Page 14 - Fall 2017 english

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Golf Business Canada
“There are some out there, certainly unions and many in government, who believe the minimum wage hike will be paid for out of these phantom profits that most assume every business is reaping, not recognizing that there are tons of businesses every year on an annual basis that are losing money and that big hikes in their costs can lead to questions about the future viability of that very business,” said Kelly.
“It’s very disturbing to see the rhetoric that has been used by our political leaders in a variety of provinces, including Ontario, to justify a minimum wage increase,” he said.
Particularly in Ontario, Kelly sees the minimum wage and the other reforms as a Hail Mary pass by the Liberals, a spectacular move in front of a looming election, and there is no defence other than the business community calling a foul.
“At minimum, a government should be conducting and releasing an economic impact assessment of the potential harm or benefits of the minimum wage increase and they’re not prepared to do that,” he said.
“They’ve just said no, we’re going into this regardless of any outcome and the only reason they’re doing that is it’s a Hail Mary pass to try to win the election and that’s what I find so disturbing about this. It is about winning an election, not about job creation or even protecting existing jobs,” he added.
Calderwood agrees, adding that the rush to please the masses is not only at the expense of business, but also ignores how it will affect specific sectors.
“I think the golf industry is one of those that gets unfairly penalized because we have such a large percentage of college and university students, for example, that fall in that minimum wage category. Labour cost is the biggest, single cost in running a golf course. Put those two together and the golf industry is at risk,” said Calderwood.
“You either raise price, lower service or eliminate some of the labour to keep labour costs in line, so that you don’t have to raise your price. None of those is a very ideal solution,” he said.
“You’re running a golf business that’s subject to weather and short seasons. It’s nice to help people. That sounds great on paper, but I predict that it will actually hurt those people in the golf industry. The people they’re trying to help are going to get hurt. The employment is going to go down in the golf industry, not up,” said Calderwood.
THE IMPACT ON GOLF COURSES
So, what impact will the $15 minimum wage increase have on golf courses in Alberta and Ontario? Although the results are yet to be seen, golf course owners and operators are concerned.
“We’ve surveyed business owners and certainly, most of them are reporting that this is going to come out of the wage budget that they have currently allocated, so that means they’re going to have to reduce the number of hours. For some firms, this means that if they’re in an area where they can possibly increase prices, they may look to do that,” said Kelly.
Kevin Thistle, vice president of business development of the Windmill Golf Group, based in Calgary, agrees. “I’ve always stressed giving people great service and a great experience, but that could be jeopardized by less staff,” said Thistle.
Thistle says total wages at the eight golf courses under the Windmill umbrella are 40 percent of revenue. Out of those wages, 40 to 45 percent of those wages are minimum wage workers.
“The golf business, for the past 17 years or so, has been getting leaner. It’s not as if we woke up today and suddenly said the industry has too much fat. I would say since about the beginning of the last decade, we’ve been trying to control costs for various reasons,” he added.
“In 2008-09, it was the global recession and in Alberta the past couple of years, it’s been the economy,” he said.
“Consumers are looking for value over increased price and how often have you heard that affordability is one of the great challenges facing golf, but such a sudden jump in the minimum wage affects the ability to be affordable,” said Thistle.