Is It Time to Ban Tipping?

Is it time to end tipping in Canada?

The landscape of tipping has changed dramatically in recent years.

With “tip creep,” a growing number and range of businesses are prompting customers for tips, while “tipflation” means suggested tips keep rising.

As many workers struggle to get by amid a cost-of-living crisis, these trends help boost overall take-home pay.

The story doesn’t end there, however.

Tipping and tipflation signal a growing shift in responsibility for workers’ pay from employers to customers, with significant consequences like income volatility and workplace inequity.

The spread of tipping isn’t the best way to help workers make ends meet.

Instead Canadians should consider a bold alternative: banning tipping and replacing it with a living-wage floor, ensuring decent wages for all workers and transparent pricing for customers.

The shifting landscape of tipping in Canada

Where tipping was once common in a small number of businesses like full-service restaurants, customers are now seeing tip prompts at their local coffee shop or in coffee chains like Starbucks, as well as a growing number of fast-food or fast-casual restaurants like Subway.

Customers report tip prompts in a host of other contexts, including U-pick farms, graduation dress pickups and liquor stores. Fifteen per cent used to be the default for good service in a restaurant, but many prompts now start at 18 per cent and can reach 30 per cent.

Recent surveys find Canadians are not only experiencing tip creep and tipflation, but increasingly looking for alternatives.

A 2023 Angus Reid survey found a marked shift in public sentiment away from tipping since 2016, with 59 per cent preferring a model with higher wages and service included, compared with 32 per cent preferring a tipping model.

In a 2025 H&R Block survey, 91 per cent of participants favoured a shift away from tipping toward employers paying their employees better wages.

Yet customers’ growing discomfort is only part of the story.

While tipping boosts workers’ overall pay compared with a minimum-wage floor, research is increasingly highlighting its negative aspects.

Customers’ control over whether, or how much, to tip means that workers’ incomes become more unpredictable and can vary based not on the quality of their work, but on factors like their attractiveness or the nature of their customers.

Some workers have to decide if accepting inappropriate or disrespectful behaviour is worth earning bigger tips.

Tipping can also create friction among workers, including competition among staff who receive tips for more lucrative opportunities and conflict over tip sharing with non-frontline workers.

More broadly, the increasing reliance on tipping may mark a fundamental shift in who is responsible for workers’ welfare from employers to customers, risking further erosion of working conditions.

With the exception of a modest reform in Quebec, policymakers have paid little attention to these tipping trends, despite governments’ long role regulating tipping through employment standards legislation.

From tipping to a living wage?

It’s time to contemplate a bolder step: ban tipping and raise minimum wages to at least the level of the local living wage. Living wages aim to ensure that workers are paid enough to have a reasonable standard of living based on local costs.

In Vancouver, the living wage is $27.85 an hour, compared with the minimum wage of $17.85.

Tipping could be banned in several ways, such as barring businesses from encouraging or collecting tips. Employers could raise prices to cover wages.

Several Canadian businesses have adopted aspects of this model over the years, even in industries where tipping is the norm.

These include Waterloo-based TWB Brewing and Odd Duck Wine & Provisions, Toronto-based Barque Smokehouse and Vancouver’s Cowdog Coffee and Folke restaurant.

While no compensation model is perfect, this living-wage model may be preferable to businesses opting to keep wages low and ask customers to subsidize them through tips.

A shift to the living-wage model aligns with changing public sentiment calling for an end to tipping and a shift to higher wages for workers. It reduces income volatility, vulnerability to customers and conflict among workers. Perhaps most fundamentally, it moves our society back in a direction where the onus is on employers to pay decent, livable wages rather than asking customers to fill the gaps created by low wages.

Some may raise concerns about the practicality of this model.

Legislative efforts to ban tipping in the United States were all eventually repealed for reasons including employer resistance and the fact that many customers continued to tip and workers continued to solicit tips. Tipping can become a powerful social norm. Once some people begin tipping, whether to boost their status or secure better service in the future, others increasingly feel the pressure to follow suit.

These norms, however, do not develop in a vacuum. Businesses can influence whether to allow and encourage tipping.

With the rapid spread of payment by credit and debit cards — the Bank of Canada found that only a fifth of payments were made with cash in 2023 — it is easier to ban tipping now because the vast majority of transactions take place through payment portals that don’t return change to customers.

Customers may be less interested in tipping if they are aware that workers’ baseline pay is a living wage. To be sure, some customers may be tempted to offer tips when paying with cash, so public education and notices of the new policy will be needed.

Another concern is potential hardship for businesses and highly paid tipped workers, like some servers in high-end restaurants.

While many businesses have been trying to shift away from tipping over the decades, going it alone is challenging. Customers often balk at higher prices, and highly paid front-of-house staff may be tempted to seek work with competitors where they can collect tips. Many businesses that try to end tipping practices end up reverting, such as Toronto’s Beast Pizza and Parksville’s now-closed Smoke ’n Water.

However, a universal living-wage model would create an even playing field, making it easier for businesses to increase prices and pay a living wage, while customers would no longer have to tip. Additionally, there are potential benefits for businesses, including reduced compliance costs, fewer risks tied to managing tipping regimes and an ability to focus on consistent service for all customers.

Under a living-wage model, many low-wage workers would benefit from higher pay and more stability, though some workers who receive high tips may see at least a modest reduction in overall pay. These reductions could be partially offset through transparent, well-designed bonus systems.

The living-wage model would give workers several additional benefits, like reducing some of the tensions and rivalries among workers that often accompany tipping. Raising the wage floor to a living wage could help increase workers’ bargaining power, while giving businesses an incentive to support public policies in areas like housing and child care that reduce living costs for workers and, thereby, reduce upward pressure on the living-wage levels they must pay.

A final concern relates to customer choice.

While a majority of Canadians appear to want to ditch tipping, a minority prefer the status quo and may feel that a ban on tipping encroaches on their freedoms. But the pressures of tip creep and tipflation mean that the majority can’t shift tipping culture through individual action, necessitating broader public policy intervention. Furthermore, the overall benefits accruing from shifting away from tipping to living wages may be more important than preserving the option to tip.

As Canadian workers grapple with a cost-of-living crisis, tipping is increasingly being used as a way of topping up workers’ pay. An ever-expanding tipping culture, with all its side-effects, is not inevitable, however.

Policy action to ban tipping and enact a living wage could help short-circuit these trends and contribute to a fairer economy. To navigate the complexities of such a transition, stakeholder consultations like a Fair Wages Commission could be convened to define the implementation strategy, ensuring the perspectives of workers, businesses and customers are represented.

Tip creep and tipflation have galvanized public opposition, and this may be the moment to move toward transparent pricing for customers and a more worker-centred compensation model.