Canada’s tipping culture is flawed and there’s no clear fix in sight: experts

1:53:00FULL EPISODE: What’s your tipping story?

From oil changes to takeout, the “boost” has quickly become a “well-established societal norm” in Canada, according to food economist Mike von Massow.

Card payment machines have made it easy for businesses to offer a gratuity option, even in industries where tipping was previously not part of the cost or conversation. And data from Canadian trade associations shows that the average tipping percentage for restaurant meals has increased since the start of the pandemic.

Von Massow, who is also a professor at the University of Guelph, says Canadians are expected to increase the amount of their gratuities spins out of control and has become a hot issue across the country.

“I went to my local craft brewery the other day, just to the bottle store, to pick up a few cans of my favorites,” von Massow said. “When I was paying there someone literally took some beer from the fridge and gave it to me and I was asked to tip in that circumstance.”

He calls it a “double whammy” for consumers, with more businesses asking for tips while simultaneously raising their prices.

“You know, I started wondering if I’m giving a particularly good lecture, should I put a jar in the front of the lecture hall at the end, and while they’re going out? Maybe they could put some bills in there for me too I mean where does it stop?

International alternative

Kate Malcolm moved to Port Perry, Ont., in 2017 from the UK, where tipping isn’t common.

Five years later, she says she still struggles to understand tipping culture in Canada.

“There’s no way in England you’d give $10, $20, $30 to a hairdresser,” she said. “It’s so expensive to get your hair done like that, and then you have to tip them too? It’s such a foreign concept.”

Malcolm, who runs a podcast aimed at newcomers, included his reaction to Canada’s unwritten rules on tipping in a TikTok Video describing his “culture shock”.

A screenshot of Kate Malcolm in a TikTok video that includes her reaction to Canada’s unwritten rules for tipping. (Kate Malcolm/TikTok)

She says when her parents first came to visit, they also didn’t know what tipping expectations were in Canada, leading to an awkward exchange at a restaurant.

“They kind of just threw coins on the table, like maybe $2 and some change, and were like, ‘That’s all we do, right? I was cringing for that. I think to myself, that’s probably more insulting than not doing it [tipping].”

Malcolm has also lived and worked as a waiter in Australia, where tipping is also not the norm.

She said the pay was much higher than in Canada, and without expecting to tip, she felt less pressure to be “super nice” all the time.

Some customers outraged by tip prompt

Toronto’s Dough Bakeshop has added a tipping option to its card machines after feedback from employees and customers.

Co-owner Oonagh Butterfield says they’ve always had a cash tip jar at the counter, but saw a significant increase in tipping when customers were given a debit or credit card option to do so.

“I’ve had signs since we put it in place, being as clear as I can be, saying it’s not planned,” she said.

Portrait of Oonagh Butterfield, co-owner Dough Bakeshop in Toronto, Ontario.
Oonagh Butterfield, co-owner of Dough Bakeshop in Toronto, says some customers have expressed outrage at being asked to tip, even with signs posted in the store saying tips are not expected. (Photo by Dylan Park)

Despite displaying signs such as “to bypass the tip option, please press green,” according to Butterfield, some customers still question the electronic tip option.

“Sometimes there’s a bit of, I would say, outrage around even being asked the question, ‘would you like to tip?’ Especially if they’re just buying bread, which again is why I try to make people understand that it’s not a necessity.”

Although she currently has the option of tipping for customers, Butterfield says she supports abandoning the current tipping culture in Canada, “so that everyone can be guaranteed a living wage.”

No tipping equals increased prices to give staff a living wage

In July 2020, Toronto’s Richmond Station restaurant eliminated tipping, opting instead to raise prices to pay staff more.

Co-owner Carl Heinrich calls Canada’s tipping culture “a very unfair way to pay staff.”

The lockdown forced his business to start offering take-out food – historically a service that didn’t generate much tipping, he says.

“Any time you change someone’s salary or payroll, their livelihood, there’s a lot of communication involved,” Heinrich said. “Because there was no plan for this new system, there was a lot of work. And frankly, two years later, it’s still working.”

A photo of Carl Heinrich, co-owner of the Richmond Station restaurant in Toronto, Ontario.
Carl Heinrich is co-owner of the Richmond Station restaurant in Toronto. He says they removed tipping in July 2020. Instead, they opted to raise their prices to pay staff more. (Photo by Sarah Brownlee)

There is no fixed rate of living wage for Richmond station staff. Salary varies depending on a person’s performance, experience and position, he added.

“Dishwashers earn a living wage. Servers earn a living wage. But our best servers are certainly paid more than our least experienced servers. In the previous system, that was not possible.”

In an ideal world, there would be no tipping. It is a disaster for human rights. But it’s so deeply rooted. I think we’re stuck with that.– Marc Mentzer, Professor of Commerce, University of Saskatchewan

Aside from “very high-end” restaurants, where customers may not be as sensitive to how much they spend, says Marc Mentzer, a business professor at the University of Saskatchewan, many companies that replace tipping by service charge is not successful.

Customers like the illusion of having power over the server and the server likes the illusion of controlling the amount of their own income, he adds.

“In an ideal world, there would be no tipping. It’s a human rights disaster. But it’s so deeply rooted. I think we’re stuck with it.”

Marc Mentzer pictured sitting at a table with a drink next to him.
Marc Mentzer is a professor at the Edwards School of Business at the University of Saskatchewan. He says the card reader for electronic payment has changed expectations about how much, when and why to tip. (Submitted by Marc Mentzer)

Hefty pre-programmed tip percentage options on smart card machines can “frighten people into tipping a higher percentage than they would have ever considered before,” Mentzer added.

“Everyone complains about tipping, but given the choice between a restaurant with tip and a restaurant with a service charge, I don’t know how customers would make that choice. I think customers might actually prefer the approach tip if they had the choice.”