Business groups urge slowdown on Ontario's $15 minimum wage hike

The Canadian Centre for Economic Analysis says the number of jobs at risk would decrease by almost three-quarters if the $11.40 hourly rate is gradually increased over five years instead of the next 15 months.

Thestar.com
Sept. 27, 2017
By Robert Benzie

Another day, another doom and gloom report about the impact of hiking the minimum wage to $15 an hour.

The Canadian Centre for Economic Analysis says the number of jobs at risk would decrease by almost three-quarters if the $11.40 hourly rate is gradually increased over five years instead of the next 15 months.

"While the proposed changes will see $11 billion in wage stimulus flow into the economy in the next two years, a remaining $12 billion problem exists which will lead to jobs lost, added costs, and general damage to the Ontario economy," the report warned Wednesday.

It was commissioned by the fledgling Keep Ontario Working coalition, which includes the Ontario Chamber of Commerce, the Ontario Federation of Agriculture, Restaurants Canada, the Retail Council of Canada, and other business lobby groups.

Karl Baldauf, the chamber's vice-president of policy and government, said the rapid rise in the wage "poses great risk to our economy and cannot be resolved through offsets alone."

The report came one day after TD Bank estimated that raising the wage to $14 in January and $15 in 2019 could cost the province up to 90,000 jobs.

Labour Minister Kevin Flynn emphasized that "Ontario's economy is strong right now" and can absorb higher wage costs.

"We're experiencing strong economic growth, manufacturing exports are up, and businesses are hiring as a result. Despite this growth, we know that not everyone is sharing in the benefits," said Flynn.

"This is why our government - after extensive consultations with businesses, organized labour and workers' advocates - decided to take the bold steps needed to support workers and their families, and create more fairness and opportunity for all hard-working Ontarians," he said.

"Our economy created more than 30,000 jobs last month, and the unemployment rate is sitting at 5.7 per cent, the lowest level in more than a decade. Thanks to our strong economy, we're now in a position to move forward with positive changes for workers in Ontario."

Flynn noted that studies by the OECD, the U.S. Center for Economic and Policy Research, and the Canadian Centre for Policy Alternatives contradict such grim prognoses about the impact of higher wages.

But the province's independent Financial Accountability Office has claimed 50,000 jobs could be lost because businesses will have to lay off workers to cope with a rising payroll.