Toronto restaurant moves to profit-sharing model, eliminates tipping

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Another Toronto restaurant has adopted a no-tipping policy.

Woodhouse BBQ in North York, which serves traditional Chinese charcoal barbecue cuisine, has eliminated tipping as a way to thank customers who carried the establishment through the pandemic.

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Instead of tips, the restaurant is moving to a profit sharing model with front and back of the house staff.

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“Our staff will receive bonus from now on instead of tips,” the restaurant posted to their social media on Feb 13. “Tipping is no longer accepted.”

As Canada grapples with a cost of living crisis, reaction to the announcement on social media has been positive, with commentators noting they will now be visiting the restaurant more often.

“We do bookkeeping every month, and we do our profit sharing every three months, and part of the net profit goes to our staff according to work hours,” Hong Dai told CTV on Mar. 28.

The change hasn’t impacted menu prices, with meals like four BBQ lamb skewers going for $11.95.

On its website, the restaurant notes that customers who want to support it can leave a positive review and “spread the word.”

Dai also operates a nearby coffee shop, Another Land Coffee, which also doesn’t accept tips in favour of a profit-sharing model.

“We value connection over tips. Even before we announced the no-tipping policy, I always skipped the tipping option on the payment machine when I personally knew the customers and I always say, ‘You don’t need to tip your friends,’” Dai told CTV.

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A number of restaurants have made similar moves in recent years, such as Then & Now, an Asian-fusion restaurant in Toronto’s Queen St West neighbourhood, and Edulis, located at Niagara St. in Toronto, which creates Canadian dishes with wild and foraged foods and has been ranked among Canada’s best restaurants, including being named Canada’s #1 new restaurant in 2012 by EnRoute Magazine.

In January, Edulis introduced a 20 per cent service charge on prepaid experiences “enabling us to provide a fair and stable wage to our team of outstanding hospitality professionals.”

Toronto’s Beast Pizza also has a no-tipping policy and is a Certified Ontario Living Wage Employer. Richmond Station in downtown Toronto is another establishment that forgoes tipping. Co-owned by “Top Chef Canada” winner Carl Heinrich, the restaurant eliminated tipping in 2020 after increasing menu prices by an average of 18 per cent.

Heinrich told the Toronto Star the decision was made to provide employees with a more consistent income and enhance their access to more comprehensive employment insurance benefits.

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“As a system and a culture, when you look at it on a worldwide scale, tipping isn’t normal or expected in many parts of the world,” he said. “They don’t pay their staff less because they expect guests to pay their wages, which is what we have here. We have a system that seems normal, but just because we normalized it doesn’t mean it’s right.”

Canadians forced to ‘guilt-tip’

With many establishments now routinely offering tip suggestions on payment terminals, some reaching as high as 30 per cent, a January survey found that a majority of people feel compelled to leave larger tips than they previously did, a practice some refer to as “guilt-tipping.”

The idea is that customers tip more than they normally would due to feeling obligated or pressured, not because the service was exceptional.

The survey, conducted by the budgeting application Hardbacon, polled 513 Canadians and found that 65 per cent of respondents, influenced by card payment terminals, felt compelled to leave a tip they otherwise wouldn’t have and 62 per cent reported leaving more substantial tips than usual due to the same technology.

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Julien Brault, CEO and co-founder of Hardbacon, told the National Post that he noticed payment devices were programmed to suggest higher tip amounts and he wanted to see if this was shaping Canadian tipping behaviours or if the technology was nudging Canadians towards more frequent and increased spending.

Tipping in Canada often starts at 15 per cent, a rate that would be at the upper end in many countries. 

“If you get good service, you get 15 per cent and everybody’s happy and I thought maybe it had changed,” Brault said. “Seeing the data reassured me, (15 per cent) is more normal than I thought and it seems like the payment terminals are implying that people are tipping way more.”

Despite those findings, tipping practices in Canada remain more generous than in many other regions of the world.

According to a survey from TripAdvisor conducted last July, tipping 10 to 15 per cent is standard in Britain, while five per cent is acceptable in Greece. In France, gratuity is usually included in the bill (“service compris”) and in Italy, tipping is not customary.

The majority of Canadians, at least according to an Angus Reid poll from last year, would like to see more establishments follow the path of Woodhouse BBQ and others and do away with tipping entirely.

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The poll found that 59 per cent of respondents favoured a system in which service was included and employees got a higher base pay instead of tips — up from 40 per cent in a similar survey in 2016.

How much should you tip in Canada? 

According to the survey, sit-down restaurants averaged 15.14 per cent tips, followed by hairdressers and barbers (10.91 per cent,) meal-delivery apps (10.26 per cent,) Uber (9.40 per cent) and restaurants without table service (2.14 per cent).

In January, Post reporter Beatriz Silva found that expected tips can range from zero to 20 per cent for a number of services, including grocery delivery, hair appointments and hotel housekeeping.

As per Silva’s findings, here’s what’s mandatory — and what’s not.

Restaurant/Bar/Pub: Mandatory tip — minimum 15 per cent

Takeout: Mandatory tip — minimum 15 per cent

Uber: Mandatory tip — 10 to 20 per cent

Taxi: Mandatory tip — 10 to 15 per cent, cash preferred

Uber Eats/Food Delivery: Mandatory tip — minimum $5

Grocery Delivery: Mandatory tip — $5-$20

Massage: Mandatory tip — 10 to 20 per cent, but not if it is medically prescribed or covered by insurance

Hairstylist/Barber/ Beautician: Culturally expected tip — 15 per cent

Hotel Doorman: Culturally expected tip — $2-$5 

Hotel Bellboy: Culturally expected tip — $2-$5 per bag

Hotel Housekeeping: Culturally expected tip — $5-$10 per day

Coffee Shop: Optional tip — “keep the change”

Grocery Store: No tip needed

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