Tim Hortons coffee shops losing money as employees earn $28/hour

Nadine Bells
Daily Brew

Tim Hortons locations at some hospitals are losing money - taxpayer money - because they are paying employees far more than employees make at other locations .

At St. John's Health Sciences Centre, Newfoundland's largest hospital, Tim Hortons lost $260,000 last year. It's the fourth year in a row that the beloved Canadian coffee chain failed to make a profit.

People are still lining up for coffee and treats,  but the loss is due to the money going out.

While most Tim Hortons in the country employees start at minimum wage, those serving coffee at the hospital were making $28 an hour - that's $20 an hour plus employer costs and benefits - which devoured any possible profit margins.

"Let me tell you why [the hospital franchise loses money]," Vickie Kaminski, Eastern Health's president and CEO, told reporters on Tuesday. "We charge you a buck-ninety-four for that large coffee, but we insist that the staff who are pouring the coffee are Eastern Health staff, and they get paid $28 an hour. No Tim Hortons pays that."

The Timmy's outlet opened in 1995 with the expectation that it would earn enough profit to cover the salaries of at least seven nurses. It has yet to come close to that predicted profit.

The story is the same in Windsor, where Reginal Hospital's three Tim Hortons are losing $265,000 a year because of employees' higher-than-average $26-an-hour wages.

The hospital owns the coffee shops, meaning that the Tim Hortons are funded by provincial healthcare dollars. The money being lost is taxpayers'.

Tim Hortons might be costing Canadians money, but at least they come in handy sometimes. At the Royal Columbian Hospital in B.C. last March, the in-hospital Tim Hortons became a makeshift ER thanks to massive overcrowding.

Earlier this month, Tim Hortons reported higher first-quarter earnings than last year, but because of higher operating costs, the profit still fell short of market forecasts.

(CP photo)