Province tries to allay business fears over minimum wage hike

Queen's Park is moving to ease businesses' fears over the forthcoming increase to the minimum wage with a new package of measures aimed at offsetting the impact of the change.

Thestar.com
Sept. 28, 2017
By Robert Benzie

Queen's Park is moving to allay businesses' fears over the forthcoming increase to the minimum wage.

Labour Minister Kevin Flynn said the government will soon unveil a package of measures to offset the impact of the $11.40 hourly wage rising to $14 in January and $15 in 2019.

"We know this is challenging for small business - we don't underestimate that challenge," Flynn told reporters Thursday at Snakes and Lattes, a College Street cafe.

"If government and business can work together, we can get this right," he said.

"You look at things like taxes, you look at things like regulations, you look at things like the employer health tax - you look at those types of things. So I think if there was going to be any sort of relief it would be amongst the existing channels between government and business."

His comments came the same week as TD Bank warned that the wage hike could cost the province up to 90,000 jobs and the Canadian Centre for Economic Analysis recommended slowing down the phase-in of the increase to protect employment.

The province's independent Financial Accountability Office estimates 50,000 jobs could be lost because businesses will have to reduce staff to handle soaring payroll costs.

"They're a forecast, they're a guess, and you see the guesses are all over the place. They're all over the map to be blunt," said Flynn, noting research by OECD, the Center for Economic and Policy Research in the U.S., and the Canadian Centre for Policy Alternatives that urge a higher minimum wage.

"I haven't seen anything that would steer me away from the current course that we're on. I want to make sure that everybody who works a week's work in Ontario is able to raise a family, is able to afford the basics," he said.

Ben Castanie, owner of the three Snakes and Lattes board game cafes, said his 100 workers, who are already paid more than the current minimum wage, will be getting a well-deserved raise.

"We have a little bit of catching up to do," said Castanie, adding he does "not necessarily" think he will need to raise his prices to afford the higher wages.

"It could be a great thing for us if everyone makes more money and has a little bit more disposable income. It's definitely beneficial to us," he said.

Not all businesses are embracing the changes.

Peter Gossmann - co-owner of Plasticap, a plastics injection molding company in Richmond Hill - said he worries about the effect on the overall labour force, not just minimum wage earners.

His firm's 35 unionized employees are members of Unifor and earn at least $15.80 an hour.

"It will inflate all of the wages. It seems to me that ... the government wants to increase ... wages to increase their taxes," said Gossmann, noting the provincial treasury stands to benefit most from higher salaries.

"So it's a windfall for the government. It's going to contribute to inflation. Inflation contributes to higher interest rates and that stifles growth."