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SUN COLUMN: Government-run Tim Hortons losses worse than expected

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New data obtained by SecondStreet.org shows a government-run Tim Hortons in Ontario has racked up $1.7 million in losses.

Yes, you read that right. A government hospital in Ontario is running a Tim Hortons and has lost a large sum of money running one of Canada’s most successful fast-food chains.

Fortunately, there’s a lesson to be learned right across the country from this debacle as many other hospitals have lost money through their cafeterias and restaurants.

Patients should care about this issue as hospital restaurant and cafeteria losses ultimately mean fewer dollars available for health services for patients. (Note: This column examines food that hospitals sell to the public, not food that is provided free of charge to patients.)

Back in 2012, Postmedia reported that the Windsor Regional Hospital (Ontario) had lost a whopping $265,000 running its own Tim Hortons franchise.

That news story served as inspiration for SecondStreet.org’s 2020 investigation into losses at hospital restaurants and cafeterias nation-wide. We identified more than $12 million in losses over a two-year period; including $74,775 at a government-run Tim Hortons at  Windsor’s Hospital.

After the report came out, David Musyj, the CEO of Windsor’s hospital, wrote to the Toronto Sun and criticized the research. In his mind, the fact that one of his Tim Hortons franchises lost money wasn’t important as the other one it operated – located 4 km away – turned a slightly larger profit.

But if you had two Tim Hortons franchises – a profitable one and one that lost money – wouldn’t you shut down the latter so that you ended up with higher overall profits? It’s probably safe to assume that most people would say “yes.”

Regardless, new data from the Windsor Regional Hospital shows the Tim Hortons at its “MET Campus” lost almost $1.7 million from 2010-11 to 2018-19. A second Tim Hortons, at the hospital’s “Ouellette Campus,” has earned a profit since it opened in 2015-16. But if we combine the financials from the two Tim Hortons, as Musyj argues you should, they’ve lost money over the last four years for which data was provided.

Oddly enough, the financials for the hospital’s two Tim Hortons do not even appear to include rent and utility costs. The hospital informed SecondStreet.org: “Windsor Regional Hospital does not assign these costs to departments in the Hospital.”

One reason for the red ink appears to be labour costs. In 2012, media reported that unionized staff that served coffee at the facility were paid about $26 per hour (including benefits). Minimum wage at the time was $10. Now, however, the hospital maintains wage information is confidential. Oddly enough, other health bodies have had no problem releasing similar information.

There are a couple takeaways for hospitals across Canada in all this.

First, just like the bill from a leaky faucet adds up over time, so too do losses at hospital cafeterias – whether we’re talking in Windsor or other parts of the country.

Second, a solution to this problem can actually be found in Musyj’s letter to the editor. He notes that his hospital was able to earn some revenue by renting out some other space to businesses that sell food. Hospitals could shut down their money-losing restaurant operations and rent the space out to those who have expertise in this area.

Alternatively, we can all revisit this problem again in the future. It’s probably safe to assume patients would prefer the former.

Colin Craig is the President of SecondStreet.org. You can follow him on Twitter (@colincraig1) or email him at colin@secondstreet.org

This column was published in Sun newspapers (Toronto, Ottawa, Winnipeg, Calgary and Edmonton) on September 26, 2021)

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