the service delivery that leads to the guest experience.
ORHMA is recommending, where tips and gratuities are charged on a credit card and the employer must pay the credit card company a percentage or merchant fee on each sale, that the employer pays the employee the tip less the merchant fee cost of the gratuity tip component of the bill. The ORHMA supports the intent of the legislation and looks forward to working with government to ensure smooth implementation of the bill for both our employees and customers.
Thank you very much, sir. Thank you very much for coming in, and thank you very much for your presentation. I think that if the public realized that the staff had to pay a percentage back to the employer because of the charges on credit cards, they might push themselves to leave a cash tip. How would the employee know if the company is paying 1. It does need education and awareness. There are many people who work very hard in a restaurant to contribute to that guest satisfaction.
Well, thank you for coming in. Thank you so much for being here today. How would this change to the law impact the industry in a negative way? Would it really impact the industry in a negative way? Those that are not should not be doing it anyway. Is there anything else that you can recommend, broadly speaking, that would benefit the service industry as well as the industry in general more that we could incorporate in this bill?
We feel that it has all the signals that it needs—all the messaging that it needs. The credit card fees are astronomically high in this country.
So credit card fees is one major area where you think there could be some reform that might help out the industry. Any other areas that you think, broadly speaking, could benefit? Not in this specific bill, in the intent of it. And, in general, have you heard complaints about this issue around tips not being distributed in a fair manner? Is that something that has come up, in your experience?
But at the end of the day, I think, generally, it is a fair system to have a mix to support all those who support that service delivery. Thank you very much for being here. I have no further questions.
Elenis, for coming down, and thank you for the work that your industry has done with us in order to try to get the terms of this correct. Maybe you could speak to how you see this affecting the vast majority of owners who do it the right way. First of all, integrity and fairness should be part of any business. Those who do not have good practice standards—especially with employees, who are the biggest asset in a business, especially ours—should be applied punitive actions on it. I believe that, for the most part, the industry will welcome this bill, as it is intended to do, and that it will be able to be something fair.
I mean, collective bargaining is sacrosanct. People come together, they get a deal, and the deal includes wages, it includes working conditions—a whole bunch of aspects. As with Tony, we have met with Mr. Potts and worked on this quite a bit. The changes that they helped facilitate were, we felt, necessary and were appreciated. The premise of the bill does take us aback sometimes. It seems that this government wants to constantly attack this industry and act like all we want to do is take advantage of people.
But we appreciate the changes that have been made, and we concur with the bill as it stands now. We would welcome the opportunity to discuss this system with the government in their current consultations with the Ministry of Finance, looking at the way they deal with businesses—cash-heavy businesses, especially. But overall, we agree with how this bill has evolved over the years and we will support the bill. Thank you very much.
The first question is to the third party. Thank you for being here and for your presentation. How widespread do you think this problem is around the issue of tipping and fair sharing of the tipping? Is that something that has come up often, in your understanding?
It never comes up, to tell you the truth. It has never come through my desk. And there may be various reasons for it not getting to your desk. You indicated something around the way the industry in general is being treated by the government. Could you just expand on that? Our industry is one of the lowest returns on investment of any industry, but we do provide very good jobs for first-time employees, and we were the number one new-job employer last year.
I would estimate that a lot of people in this room started in restaurants. What would be some strategies that would assist the industry, broadly speaking? Well, I think that a lot of the apprenticeship programs specifically leave us out of the programs. These are jobs that are highly skilled—chefs, line chefs, sous-chefs, pastry chefs. There are a lot of skilled jobs in the restaurant industry, and many of the apprenticeship programs specifically leave us out of the programs.
We do have a problem getting staff, especially in the back-of-house system. I think it shows just how much tipping can add to a salary. With respect to this bill, are there any things that you think could be added to make this bill more effective for perhaps the servers, or the industry in general? I agree with Mr. Other than that, no. I think we worked with the Ministry of Labour pretty closely—. Now we go to the government. Rilett, for coming down. I appreciate the support.
Maybe you could speak to the disadvantage that the major chains put themselves at, against a smaller operator who might be doing this, in that their margins would be padded by tips, whereas the larger chains have to get it on the basis of their prices.
You usually would promote wait staff up to management. They have tighter margins, so you might see it more for that reason. Is CRA making that ruling?
What can you say about that? The only change is the CRA has been a little more clear about getting that information into the hands of restaurateurs. But any time there are source deductions—. We have to go to the official opposition: A big account will negotiate a smaller percentage to Visa or MasterCard.
It used to be that MasterCard was much lower than Visa, but not so much these days. How will employees actually know what percentage their employer is paying to a credit card company? This is all very new to us. Most would argue to keep red tape for small businesses as low as possible. Some may choose not to do it, simply because it would just be easier not to try. Would you like them to just mandate it? It would all depend. Some restaurants are almost all cash and some are almost all credit card, so I guess it would also depend on the restaurant.
We have to go to the next presenter.