Canadians under gratuity pressure near tipping point: poll By: Gabrielle Piché Posted: 7:00 PM CST Friday, Feb. 24, 2023

Iryna Turetska’s hands circle a coffee cup.

CF Polo Park shoppers buzz around her, bags and phones in hand. For Turetska, novelty is in the air: it’s in the city of Winnipeg, which she’s occupied for a week; it’s in the shops, including the coffee place she just stopped at; and it’s in the tip prompt, which came up on the banking card reader as Turetska bought her drink.

Tipping hospitality services isn’t unheard of in her native Ukraine, Turetska said. However, she never felt obligated.

She spent extra money on a gratuity Tuesday.

“I don’t know. What is the courtesy here?” Turetska said.

It’s a question Canada seems to be grappling with.

A recent Angus Reid Institute survey found more than half of Canadians — 59 per cent — would do away with tipping, opting for a “service included” model where staff receive higher base wages and menu items or services are pricier.

The sentiment comes as 62 per cent of Canadians — including 63 per cent of Manitobans — report being asked to tip more money at the end of a transaction.

Sixty-one per cent of Manitobans believe they’re being asked more frequently; the number rises to 64 per cent when looking across Canada.

“Almost everybody has a tip option now,” Scott Marlow said, near a tailor shop in the Polo Park mall. He’d dropped off pants for alteration — and, yes, he tipped.

He didn’t remember leaving a tip the last time he visited a tailor, which was years ago.

“(There) was something weird the other day (at another business),” Marlow said. “They asked for a tip, and I was like, ‘Odd, but OK. You’re not really doing anything.’”

Canadians have reported tipping at places they might not have in the past, such as mechanic shops and beer vendors.

Marlow usually tips when asked — delivery drivers, gas station attendants, restaurant servers. He was in the restaurant industry for more than 20 years, he added.

“I made more in tips,” Marlow said. “Three times more than my salary, and that was forever ago.”

That was back when a 10 per cent tip was the norm. Now, a minimum suggestion might start at 15 per cent.

The average Canadian tip has been 20 per cent since Jan. 1, according to data from Square, a payment service platform. Pre-COVID-19 pandemic, the typical gratuity hovered around 16 per cent.

Roughly half of Kaylee Belluk’s wages come from tips.

She’s been a server for six years. Minimum wage, which many servers are paid, is currently $13.50 per hour in Manitoba. It’s set to increase to $14.15/hr on April 1.

“I just am always down to tip, because I know how it can be when that’s your extra source of income,” Belluk said.

She’s not opposed to the tipping model; gratuities are rewarding, she said. However, not receiving one, especially from a big group, means Belluk’s in the red on the table’s order; she tips out to kitchen staff at the end of her shift.

Belluk said she sees value in tipping and also in a model where servers are paid more hourly, with the gratuity baked into customers’ bills.

Twenty-one per cent of Angus Reid respondents reported leaving a tip of 20 per cent or higher when they last dined out.

Over three quarters — 78 per cent — no longer view tips as a way to show appreciation for good service. Seventy-three per cent believe it allows employers to underpay employees; 69 per cent said tips are the only thing making some jobs worthwhile.

Tips are what draw some to the industry, said Tony Siwicki, owner of Silver Heights Restaurant in Winnipeg.

“It pays for their rent, it pays for their bills, pays for their school,” he said. “They’re there to make gratuities.”

He likened servers to salespeople: they might turn on the charm for good tips.

Tipping out to staff behind the scenes is necessary, because a restaurant is a group effort, Siwicki said — the food can’t be shoddy and the place must be clean.

“With minimum wage going up, all the restaurants are trying to figure out how to survive that first hike,” he said.

Many eateries have changed menu prices and cut back on items as operating costs rise with inflation.

Meantime, there’s always the option to choose “other” when prompted on a tip screen, Siwicki said, adding his restaurant hasn’t changed its percentage options in years.

He disagrees with the “service included” model.

“We’re already seeing where it’s kind of tough to go out and spend money on a dinner,” Siwicki said. “Adding any more money to that bill will price people out of business.”

However, Leza Evenson doesn’t see much difference.

“You’re either way going to pay them,” she said, waiting for a dental appointment at Polo Park mall.

Either way, she’s eating out less — it’s too expensive, Evenson said. When taking her children for a meal, she opts for fast food, where tipping is less likely.

Forty-two per cent of Angus Reid respondents said tipping keeps them from going out.

“I barely tip,” noted Esosa Omoarukhe. “I feel like I spend so much money… I’m like… You guys make money already.”

Paying before getting service — such as tipping food delivery drivers — especially irks Omoarukhe, saying she’s had unpleasant experiences before.

“I always feel bad when the driver comes and is really nice” and she hasn’t tipped, she added.

Baked-in tips will make going out unaffordable for some, Omoarukhe stated.

“To me, it’s not surprising that people… are willing to consider the end of tipping,” said Michael von Massow, a University of Guelph food economy professor.

“There’s pressure to tip more and more percentage as cheques go up, so you’re getting almost a double whammy,” he said. “I think people are saying… ‘Enough is enough. Maybe we should pay people enough to work in these places.’”

“I think people are saying… ‘Enough is enough. Maybe we should pay people enough to work in these places.’”–Michael von Massow

Tipping in Canada has become a social norm, von Massow said. A shift to paying via card or electronically has made requests more “in your face” than choosing to leave a bill with the barber or change in the coffee shop’s tip mug.

“Rather than having this opt in option, now (businesses) are putting it on their payment machines,” von Massow said. “They’re causing us to opt out.”

The pandemic accelerated the tip creep, but it had already begun, he added.

“When you think back… service workers, in particular, they didn’t have the luxury or the protection of staying home,” noted Shachi Kurl, Angus Reid Institute president. “People wanted to tip more and had the means to tip more.”

Canada’s average inflation rate hit a 40-year high in 2022.

As a result, consumers are closing their wallets, Kurl said. “(They’re) starting to say, ‘No thank you, we can’t do that much that often.’”

Some businesses have switched to the no-tipping model, with heightened menu prices. The employees often end up unhappy, von Massow said.

Still, he believes a movement towards no tipping is growing.

Dana Lacdao is among the workers who view a tip as a job well-done. She’s been a hairstylist for five years.

“A tip is basically a bonus,” she said. “A sprinkle on the cookie, that’s how I view tips.”

She isn’t reliant on gratuities; neither is Parwinder Brar, a fellow stylist who makes $150 to $300 in tips weekly.

“I’m from a totally different culture, different country,” said Brar, who’s from India. “Over there, (a) tip doesn’t even matter.”

Tips also aren’t as important in much of Europe, von Massow said. Australian restaurant workers get paid more hourly and don’t rely on tips, he added.

Brar, like Lacdao and Belluk, see tips as tokens of appreciation: “It’s kind of just a nice gesture.”

The Angus Reid Institute ran its survey Jan. 31-Feb. 2, with 1,610 Canadian members of its online forum (including 125 Manitobans). As the survey was not conducted with a random sample of Canadians, no margin of error can be ascribed to the results.

gabrielle.piche@winnipegfreepress.com

Gabrielle Piché
Reporter

Gabby is a big fan of people, writing and learning. She graduated from Red River College’s Creative Communications program in the spring of 2020.

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