Ontario Minimum Wage Rises to $17.95 in October: What's the Real Cost for Restaurant and Retail Owners?

Ontario's minimum wage is going up again—how much this time?

Ontario government officially confirms: as of October 1, 2026, Ontario's general minimum wage rises from $17.60 to$17.95/hourIncreased by $0.35, a 1.99% rise, based on the Ontario Consumer Price Index (CPI) automatic adjustment.

That number sounds small, but if you run a restaurant with 10 employees, factoring in wage compression, the actual extra cost could be a year's worth of$12,000 to $15,000For businesses with already thin profit margins, that cost is hard to ignore.

What does this mean for your business? Let's run the numbers.

Suppose you run a typical Chinese restaurant with 10 minimum-wage employees (kitchen helpers, servers, dishwashers).

But that's just on paper. The real big item isWage Compression EffectExisting employees earning $18 to $20 per hour will also demand raises when the minimum wage increases. Industry experience shows that for every $1 increase in minimum wage, actual total wage costs may rise by $2. So, you could end up spending an extra$12,000 to $15,000。

According to Restaurants Canada, frontline labor now accounts for 33–36% of independent restaurant operating costs (compared to 29% pre-pandemic). The typical Toronto restaurant net profit margin is only 3–5%. This wage increase will effectively eat into your20–40% of net profit。

Is there a government grant to offset this expense?

Yes. And there are some grants that Chinese business owners often don't know about.

Canada-Ontario Job Grant (COJG) — the most worthwhile to apply for

This is a training subsidy jointly offered by the Ontario and federal governments. Small businesses (under 100 employees) can apply, and the government can coverUp to 83%of training costs.

A restaurant can easily get this by training 2-3 employees.$20,000 to $30,000 in training grants, more than enough to cover the extra cost of the wage increase.

Ontario Digital Main Street — Digitalization Grant

Maximum$2,400Micro-grants can be used to build a website, launch an online ordering system, or do digital marketing. Suitable for restaurant owners who want to use WeChat mini-programs for ordering and reduce front-of-house staff.

⚠️ Note: The federal CDAP Digital Adoption Program (the one that previously offered $2,400 micro-grants and $15,000 technology grants)Already ClosedDon't waste time applying.

Minimum wage comparison across Canada

Ontario's current minimum wage ranks second in Canada (behind BC and federal standards), far higher than Quebec and Manitoba. This means labor costs are indeed higher for doing business in Ontario—but also means you need to leverage grants more.

Beyond applying for grants, what else can you do?

1. Adjust Menu Prices:A 2–4% menu price increase is barely noticeable to customers but can absorb a significant portion of costs.
2. Streamlined Menu:Reduce SKUs, streamline kitchen prep, and run with one less person.
3. Cross-Training:Let one employee do the work of two. COJG can cover training costs.
4. Digitalization:Launch QR code ordering, reduce one server, Digital Main Street pays $2,400.
5. Optimized Scheduling:Use scheduling software to find idle time and reduce unnecessary hours.

Frequently Asked Questions

Is minimum wage before or after tax?

Before tax. $17.95 is the pre-tax wage. Your take-home pay will be lower depending on your tax situation.

Student wages are $16.90 — can I hire a lot of students?

There are restrictions. The student must be under 18, work no more than 28 hours per week, and attend school during the term. This rate only applies during summer and holiday periods, not year-round.

Is the COJG application difficult? What is the approval rate?

COJG is a rolling grant program with no cap on applicants. The key is that training must be delivered by a third-party provider (not yourself) and must be business-related. We recommend working with your local Small Business Enterprise Centre for the application. Glow Pacifier Consulting can also help connect you with suitable training providers and prepare application materials.

Is it still worth applying for COJG now?

You still have time. COJG is an ongoing program with no deadline. It's recommended to complete at least one round of training applications before the wage increase takes effect to secure the grant.

Will Customers Leave If Prices Rise?

Not all will leave. Everyone is raising prices. Overall Canadian food prices have risen 3-5%, and consumers have gotten used to this increase. The key is to raise prices all at once, not month by month.

Frequently Asked Questions

Q: Is the minimum wage of $17.95 before or after tax?

Before tax. $17.95 is the pre-tax wage; the actual amount you receive depends on your personal tax situation.

Q: How do I apply for the COJG training subsidy? Is it difficult?

Submit your application through the Ontario Job Grant (COJG) website—approval must be obtained before training begins. For small businesses (under 100 employees), the government can cover 83% of training costs, up to $10,000-$15,000 per person. No cap on applicants, rolling intake. We recommend working with your local Small Business Enterprise Centre for assistance.

Q: Besides COJG, what other grants can help restaurant owners?

Ontario's Digital Main Street offers a $2,400 digital grant for online ordering systems and website development. Ontario's Starter Company Plus provides a $5,000 startup grant. The federal CDAP is now closed—do not apply.

Q: Can the student wage of $16.90 be used indefinitely?

No. Restrictions: under 18 years old, max 28 hours per week, only during school breaks or summer holidays. Cannot replace full-time employees with student wages year-round.