‘Tipping recession’: Atlantic Canadian hospitality workers feeling the pinch

A new report finds that economic pressures mean people are not only dining out less; they’re also being less generous when it comes to tipping.

And hospitality workers in Atlantic Canada say they’ve noticed it firsthand.

“I find tipping and business has been down. I think people just can’t afford it right now,” said Sam Molloy, the manager at Whiskey’s Lounge in Dartmouth, N.S.

A couple of streets over, the owner of Chanoey’s Pasta says the drop has been striking.

“We noticed a difference since last year that tipping culture has been really decreasing. We saw like a 50 to 60 per cent decrease on tipping,” said Catherine Paulino.

The report found 60 per cent of Atlantic Canada’s hospitality workers said their tips have decreased over the past two years.

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Nationally, the figure was 67 per cent. Workers in Ontario were hardest hit, with 72 per cent of tipped workers reporting a decline.

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Meanwhile, 43 per cent of respondents said they rely on tips to cover essential expenses such as rent and groceries. This reliance was highest in Atlantic Canada and British Columbia, at 51 per cent.

“The tips definitely help with trying to keep up with the cost and those expenses as well,” said Molloy.

The survey was conducted online by pollster Angus Reid on behalf of Actual, a Toronto-based company that offers automated tip management and payroll systems for businesses. The online survey sampled 506 Canadian adults who currently work in the hospitality industry.

Actual’s CEO, Afshin Mousavian, says the industry is in a “tipping recession,” and that’s leading to reduced income for workers.

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“It’s important to understand that while consumers are frustrated that their bills have (an added) tip, those individuals, those employees, those businesses live in the same economy that everybody else does. So they’re also feeling the pinch,” said Mousavian.

The report also highlighted the importance of being transparent about how tips are divided.

Ninety per cent of respondents said they are aware of how tips are divided at their own workplace, with transparency being the strongest in Atlantic Canada at 96 per cent.

Last month, the province tabled amendments to the Labour Standards Code that included protections for workers’ tips and gratuities. The changes, which come into effect April 1, 2027, will “ensure tips and gratuities go to the people who earn them.”

No-tip policy

Some restaurants, however, are bucking the trend and eliminating tipping altogether.

The Bonfire in Halifax has a no-tip policy, and its co-owner says the approach is resonating with the community and has drawn a loyal customer base since opening last year.

“In place of tips, everyone gets paid $20 an hour and then half of the profits from the business gets split amongst the employees at the end of every pay period,” said Vincent Morley.

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“We feel like the responsibility of paying our employees properly should be on us as business owners and not relying on the generosity of people as they come in the door.”

Restaurant industry organizations say they’re keeping an eye on this trend but don’t expect tipping to go away anytime soon.

“It’s a big part of our culture,” said Natasha Chestnut with the Restaurants Association of Nova Scotia.

“And we know that (the) majority of diners, they’re still more than happy to tip for dining out experiences.”

Still, those who work in restaurants say they understand why customers are tipping less, but are hoping for some relief nonetheless.

“Everything is expensive right now, so it takes a toll on everybody,” said Molloy.