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Articles on Bill 148

The Unintended Consequences of a $15 Minimum Wage

5/31/2017

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What we are hearing from our members:
​Local Manufacturer – “I’ve just won a contract to supply another local company with my product. This is a major order that will require an expansion of my businesses, including hiring more people. At $15/hr, I am no longer competitive and will have to walk away from the work and the expansion. I thought hydro rates, now my largest business expense, was hard enough to deal with. This is impossible.”
Local Tech Company – “Layoffs likely and price increases for sure”
​Local Not For Profit with 35 employees during the Summer – “Our labour costs just went up 30%! We will use a combination of hiring fewer people, shortening shifts and increasing prices to adapt. Unfortunately, hiring fewer students for the summer will be the first move”
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Local Retailer – “Increasing Minimum wage to $15 will affect our entire pay scale. An employee currently making $15 an hour has earned it through experience, training and proving themselves. They certainly won’t be happy making the same money as en entry-level employee. Our costs will increase approximately 8% and while we can increase prices over time, it has to match our competitors, so our only tool in the short term is an equal reduction in the number of hours.”
​Local Retailer – “Increasing Minimum wage to $15 will affect our entire pay scale. An employee currently making $15 an hour has earned it through experience, training and proving themselves. They certainly won’t be happy making the same money as en entry-level employee. Our costs will increase approximately 8% and while we can increase prices over time, it has to match our competitors, so our only tool in the short term is an equal reduction in the number of hours.”
​Local Retailer – “Increasing Minimum wage to $15 will affect our entire pay scale. An employee currently making $15 an hour has earned it through experience, training and proving themselves. They certainly won’t be happy making the same money as en entry-level employee. Our costs will increase approximately 8% and while we can increase prices over time, it has to match our competitors, so our only tool in the short term is an equal reduction in the number of hours.”
​Local Restaurant – “At $14/hr payroll increases by $70k, at $15/hr an additional $23k… I see hiring fewer people, increasing prices, phasing out employee benefits such as group benefits, free uniforms, free meals, etc. This is the most devastating cost to hit the hospitality industry – ever…”
The call will continue for an economic impact analysis around the proposed changes to the Employment Standards Act (ESA) and the Labour Relations Act (LRA).  The provincial government is planning to introduce legislation today (Thursday, June 1) to put in motion the changes announced on Tuesday.   
That means over the summer months the legislation will make its way through committee.   Yes, the proposed changes are the result of a two year review by two special advisors, and the Ontario Chamber of Commerce and by extension the Peterborough Chamber of Commerce participated in those discussions, but the challenge is we’ve yet to see or know of an economic impact analysis of the changes.  This information is vital to ensuring that the province is moving forward with eyes wide open.   

“Minimum wage was explicitly left out of the Changing Workplaces conversation, so we’re not sure what’s guiding today’s announcement,” says Stuart Harrison, President & CEO, Peterborough Chamber of Commerce. To suddenly legislate the most dramatic minimum wage increase in Ontario’s history creates serious concern about unintended consequences.”
​
In the announcement of the Fair Workplaces and Better Jobs plan, Premier Kathleen Wynne highlighted five main changes to the Employment Standards Act: 
  • Minimum Wage will be increased to $15/hour over the next 18 months.
As of January 2018 it will rise to $14/hour
As of January 2019 it will rise to $15/hour                    
After that increases in minimum wage will be tied to inflation (as is currently the case)​
​
  • Equal pay for equal work 
This change is aimed at ensuring part-time, casual and seasonal employees are paid the same rate as            full-time employees on a pro rata basis

Increased vacation time to 3 weeks after five years of service with the same employer
Fairer rules for scheduling

An employer must pay an employee for 3 hours of work if a shift is cancelled without 48 hours notice

  • Changes to Sick Days
Employees will receive up to 10 sick days each year, of which two must be paid

  • Temporary workers
Will have to be paid the same as a full-time employee doing the same job.  If legislation is passed this will come into effect on April 1, 2018


Under the Labour Relations Act some of the changes include: 
  • Exclusions from Collective Bargaining
The Ministry of Labour will work with affected Ministries to consult with stakeholders to review the                  Special Advisors' recommendation to remove the exclusions under the LRA, taking into account                      ongoing litigation.

Currently, the following professions are excluded from collective bargaining: domestics, hunters and trappers, members of the architectural, dental, land surveying, legal or medical profession and agricultural and horticultural employees. The Special Advisors recommend that these groups should be covered by the LRA.
  • Measures to Increase Unionization
Including extending card-based union certification to the temporary help agency industry, the building            services industry and the home care and community services industry
  • Enforcement and Education
Hiring of 175 more Employment Standards Act officers to enforce and educate both employees and small and medium businesses.  

​All of these changes will have compounding costs which the government has not yet fully understood. That is why the Chamber Network and the Keep Ontario Working Coalition have called on the government to conduct a comprehensive economic impact analysis. This analysis should have clear acceptability thresholds, and the reforms implemented should be limited to those that pass such thresholds or are being implemented with a commensurate economic offset measure, in order to help businesses transition into any regulatory changes. 

We have heard from members who say the impact will be felt throughout their businesses.  

“We are really good local employers in the not-for-profit sector, during peak season we have 35 employees.  Our staff is well respected in our workplace, we are generous with our current benefit plans, and we offer great summer employment options to university/college students (full time throughout the whole summer). 18 months, and a 30% plus rate increase --- how could any business adapt to that without sacrificing customer service, increasing prices AND reducing overall staff level?”

