Canadians want to stop tipping as Ontario restaurants struggle to survive

Summer tourism and a limping economy have put Toronto’s tipping culture in a grim spotlight.

Tipping is a staple of dining culture in Canada, as in the vast majority of bars and restaurants, workers who earn minimum wage rely on tips to make a passable income — especially in a city as pricey as Toronto.

The last few years have not been kind to GTA hospitality, with high operational costs showing a bleak endgame: the abundance of shuttered bars and restaurants dotting the urban landscape.

Beyond the intense demands of running a restaurant space, thin wallets of patrons have also been a key variable, as locations can’t sustain themselves, as would-be guests continue to maneuver an invasive cost-of-living crisis by staying in.

Now, with international visitors leaving the city after the FIFA 2026 World Cup, many of whom come from countries where tipping is less common, questions are being raised about the nature of tipping in the GTA — most obviously, whether it can sustain itself.

Afshin Mousavian is the CEO of Actual, a hospitality software company that manages tips for numerous hospitality clients across the region. Based on data collected on behalf of H&R Block, a staggering 67 per cent of Canadians want tipping to be completely abolished, citing that it has gone too far.

This sentiment is linked to the modern standard that has emerged in the last few years, as 18 to 20 per cent has become the new norm for a base tip to keep pace with inflation and low wages. However, since the cost of living is straining many people’s finances, this new standard (replacing the former 15 per cent) has driven many to a breaking point.

“One of the biggest challenges the hospitality industry is facing is: why do tips exist in the first place? Many great reports have come in that have blatantly stated that the economic structure in Canada is different from, say, Japan or Switzerland, where there are no significant alcohol markups to bars and restaurants,” Mousavian told INsauga.com.

Here in Ontario, hospitality locations face a ‘pour cost’ which inflates a beverage’s cost once it goes from LCBO shelves to your table, often by four or six times the shelf price. This, coupled with high food distribution costs driven by inflation, tariffs, and the hot-then-cold conflict with Iran (which has impacted fuel costs), has made going out more expensive.

However, according to Mousavian, even this on its own shouldn’t be enough to cause this modern hostility to tipping, as the invisible hand of the market has been hurting Canadian wallets on and off since, well, forever.

Instead, a quiet underlying issue he dubs “tipping fatigue,” which has very little to do with tipping in restaurants, is the key catalyst.

“Tipping has been rapidly occurring in places where, frankly, it shouldn’t exist. You shouldn’t be tipping your dry cleaners; you shouldn’t be tipping for getting your winter tires changed out for the summer, even going as far as certain coffee places where they are just grabbing a cup of coffee and pouring it in — that doesn’t demand tipping as we know it,” says Mousavian.

Mousavian further touches on the fundamental DNA of North American tipping culture, where if service is standard, a standard tip (the former 15 per cent, now 18) is left on the table — and if service is exceptional, the number goes up.

A practise that has seemingly been hijacked and is now appearing at dermatologist offices and after getting a sandwich at Subway.

“What people are uncomfortable with is that beyond these places traditionally never having had a tip culture, there is no established history of them being forthcoming with where these tips are going,” says Mousavian.

As for the operators who work in services where tipping is conventional, with nearly three-quarters of the country fed up with tipping, Mousavian was quick to state that Actual has done plenty of surveying on the other end of the serving tray, relaying how important this money really is.

“Nobody, and I mean nobody, is just expecting a handout — performance will always be true to tip earnings. Think of it like any other show; if a Tuesday matinee is bad, then audience members will stop coming. Hospitality has artistry in how you are served, and those moments merit what you leave behind,” says Mousavian.

Beyond the show, tipping also hinges on the quality of the food and drink provided; even if you are served a well-done steak with the biggest smile, if you asked for medium-rare, they still got your order wrong.

Tyler Rutherford, director of Toronto’s Waterworks Food Hall, which features major locations like Civil Works and the newly launched Bar Brant extension, knows firsthand that if you want people spending accordingly, you have to present value as well as a good atmosphere.

“Communication and conversation always go a long way, but if you want to add something more, you have to present surprising value to the guest, and not just as discounting,” Rutherford told INsauga.com. “You have to leave with your wallet not exhausted, while also having an emotional experience that has you saying ‘wow, I really can’t wait to go back there.’”

Even if bars and restaurants pull this off in perfect harmony, however, there’s no guarantee that it will remedy frustrations around tipping and make the industry more sustainable for patrons and proprietors alike, as numerous locations continue to shut down, citing ‘non-viable’ conditions.

A pressing concern for authorities like Mousavian, who knows firsthand just how much tips account for the total earnings of hospitality workers.

“It should be stressed that these tips are not a fun little bonus; these tips are how people can pay their rent. So if you go out, and go out knowing that you cannot tip accordingly, especially if the service is exceptional, you’re not paying that person to live where they can serve you.”

Mousavian further drives home the point that, unlike other industries, where a two-hour commute to the suburbs is common, hospitality is very different: these workers desire to be in the city to, in turn, spend at other neighbourhood restaurants while simultaneously keeping an eye on the competition.

As it stands, there is no perfect remedy for tipping fatigue, as numerous factors, well out of the hands of those who earn and pay tips, cause them to be stiffed in the first place. In the meantime, Mousavian states that as long as policy remains in place that doesn’t help the person paying for another round, it sure isn’t going to help the person pouring it.

“It’s a structure that has been set up by the governments that are failing us on a provincial and federal level.”