first reading: canada's subsidized tim hortons lose another $500,000
operating out of windsor regional hospital, they're likely the country's only tim hortons consistently losing money
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two tim hortons locations that have the rare distinction of being taxpayer subsidized are now losing money at a rate of more than $1,000 per day, according to new documents obtained by the free market think tank secondstreet.org.
the two tim hortons are operated by windsor regional hospital, and as per new financial reports obtained in a secondstreet access to information request, the locations collectively lost $487,662 in the 2023/2024 fiscal year.
that’s the equivalent of about $1,336 per day.
to put it in tim hortons menu terms, that’s a daily shortfall equivalent to 645 large double doubles.
or, to put it in health-care terms, windsor regional hospital could fund about three heart transplants with the money it’s losing each year on donut and coffee sales. the canadian institute for health information currently pegs the cost of a heart transplant at about $140,000.
and it was even worse the year before, when the windsor regional hospital tim hortons posted losses of $500,931 in the 2022/2023 fiscal year.
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all told, according to an analysis by secondstreet.org, the two money-losing tim hortons have represented a net drain on the hospital of more than $2 million since hospital administrators first went into the donut business starting around 2010.
secondstreet.org has been closely following the travails of the two windsor tim hortons since 2020, when the two donut shops featured heavily in a report they prepared on money-losing hospital cafeterias.
the organization profiled 74 canadian hospitals, and found that they were collectively losing between $5 million and $6 million per year in unprofitable cafeteria operations.
the report was a comment on the inefficiency of the canadian health-care system, arguing that “when hospitals lose money through selling food and beverages to the public, those dollars cannot be used to pay for services that help patients.”
ever since, secondstreet.org has provided regular updates on the worsening fiscal situation of the windsor tim hortons, deeming them a particularly “baffling” example of hospital mismanagement. “at some point, you have to reach a breaking point where you say ‘enough is enough,’” said secondstreet president colin craig after their 2023 update.
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losing money is generally hard to do at a tim hortons. the franchise has approximately 4,000 locations across canada, and in recent months sales have been doing better than anticipated even as the country is at risk of falling into a recession.
just last month, tim hortons’ parent company — restaurant brands international inc. — posted higher-than-expected earnings due almost entirely to tim hortons “outperforming the market,” in the words of chief executive joshua kobza.
windsor regional hospital could conceivably be home to two profitable tim hortons if they simply leased space to a private franchisee who ran the locations independently.
that’s already the case for both a subway and an armando’s pizza operated on the windsor regional hospital campus. the two locations, operated by independent franchisees, appear on hospital financial statements only in terms of the rental revenue they bring in each year. in 2023/2024, the two restaurants represented a net gain to hospital finances by bringing in $48,844 in lease payments.
as to why hospital administrators insist on running the two tim hortons themselves, it’s reportedly due to a long-ago agreement with unifor, whose members constitute the hospital’s food services staff.
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“years ago, we were able to contract out the main cafeteria services to the private sector on the agreement with the union that the tim hortons operation would remain under the collective agreement,” the hospital’s then ceo david musyj told postmedia in 2023.
this is also the singular reason the locations are so unprofitable. instead of paying the entry-level wages typical to a tim hortons, windsor regional hospital is paying its tim hortons employees at the same rate as unionized hospital workers.
secondstreet.org also requested the wage scale in its latest access-to-information request for the windsor hospital tim hortons, which revealed that the starting wage at the locations is $23.26 per hour, including benefits — the standard rate for a “retail server” under the unifor agreement.
wage rates for the two tim hortons operated by windsor regional hospital.
via secondstreet.org
and the rate is higher if the tim hortons employee is hired under the classification of “cafeteria aide”; that’s $31.50 per hour, including benefits, rising to $32.12 after one year.
for context, a standard ontario tim hortons would have its base wages set by the current ontario minimum wage of $17.20 per hour.
the curiously poor finances of the windsor hospital tim hortons have been making headlines since 2012, when windsor regional hospital said it was considering slashing hours at its onsite cafeterias in order to account for the $265,000 in yearly losses that the tim hortons was generating.
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at the time, the hospital only operated a tim hortons at its central “metropolitan” campus. but in 2015, they would open a second tim hortons location at its ouellette campus.
although the ouellette location was briefly able to turn a profit, it has now lapsed into losing almost as much money as the original.
in the 2023/2024 fiscal year, the metropolitan campus tim hortons lost $297,400 to the $190,262 lost by the ouellette location.
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