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 this affect your business? Let us know: sandra@peterboroughchamber.ca

Provincial Government Statement
Local Retailer – “At this point we have estimated that this increase will cost us upwards of $50,000.00 a year. Where is that coming from, profit, that is used to scale our business, and for the creators/the risk takers to feed our families.”
Local Multi-Business Owner – “We have always operated our businesses with a view to a one, three, and five year strategic plan, uncertainty about general economic conditions, makes planning difficult at best. The proposed changes were not on anyone's radar 12 months ago so we are left re-evaluating our plans. We had planned a fairly major expansion to begin in the next 6-12 months, those plans are now on hold and possibly cancelled. We will in all likelihood be forced to freeze hiring and possibly implement some layoffs, hopefully these will not be permanent in nature. We are in a competitive sector but we will, like our competition, be forced to pass along increased costs to our customers where possible. Some of our business ventures are price regulated, so we are vulnerable here to the decisions of the regulators.”
Local Property Management Group – “We may need to look at price increases across the board, but for our residential properties it will be more costly housing as we increase the market rent of our units as they turn over; ultimately a cycle – we have to increase housing amounts accordingly and those making the new minimum wage still may not be able to afford the accommodations and, it will ultimately affect anyone on a fixed income. In any event, I expect many of our expenses would increase as the increase in minimum wage will also affect their business and they in turn will pass that cost along to us.”
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Changes will Hurt Job Creation, Consumer Costs and Economic Growth

5/30/2017

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Keep Ontario Working Coalition: Ontario Deserves Evidence-Based Reform
​Changes Will Hurt Job Creation, Consumer Costs and Economic Growth
PETERBOROUGH, May 30, 2017 – The Keep Ontario Working coalition, in partnership with the Peterborough Chamber of Commerce and the Ontario Chamber of Commerce (OCC), today expressed concern that the Government of Ontario’s Fair Workplaces and Better Jobs Plan, commits to unproven sweeping reforms without ensuring protection against unintended consequences, including job losses, rising consumer costs, and economic hardship. 

“The Chamber Network has been involved with the Changing Workplaces Review over the past two years,” says Stuart Harrison, President & CEO, Peterborough Chamber of Commerce. “Minimum wage was explicitly left out of the conversation, so we’re not sure what’s guiding today’s announcement.  To suddenly legislate the most dramatic minimum wage increase in Ontario’s history creates serious concern about unintended consequences.”

The Keep Ontario Working Coalition (KOW) is a broad-spectrum group of business sector representatives concerned with sound public policy to help produce jobs and grow Ontario. 

As noted in the Business Prosperity Index of the Ontario Chamber of Commerce’s 2017 Ontario Economic Report, despite projections that Ontario will lead Canada in economic growth in the coming years, diminished profitability, lower labour market participation, and sluggish market activity; along with other key factors have resulted in a risk-averse atmosphere that businesses are disinclined to grow production. Businesses are questioning if they should grow in Ontario or expand offshore.

Despite that, Ontario’s private sector is still doing its part to support workers. As the Government pointed out in Budget 2017, 98 per cent of all new jobs since the recession in Ontario have been full time, and 78 per cent in above-average wage industries. This positive economic activity by Ontario’s private sector demonstrates a clear commitment to good jobs throughout our province.

Statement
The following is a statement by the Keep Ontario Working Coalition on the Government’s proposed workplace reforms: 
“We share in 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.

“Government cannot regulate prosperity. To demonstrate true fairness and compassion for workers, we must ensure Ontario has a strong economy to help create jobs and increase economic growth. 

“That is why we are urging the government to take time this summer to have an independent third party conduct a comprehensive economic impact analysis on the proposed reforms to consider the unintended consequences to employers. In addition, as the province’s biggest employer, the government must fully understand what these changes will cost in relation to the provincial treasury as well as social services and other government agencies.  

“Why is evidence-based policy important? Only three years ago, the Premier’s own Minimum Wage Advisory Panel conducted extensive research and concluded: ‘In the Canadian context, researchers have generally found an adverse employment effect of raising minimum wages especially for young workers…typically those studies find that teen employment would drop by 3 to 6 per cent if the minimum wage is raised by 10 per cent.’

“While the Changing Workplaces Review cautioned that any regulatory change shouldn’t impair the competitiveness of businesses in the province, the reforms outlined in Fair Workplaces and Better Jobs Plan thus far do not provide the balance needed to help ensure a competitive environment for Ontario. 

 “But we have time. Now we must work cooperatively with government to identify the scale of the economic impact of these changes and help employers transition into any new policy regime. We will continue to be cooperative partners with government to find solutions that will, where possible, inhibit negative impacts on the growth of Ontario’s economy, our people, and our communities.” 

- 30 - 
​
Keep Ontario Working Coalition Members 
Association of Canadian Search, Employment and Staffing Services (ACSESS) 
Canadian Franchise Association (CFA) 
Food & Consumer Products of Canada 
Food and Beverage Ontario (FBO)
National Association of Canada Consulting Businesses (NACCB Canada)
Ontario Restaurant, Hotel and Motel Association (ORHMA)
Ontario Chamber of Commerce (OCC) 
Ontario Federation of Agriculture
Ontario Forest Industries Association (OFIA)
Restaurants Canada
Retail Council of Canada (RCC)
Tourism Industry Association of Ontario (TIAO)


www.keepontarioworking.ca


Media Contact: 
Sandra Dueck
Policy Analyst/Communications Specialist
Peterborough Chamber of Commerce
sandra@peterboroughchamber.ca
705-748-9771 x215
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