Ontario employers looking for relief with PCs in power

Move could spell revisions to minimum wage, income tax, Bill 148
By Marcel Vander Wier
|Canadian HR Reporter|Last Updated: 07/05/2018
Doug Ford
Doug Ford, premier-designate of Ontario. Credit: REUTERS/Carlo Allegri

On June 7, Ontario voters ushered change into Queen’s Park in Toronto, with the Progressive Conservative (PC) party, led by Doug Ford, winning a majority government.

“A new day has dawned in Ontario,” Premier-designate Ford said in his victory speech to supporters. “A day of opportunity, a day of prosperity and a day of growth.”

The businessman from Etobicoke, Ont., campaigned on a platform promising to boost the provincial economy while reducing the cost of operations.

His plan included a slowdown in minimum wage hikes legislated to reach $15 in 2019, cuts to red tape, and a reduction in hydro rates, corporate tax rates and personal income tax.

While it will take time for the government to change over and implement policy, Ontario employers are encouraged, according to Rocco Rossi, president of the Ontario Chamber of Commerce in Toronto.

“This is a time of significant anxiety — not just because under the prior administration, costs increased considerably and tax burden and regulatory burden, but also the anxiety around the NAFTA discussions,” he said.

“That’s been compounded by... a U.S. president exploding on Twitter and then sending out verbal hit men on TV to attack the  prime minister. Just outrageous behaviour that should be cause for concern for all Ontarians and all Canadians.”

“We take great encouragement simply from the philosophy and culture change — a province being open for business — because, quite frankly, many of our members were feeling quite demonized — that it is almost a bad thing to be a businessperson,” said Rossi.

“There’s no question that, as with the majority of Ontarians, the business community was looking for change.”

Thousands of small and medium-sized employers are looking forward to the changeover, said Joe Martin, director of Canadian business and financial history at the University of Toronto’s Rotman School of Management.

“The business community needs a lot of reassurance right now after 15 years of a nanny state government,” he said.

“Some of the larger enterprises will have some trepidation just because they are a lot more sophisticated than Mr. Ford, but I’m sure they’re prepared to say, ‘Well, let’s wait and see.’”

Business-friendly policy

One of Ford’s major campaign tenets was to create more jobs for Ontario by sending the message that the province is open for business.

“Government doesn’t create sustainable jobs on its own,” his campaign platform stated. “What government can do, however, is create the conditions that make it easier to start a business, grow a business or invest in Ontario.”

To accomplish this, Ford has promised to lower the corporate tax rate from 11.5 per cent to 10.5 per cent. He also pledged to alleviate the skills gap by increasing access to apprenticeships and reforming the foreign credential recognition process.

The broad strokes set out in Ford’s platform are encouraging for employers, said Rossi.

“He’s made some statements with respect to reduction of corporate taxes — both the general rate and the small business rate,” he said. “He’s talked about a further reduction in the hydro costs, which is a huge input cost for many of our members and therefore very well-received and anticipated.”

Recent corporate tax reform south of the border removed any advantage Ontario may have held previously, said Rossi.

“(Ford has) also called for a slowing down — not a rollback — but a slowing down of the next jump in the minimum wage to allow for the business community to better absorb what’s already happened,” he said.

“All of those things are positive.”

The new government’s first actions will likely be to lower hydro and corporate tax rates to indicate the province is indeed open for business, said Scott Allinson, vice-president of public affairs at the Human Resources Professionals Association (HRPA) in Toronto.

“Those seem to be the priorities of where they’re going.”

Ford will recall the legislature for a brief summer session shortly after he officially becomes premier on June 29 in order to enact some of his main campaign promises, according to media reports.

Reviewing Bill 148

A minimum wage increase from $11.60 to $14 per hour has already been legislated to take effect in the province as of Jan. 1, 2018.

But the road to $15 is expected to slow under Ford, with increases potentially lowered to 25 cents annually or tied to inflation.

The premier-designate has also promised to remove the burden of income tax from minimum-wage earners.

While minimum wage was a major discussion point in the PC platform, it remains to be seen what the new government’s stance will be on other portions of recently implemented Bill 148, the Fair Workplaces, Better Jobs Act,  and Bill 3, the Pay Transparency Act, said Allinson.

“We’re waiting to see in the first 100 days if there is any indication that they are going to make any changes, besides not implementing the minimum wage to $15,” he said. “(Bill) 148 will need to be re-opened up. In regards to any other workplace regulations, there’s been no indication to us… of what they’re going to look at.”

A more thorough review of Bill 148 may be in order, as labour costs are not related to minimum wage alone, said Rossi.

The legislation stemming from the provincial Changing Workplaces Review contains a series of legislative items that have led to greater complexities and costs for employers, he said.

“Since the PCs will have to reopen (Bill) 148 in order to change the increased pace to $15, I think it also represents an opportunity for employers to input on changes to some of the rest.”

The recent reversal of public holiday pay rules — in which the Ontario Liberal government reverted back to previous pay standards until further study was completed — serves as an example of why such change could be necessary, said Rossi.

“We have to look at that — the sick days, the holiday provisions — to make sure that we can reasonably absorb these costs.”

The potential of government policy change or reversal is simply “the nature of the beast” when it comes to human resources, said Allinson.

“Our members… are used to it. They’re highly adaptable. But it’s not the best situation, especially when you have something just as fresh as (Bill) 148 and Bill 3 on pay transparency getting passed.”

Advice for HR

HRPA will monitor the Ontario government’s activity and lobby that any legislative changes affecting the workplace are both practical and easy to implement, said Allinson.

If necessary, HR practitioners should send along ideas and feedback on Bill 148 to the Ontario Chamber of Commerce to lobby the new government for change, said Rossi.

“The businesses themselves are the experts,” he said. “They’re living the reality and we need to hear from them.”

More broadly, the election of the PC party by a large majority of Ontario voters should remind HR professionals that citizens and workers find it difficult to rally behind leaders who flaunt their intelligence and power, said Martin.

“It’s not restricted to one party or one level of government, but it’s a characteristic people don’t like in their politicians,” he said.

“The hard fact of the matter is, this is about people. You’ve got to treat them well... That’s the difference between a successful organization and an unsuccessful one.”

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