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Money problems aren’t at a minimum

Ontario’s minimum wage fight won’t go away as wage floor trends upwards in other provinces
compensation, payroll
Ontario Premier Doug Ford waves during his unofficial swearing in ceremony in Toronto on June 29, 2018. REUTERS/Carlo Allegri

By Jeffrey R. Smith

Who would have thought a few dollars here and there would be the cause of such a battle? Well, when it comes to money, never underestimate the desire to fight for every cent.

When it comes to the legal minimum wage, those few dollars can add up — in favour of workers and to the detriment of businesses — and it’s been the cause of much bellyaching — and kudos. Ontario’s former Liberal government under then-premier Kathleen Wynne caused quite the kerfuffle last year when it announced changes to Ontario’s employment standards legislation through Bill 148 — including a graduated increase of the province’s minimum wage.

At the time, the minimum wage in Ontario sat at $11.40 per hour. Bill 148 raised it to $14 per hour on Jan. 1, 2018, and it’s scheduled to go up again on Jan. 1, 2019, to $15 per hour – tied for the highest minimum wage in Canada.

Of course, labour and other advocacy groups lauded the move, pointing to evidence that low-wage workers often struggled to get by and any improvement in compensation would raise their standard of living as well as increase their purchasing power. They have a point, as it’s clear there is a problem with the low-income standard of living, and the difference between the poor and the rich seems to keep getting wider.

However, business groups decried the changes, saying it was too much, too fast for businesses to cope with. The initial jump on Jan. 1 amounted to an increase of more than 30 per cent to the pay floor, with only a year until another $1-per-hour jump. Employers said this would hurt their bottom line too much and the result would be fewer full-time jobs and an increase in unemployment overall, not to mention pushing some small companies out of business.

No surprisingly, when the first minimum wage hike came into effect this past Jan. 1, controversy accompanied it. Some businesses were caught trying to get around the wage hike by taking away paid lunches and breaks or cutting benefits — Tim Hortons, anyone? — to offset the cost of the wage hike. And the provincial government vowed to go after employers did such things.

But times have changed. There’s been an election since then, and now there’s a new sheriff in town — and one who doesn’t seem to like to follow the rules. Doug Ford’s Progressive Conservative government took power this summer, and they’ve been busy. Business advocates seem think they can get the new provincial government to claw back the minimum wage hike that’s scheduled for just over three months from now. The Ontario Chamber of Commerce is lobbying the government to repeal Bill 148 — and given the short track record of this new regime, it’s not out of the question that it might just happen.

What could it mean for Ontario if Bill 148 is repealed? The province’s businesses — many perhaps still adjusting to the $14-per-hour rate — will get a break from another increase in the cost of doing business, at least temporarily. Low-wage workers won’t get the pay they were expecting in 2019, but they are doing a little better as is with the new rate anyway. But it could also be a hard pill to swallow when an increase they’ve been expecting for more than a year now is suddenly taken from them shortly before it’s to go into effect.

As mentioned above, a $15-per-hour minimum wage would put Ontario with the front of the pack for the highest. But is that necessarily a bad thing? Somebody’s got to be the highest. And it looks like the gap could be narrowing.

Alberta has already made the move and its minimum wage will be on top at $15 per hour on Oct. 1 of this year. Quebec is currently in a provincial election campaign, and two of the parties are promising a raise of the minimum wage to $15 from its current hourly rate of $12 — the Quebec solidaire party saying it will make the change quickly in 2019, while the Parti Québecois pledged to implement the hike within four years. British Columbia is increasing its minimum wage — currently $12.65 — every year for four years, and by June 1, 2021, it will sit at $15.20. If the Doug Ford government stops the next hike, it could lag behind all three of these jurisdictions and not be far ahead of the Northwest Territories and Nunavut.

Ontario’s economy has had an up-and-down ride in the last while, but there have been signs of strength and growth. Many will argue that’s not the case, so it depends on how one looks at it. But there’s no denying it’s Canada’s most populous province with its biggest city and some pretty big economic engines. It’s traditionally considered one of the “have” provinces, though that status has changed at times in recent years. But in many areas, particularly in an around Toronto, the cost of living is higher than in some other regions like the east coast and the prairies, where the minimum wage is more in the $11- to $12-per hour range. Should it have a minimum wage that’s middle-of-the-pack, or closer to the top?

© Copyright Canadian HR Reporter, Thomson Reuters Canada Limited. All rights reserved.

Jeffrey R. Smith

Jeffrey R. Smith is the editor of Canadian Employment Law Today, a publication that looks at workplace law from a business perspective.
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