The provincial government has introduced legislation that will increase the current minimum wage by over 30% from $11.40 to $15.00 per hour over the next 18 months. Small business owners are expressing concern about the size and in particular the timing of the changes, as well as the unintended consequences of a $15 minimum wage.
Chamber members share the Government’s desire for broadly inclusive growth. However, in order to achieve this, we need to ensure that we are not risking job losses, rising consumer costs, and economic hardship as a result of over-regulation.
The Ontario Government’s announcement of the Fair Workplaces and Better Jobs Plan which proposes numerous changes to current labour and employment standards legislation will go to committee over the summer months. The recommendations include:
- Raising Ontario’s general minimum wage to $14 per hour on January 1, 2018, and then to $15 on January 1, 2019, followed by annual increases at the rate of inflation
- Mandating equal pay for part-time, temporary, casual and seasonal employees doing the same job as full-time employees; and equal pay for temporary help agency employees doing the same job as permanent employees at the agencies’ client companies
- Expanding personal emergency leave to include an across-the-board minimum of at least two paid days per year for all workers
- Ensuring at least three weeks’ vacation after five years with a company
- Updating employee scheduling rules, including requiring employees to be paid for three hours of work if their shift is cancelled within 48 hours of its scheduled start time.
The cost of all of these benefits will be borne by small business owners. We believe the government has not yet fully understood the unintended consequences of these changes. Chamber members have expressed their frustration and concern over rising costs and over regulation.
“It will impact our business cash flow and the costs will have to be passed on to the consumer. Because taxes with source deductions are going to be higher. We are not against an increase if it is done in increments and not as a total 32% increase over a short period of time,” commented Noel Lourenco, Boffo’s.
Many affected employers have told us that the $15 minimum wage and other changes will have the opposite effect of what the Government is looking to achieve. One small business owner told us that “Since higher costs for delivery will be passed down from the supplier to the merchant, it will result in inflation. I will be forced to pass the higher costs on to the consumer.”
We have also heard from members who say the impact will be felt throughout their businesses.
“If something isn’t done this dramatic and unrealistic increase may force us to close our doors after being a Kerr Street merchant for the last 18 years,” stated Dean MacLean, The Mermaid and The Oyster
Higher costs for employers will inevitably lead to higher prices for consumers. If the businesses cannot transfer these new costs to the consumer, employers will be looking to reduce overhead by cutting staff hours and possibly cutting the number of staff. This will reduce the job opportunities available to youth and other low-skilled individuals who need employment.
While we understand the commendable intentions of these proposals, it is clear that the government can’t legislate prosperity. Instead of creating more opportunity for workers, changes like these often have the opposite effect by reducing jobs and increasing the cost of living.
That is why the Oakville Chamber and the Chamber network with the Keep Ontario Working Coalition have called on the government to conduct a comprehensive economic impact analysis.
As the provincial government moves this legislation through the committee process over the summer we urge them to truly understand the economic impact of these changes that have great potential to hurt job creation, consumer costs, and economic growth.
How will a $15 minimum wage affect your business? Let us know: [email protected]