Labour briefs

Alberta increases minimum wage / Ontario pension plan a costly nightmare: Fraser Institute

Alberta increases minimum wage

EDMONTON — On Sept. 1, minimum wage workers in Alberta will be getting a raise.

On May 28, Alberta announced an increase to its minimum wage — from $9.95 to $10.20 per hour. The liquor server minimum wage will also rise, from $9.05 to $9.20 an hour.

Prompted by rising provincial incomes and cost of living, the increase was based on a formula that links the general wage rate to annual increases in average weekly earnings and the consumer price index (CPI) in Alberta.

This past year, average weekly earnings rose 3.3 per cent in the province, with the CPI rising to 1.4 per cent. That average — 2.3 per cent — translates to a 25-cent increase per hour.

"While Alberta has the lowest percentage of employees earning minimum wage in the country, these individuals form an important part of our workforce. Many work in the service and retail sectors and are gaining the experience they need to succeed," said Kyle Fawcett, the province’s new minister of jobs, skills, training and labour.

"These changes will give them a modest increase while keeping the viability of their employers in mind as well."

When weighted against the rest of the country, a relatively low number of Albertan workers earn the minimum wage. About 25,700, or 1.5 per cent of employees earn the base wage rate, which compares to 6.8 per cent nationally, and 9.1 per cent in Ontario, according to the labour ministry.

Ontario pension plan a costly nightmare: Fraser Institute

TORONTO — The wallets of workers in Ontario could bleed thousands of dollars each year if the government’s proposal for a provincial pension plan gets the go-ahead, according to a new report from the Fraser Institute.

Released by the public policy research organization on May 28, Evaluating the Proposed Ontario Pension Plan noted that the true cost of a provincially regulated retirement scheme could cost up to $3,420 a year.

According to Philip Cross, an economist with the institute and former chief economic analyst for Statistics Canada, employers will also have to cut future wages or other benefits to meet the demands of the mandatory pension plan.

"Unless there’s an increase in productivity, employers can’t suddenly increase compensation to employees unless they raise prices in an increasingly competitive marketplace," Cross explained. "However you slice it — lower wages and less hiring, or higher prices at the till — it’s bad news for Ontario workers."

After the federal government balked on expanding the Canada Pension Plan (CPP), Ontario’s Liberal government decided to forge ahead alone, and introduced a framework for a provincial pension plan earlier this year.

Dubbed the Ontario Retirement Pension Plan, the proposal would require workers to contribute 1.9 per cent of their earnings into a retirement plan, which their employer would have to match. This, coupled with mandatory CPP contributions, would cost Ontarians thousands of dollars, Cross said, adding the plan is based on the faulty assumption that workers don’t save enough for retirement.

"Its sheer size and concentration will leave the fund vulnerable to a spectacularly poor investment decision…potentially offsetting any gains made by low fund management costs," Cross added.

In order to bolster the nest eggs of Ontario’s workers, Cross said the government should instead foster strong income growth, which allows both spending and saving to increase.

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