I think the much more obvious point was that you generally only tip (and therefore would see a tip popup on the POS) at places where the tips really are an important part of their take home. I don't think that line of thinking is erroneous. Where I'm located in one of the provinces, until only recently places could pay subminimum wage to service staff under the assumption that it was covered by tips.

I dont know about Canada, but here in the US people often misrepresent these provisions. i.e "places could pay subminimum wage to service staff under the assumption that it was covered by tips" in the US a place can pay submimimum wages provided the over all gross pay IS MORE than the minimum. Not the "assuming it will be" it has to actually be counted, and be paid more than. If not the business has to make up the difference

This is one (in part) to incentive the business to ensure their workers are reporting their tipped income, it is not uncommon for people to try to evade taxation by not reporting tipped income