Ontario’s minimum wage hike is too much, too fast, and could cause job losses, business coalition warns

Moving to $15 an hour represents a 32 per cent increase in just 18 months and has firms worried about how to absorb the cost.

Thestar.com
July 10, 2017
By Kristin Rushowy

The government’s proposed minimum wage hike is too much too fast and could lead to job losses, warns a coalition of Ontario business associations as province-wide hearings on employment changes kicked off Monday in Thunder Bay.

“Notwithstanding the intent of the legislation, the pace of the changes is very difficult to absorb,” said Karl Baldauf, vice-president of policy and government relations at the Ontario Chamber of Commerce, who is also the spokesperson for the Keep Ontario Working Coalition.

“If you look at other jurisdictions that have implemented minimum wage increases, California took five years, Seattle four years to implement. In Ontario, it’s a 32 per cent increase in 18 months.”

Over the past seven years, minimum wage has gone up 12 per cent, he said, so with the coming jump in pay “any logical person could look at the viability of (businesses’) ability to absorb this,” along with other changes.

In January, the province’s minimum wage will go from the current $11.40 to $14, then to $15 in January 2019. After that, the formula will return to the current one, where the rate is tied to the consumer price index.

“We want every family to benefit fairly from Ontario's growing economy,” said a statement from Labour Minister Kevin Flynn. “But while business is expanding and creating wealth, not everyone is sharing in the benefits. We need to address the concerns of those who worry about falling behind, even as they work so hard to get ahead.”

He said experts agree that such changes are “good for workers and can be good for business, too.”

The coalition has hired a firm to study how the changes will affect businesses, and is saying the government shouldn’t act so hastily.

They have also sent an open letter to Premier Kathleen Wynne, “with a call for fairness and restraint” saying Bill 148 will “create tremendous uncertainty for Ontario businesses. Realistic legislative timelines can only be proposed following a full economic impact analysis.”

The group - which includes the chamber of commerce, Retail Council of Canada and Food and Beverage Ontario - also points to a recent study out of Seattle, where workers are said to have lost jobs and hours because of the pay changes.

In Thunder Bay on Monday, some 19 groups were scheduled to speak at the public hearing, including the local chamber of commerce and Poverty Free Thunder Bay. The local labour council also held a “solidarity breakfast” in support of the government’s move.

Earlier this month, some 53 economic experts from across Canada sent an open letter to Premier Kathleen arguing boosting the minimum wage “makes good economic sense” and could generate “substantial benefit to low-wage workers, their families and the economy as a whole.”

Under Bill 148, the province is also “mandating equal pay for equal work, and enabling at least three weeks’ vacation after five years with the same employer. With these changes, living standards will rise and reliance on benefits will fall as businesses pay more fairly. Higher wages will also lead to greater job satisfaction and productivity, less turnover and more spending power for lower-income earners,” Flynn said.