Critical Analysis: Are the franchise owners plans)? Is it ethical for Tim Hortons' franchisees violating the law by reducing employee bene- to avoid the cost of the increase in the minimum fits (i.e., eliminating paid breaks and requiring wage by cutting employee benefits? payment of part of the cost of dental and healthTIM HORTONS' RESPONSE TO INCREASE IN ONTARIO MINIMUM WAGE In 2017, the Ontario government passed a major WE tim Notton labour reform bill providing significant changes WORKERS AT to employment standards.* Among the reforms Tim Hortons is an increase in the general minimum wage from $11.60 per hour to $14.00 on January 1, 2018, and to $15.00 on January 1, 2019. Subsequent 10 3 WAS Steve Russell/ Tosanto Star Getty Images increases will be tied to increases in the Con- SHAKE ONE OF NOT PAY CUTS sumer Price Index. The increases have not been TIMMIES without controversy: they have spawned wide- NOT SHEN spread business criticism, labour angst, consumer boycotts and protests, and a public feud between What is the risk to Tim Hortons franchisees of responding to an the premier of Ontario and Tim Horton's heirs. increase in the minimum wage by cutting employee benefits? Are there other alternatives for Tim Hortons? The increases have been popular with the public (government polling indicated 60% of Ontarians advocates who have stated that the legislation will supported a $15 minimum wage) and labour protect vulnerable employees and boost spendingpower. The business community, however, partic- a spokesperson for the Great White Northern ularly independent business owners and the food Franchisee Association, which represents industry, has vigorously opposed them. Spokes- Canadian franchise owners, defended their people have claimed that the increases will be dev- actions, stating, "They, like many Ontarians, are astating and will lead to cuts in staff, reduced hard-working small business owners who are hours, or increased prices to absorb the costs. A striving to keep their business viable and keep all coalition of businesses urged a five-year implemen of their employee employed."54 tation of the increases." The Financial Account- Ontario premier Kathleen Wynne responded, ability Office of Ontario, an independent watchdog "To be blunt, I think it's the act of a bully. And if for the province, estimated that the increases will Mr. Joyce wants to pick a fight, pick that fight result in the loss of approximately 50 000 jobs,50 with me and not the people who are working at and the Bank of Canada warned that the hikes the service window of the stores."$5 could cost 60 000 jobs by 2019.51 To counteract the As reported by The Globe and Mail, the Tim effects of the increase, the government has lowered Hortons franchisor tried to distance itself from the tax rate for small businesses from 4.5% to 3.5% the dispute. In a statement it said, "Tim Hortons effective January 1, 2018.52 [employees] should never be used to further an When the 21% wage increase became official agenda or be treated as just an 'expense.' This is on January 1, 2018, many businesses reacted, completely unacceptable. These actions by a few most notably some Tim Hortons franchisees. restaurant owners . . . do not reflect the values of Employees at two Tim Hortons locations in our brand."56 Cobourg, Ontario, reported that they had been A social media campaign sprang up encouraging informed that they would no longer be entitled people to boycott Tim Hortons to show solidarity to paid breaks and that they would have to pay at with the workers and angry consumers rallied out- least half their dental and healthcare benefits. side Tim Hortons locations across Ontario, holding The two locations are owned by Ron Joyce Jr. signs reading, "Shame on Timmies for not sharing and Jeri Lynn Horton-Joyce, the children of the and chanting "Hold the sugar, hold the cream, Tim co-founders of the business. As reported by CBC, Hortons don't be mean."57