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says McAdams from his home base in
Guelph, Ontario. "If I'm going to spend
$100 and I know I'm going to tip 15 per
cent, then I'm willing to spend $115
on this product. We can't find any
other instances of industries where
the consumer is allowed to deter-
mine where such a high percentage of
revenue goes."
And there are even bigger financial
liabilities that a restaurant assumes
when they choose to "tip-out" (or share)
the waiters' collected tips to the back
of house as a means of making wages
more equitable. "As soon as the restau-
rant takes any ownership of that money,
it's called a controlled tip," McAdams
explains. "They are legislated by the
CRA to hold taxes on that money. If
they're audited, they're responsible for
that tax money. We found only a third
of operators are doing that—and that's a
huge risk."
Restaurants Canada, with 4,000
members in B.C., still argues in support
of the current model. "I don't think
you're going to be changing tipping
culture," says Mark von Schellwitz, the
association's Vancouver-based vice-
president for Western Canada. "There
are some very good reasons why it
exists. Tipping encourages profession-
alism; it encourages wine and food and
service knowledge. And many of our
employees in the industry make a very
good living. They're motivated to take
care of customers through gratuities."
David Jones, meanwhile, argues that
other service industries don't seem
INCENTIVES
Restaurants Canada
vice-president Mark von
Schellwitz says tipping
leads to better service.