Ontario Government Announces $15/Hour Minimum Wage By 2019

Ontario Government Announces $15/Hour Minimum Wage By 2019

Ontario Premier Kathleen Wynne and her Liberal government have announced a slew of labor legislation changes for Ontario that include a huge boost to minimum wage and benefits. The Fair Workplaces, Better Jobs Act proposes broad amendments to the current employment standards, which have not been reviewed in over 20 years.

The announcement came after the release of the Changing Workplaces Report last week, an independent review spanning two years of consultations and analysis. Involved in the full two-year process, Ryan Mallough, a policy analyst with the Canadian Federation of Independent Business, said that “at no time did they ask us or consult on minimum wage...So I think the initial reaction here is we’re feeling pretty blindsided.”

It caught many by surprise, especially the very workers the Liberals are striving to protect. With a majority government in place, it’s expected that the legislation will pass in September and attempt to level the playing field for part-time, contract and temporary workers throughout Ontario. The highlights include:

  • Increasing the minimum wage from the current $11.40 per hour to $15 per hour by Jan 1, 2019
  • Equal pay for casual, part-time, temporary and seasonal employees when performing the same work as full-time staff
  • Employees are entitled to three weeks of paid vacation after five years with the same employer
  • Everyone will be given ten days of personal leave, two of them paid
  • Employers will be prohibited from requesting a doctor’s note from an employee for taking personal emergency leave
  • Protections against repercussions for inquiring about personal wage rates or asking other employees about their wages
  • Employees can refuse to accept shifts if given less than four days notice
  • Guaranteed three hours of pay if an employee’s shift is canceled with less than 48 hours notice
  • Employers are prohibited from misclassifying employees as “independent contractors” to avoid extending benefits or paying them fair wages; in the event of a dispute, the onus will be on the employer to prove the individual is not an employee

Predictably, cheers and criticisms arose from many parties. Citing Wynne’s own 2014 minimum-wage advisory panel as an example, Ontario Chamber of Commerce vice-president Karl Baldauf said he hoped the government spends the summer examining evidence-based impacts of its proposals to help transition both employers and workers into the new work environment the legislation will cause.

“Employers understand more needs to be done, but if that needs to take place, you have to help them transition,” Baldauf said. Mike Ziola, partner and general manager of Biagio’s Italian Kitchen in Ottawa, agrees. “It’s going to have the opposite effect of what [the Ontario government is] hoping to have.”

He and other restaurateurs regularly have to make last minute schedule changes to adjust for canceled reservations, weather changes or large events- making the proposed scheduling payment system restrictive and costly. “It’s going to cost hostesses, cost dishwashers, etc.,” Ziola laments. “Only three years ago,” Baldauf points out, “the premier’s own minimum wage panel found that through research of Canadian examples every time you increase the minimum wage by 10% it has the reverse impact of lowering youth employment by 6%.” Tony Elenis, chief executive of the Ontario Restaurant Hotel and Motel Association, said the changes “seem totally out of touch with the practices of running an operation.”

“It’s going to put a lot of businesses, especially small business with very thin profit margins, in jeopardy- and that’s unacceptable. We need to ensure that we are enabling prosperity for all, that’s what fairness looks like, and what we’re seeing today does not reflect that,” Baldauf told Global News.

However, Chris Buckley disagrees. The president of the Ontario Federation of Labour said that the changes were “long overdue” and that the increase is a step in the right direction to help more than 1.7 million Ontario residents “get lifted out of poverty.”

“The employment landscape has changed dramatically over the last decade across Ontario,” Buckley said. “We lost hundreds of thousands of good paying full-time, steady jobs. Those jobs didn’t come back and they’re not coming back. So we’re left with a retail service sector economy in this province where workers are earning $11.40 an hour- you can’t survive on $11.40 an hour.”

Deena Ladd, the coordinator for the Toronto non-profit Worker’s Action Centre that fights for non-unionized workers, said business federations such as the Ontario Chamber of Commerce are using “scare tactics” to drum up opposition to the minimum wage increases.

“Even in 2014, after the minimum wage had been frozen for four or five years and we had a little boost up from $10.25 to $11, they were screaming, ‘The sky is falling,’ and ‘Oh my God we can’t increase the minimum wage, that’s going to ruin us,’” Ladd said. “Well guess what? It didn’t ruin you.”

Ladd has a good point. Every time someone brings up increasing the minimum wage, conservatives and industry experts cry out about how it will terminate small businesses, and how fewer people will be hired because it costs more. There are always predictions of boom and bust that divide, but the reality is rarely an economic meltdown or a miracle. Life goes on, and the economy goes on.

Look, there is never going to be a good time to increase wages for any business. It adds to their costs and raises their overhead. Activists counter that it’s long past time to raise the minimum wage to lift people out of the working poor- but truthfully, minimum wage is an inefficient anti-poverty tool. I’ve written previously about how I support universal income more than wage hikes, so let’s focus on something else as opposed to the short-term vision of raising the minimum wage.

Historically speaking, raising the minimum wage does not automatically translate to lower employment rates. Ontario’s unemployment rate is at a remarkably low 5.8%- the lowest in 16 years. Economic growth has been leading the country, heavily driven by increased exports. And all of that continued, even after all the naysayers protested Wynne bumping the minimum wage up to $11 back in 2014.

Business critics paint the idea of raising the minimum wage as a hostile idea, claiming that this will have businesses packing up and moving to other areas with lower-wage jurisdictions. But the fact of the matter is, any job that can be moved that easily was never going to stay. The majority of the secure, full-time jobs these critics imagine are long gone because they were always mobile- they’re given to those with the most experience, education, etc. and they don’t require proximity to their markets or availability of workers. It’s the low-wage jobs, typically in the service sector, that will always remain. A local cafe can’t just pack up and move to Alabama. Hotels can’t leave town if they want guests.

I fully acknowledge that raising the minimum wage will increase the costs of living. Carleton University economics professor, Frances Woolley, said that customers of some businesses- particularly those that hire more vulnerable populations but service the more affluent- should be prepared to embrace higher costs with the new minimum wage increase. Businesses pass on these costs to their customers, but when more people are earning an actual living wage, they will be contributing to the economy more as well. The challenge is finding the equilibrium- a minimum wage that balances the higher cost of living with increased spending in the economy.

But I don’t think that’s what this is about at all. Digging into some research on Ontario politics, it appears that Wynne has had an abysmal approval rating as of late. Hydro bills have been out of control, carbon tax rates are through the roof, and Ontario citizens seem to be laying the blame directly on Wynne’s wavering stances and constant proximity with big corporate lobbyists. But now with an election in the works for next year, suddenly she’s offering her electorate tax breaks on their bills. And now she’s upping the minimum wage, aligning herself with unions and the many shift and service workers who, coincidentally, have the potential to be the largest voting group in the province. Announcing legislation without a proper impact-benefit analysis seems a bit hasty, and it appears to me that Wynne is trying to figure out the best ways to get people to like her again.

It seems like Ontario’s current government is more interested in finding a way to get reelected as opposed to helping those living on minimum wage.