The financial integrity of numerous Canadian restaurants is under scrutiny as police and regulatory bodies investigate alarming reports of missing gratuities held in digital wallets. The complaints, which have surfaced predominantly from establishments in British Columbia but also from Alberta, have left many restaurant owners in distress, with estimates suggesting a multimillion-dollar loss.
Widespread Concerns in the Restaurant Sector
Ian Tostenson, the president and CEO of the British Columbia Restaurant and Foodservices Association, has expressed deep concern over the situation, revealing that over 50 restaurants have reached out to him in the past two days alone. He believes the problem may extend far beyond that number, predicting that “hundreds of restaurants” across Canada could be affected.
“It’s likely an across-the-country issue,” Tostenson noted, highlighting the urgency of the matter. Many restaurant owners have been forced to take out loans to cover the gratuities owed to their staff, a situation he described as “devastating” for the industry.
The Role of Everyday Payments
Everyday Payments, a digital payment processor, facilitates quicker and easier gratuity payments for restaurants. Funds deposited into these digital wallets are meant to be held in trust for employees. However, the recent complaints indicate that a significant amount of this money has gone missing.
Authorities from the Bank of Canada and the British Columbia RCMP are now investigating the situation. A spokesperson for the Bank of Canada confirmed, “We are aware of these concerns, and we are looking into the matter.” The Bank oversees payment service providers under the Retail Payment Activities Act, which mandates that these companies mitigate operational risks and safeguard users’ funds.
Financial Struggles and Uncertainties
Everyday Payments is a joint venture between Edmonton-based Everyday People Financial Corp. and Toronto’s XTM Inc. Recent financial statements from XTM highlighted serious concerns, revealing an accumulated deficit of £71.4 million. The report raised doubts about the company’s ability to continue functioning effectively.
In a response to inquiries, XTM’s CEO, Marilyn Schaffer, was reported to be unavailable due to legal meetings, with a representative indicating that Everyday People Financial would be taking over operational management of XTM’s Canadian operations by December 2025. This complicates the situation further, as the transition could potentially leave restaurants in a precarious position regarding their funds.
Ongoing Investigations
As investigations unfold, it has been confirmed that at least one case of missing funds has been reported to the Whistler RCMP, which is currently looking into the incident. Staff Sergeant Kris Clark stated that the investigation remains open, although no additional details will be shared at this time.
The potential repercussions of this situation could be severe, not just for the affected restaurants but also for the broader payment processing industry, which relies on consumer trust.
Why it Matters
The issue of missing gratuities touches on the very foundation of trust that restaurants have built with their employees and patrons. As many establishments grapple with the fallout from the pandemic, a crisis of this nature could further destabilise an already vulnerable sector. Swift action from regulatory bodies is essential to restore confidence and ensure that restaurants can fulfil their obligations to staff. This incident serves as a stark reminder of the complexities and risks associated with digital payment systems, underscoring the need for robust oversight in the financial technology landscape.
