The Globe & Mail: Cheers, criticism greet Ontario plan to raise minimum wage to $15

Posted June 2, 2017

Sweeping changes to Ontario’s labour legislation have workers and lower-income families cheering over a huge boost to minimum wage and benefits, but the province’s business community warns that the moves will make the province less competitive and drastically raise costs in ways that would be passed on to all Ontarians.
 
After two years of independent review, the government unveiled proposed amendments to the Employment Standards Act and Labour Relations Act Tuesday, including a rise in the minimum wage to $15 an hour by 2019.
 
Part-time, contract and temporary workers would also make the same wage as full-time workers for equal work; vacation and personal-leave benefits would be increased across the board; and scheduling rules would become more rigid, ensuring workers get paid for at least three hours if a shift is cancelled.
 
The proposed legislation – which should be introduced this week to be made law by 2018 – is a victory for low- and moderate-income families, whom Premier Kathleen Wynne said Tuesday should have a fairer share of Ontario’s prosperity.
 
Voices from across Ontario industry warn, however, that the changes would threaten not just individual businesses but the very prosperity the government wants to spread around – forcing companies into the awkward position of slashing jobs, raising prices or shutting down altogether.
 
After two years of consultation and analysis, the province introduced its Changing Workplaces Review report last week. Authored by labour-law experts C. Michael Mitchell and John Murray, it suggested neither a minimum-wage hike nor outright shift-scheduling regulations, insisting the latter be addressed by sector-specific committees – a divergence from expectations that’s left business advocates frustrated.
 
Despite being involved for the full two-year process, Ryan Mallough, 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.”
 
He said in an interview that the proposed legislation, when combined with other additional costs – such as rising employment-insurance premiums and cap-and-trade programs – will make it “very difficult for a business owner in Ontario to manage all these cost pressures.”
 
Citing Ms. Wynne’s own 2014 minimum-wage advisory panel as an example – which found that a 10-per-cent increase in the minimum would lead to a 1-to-3-per-cent reduction in teenagers’ employment – 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 labour ecosystem.
 
“Employers understand more needs to be done, but if that needs to take place, you have to help them transition,” Mr. Baldauf said.
 
The increase to the minimum wage will be phased in over the next 18 months, rising to $14 an hour on Jan. 1, 2018. Workers who have held a job for five years will now be entitled to three weeks of paid vacation. They will also have the right to 10 emergency days annually, two of which must be paid; reasons for leave will be expanded, meanwhile, to include the experience or threat of domestic or sexual violence.
 
The proposals are “a step in the right direction,” said Chris Buckley, president of the Ontario Federation of Labour, which plans to push for further rights improvements for workers. Kemba Robinson, spokeswoman for the Association of Community Organizations for Reform Now, an advocacy group for low- and moderate-income families, called the wage-boost crucial.
 
“People on low income will be rejoicing,” she said. “There are families that have to choose between buying food and paying rent, and we don’t think that is a fair choice. This is a significant improvement in their quality of life.”
 
Employers will now be required to pay an employee three hours’ wages if their shift is cancelled with less than 48 hours’ notice – including if they’re on call and not called into work. “Workers deserve a degree of certainty, especially when you need these shifts in order to make it through the month,” Ms. Wynne said Tuesday.
 
Service-focused businesses, however, say they will have to make tough decisions over the ensuing cost increases. “It’s going to have the opposite effect of what [the Ontario government is] hoping to have,” says Mike Ziola, partner and general manager with Biagio’s Italian Kitchen in Ottawa. He and other restaurateurs regularly have to make staffing changes to accommodate cancelled reservations or weather changes, making the proposed scheduling regulations prohibitively costly.
 
Mr. Ziola says his staff will suffer. “It’s going to cost hostesses, cost dishwashers.” 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.”
 
Job-loss rhetoric, however, does tend to come up whenever minimum wages rise; Miana Plesca, an associate professor studying labour economics at the University of Guelph, says it can be overblown. “It’s not as big as business owners would like us to think,” she said. “I don’t think it’s going to have a huge impact.”
 
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. “If I pay more for my brunch so somebody gets a decent wage, I’m not convinced that’s a bad thing at all,” she said.
 
The plan didn’t go as far as some of the government’s advisers would have liked, Labour Minister Kevin Flynn acknowledged on Tuesday. There was broad advice to remove a lower wage for young workers and liquor servers, as well as to require seven days of paid leave, he said. The government chose to go with more modest changes. “These are a new set of minimums but we already know that most Ontario businesses already exceed these minimums and treat their employees well,” he told reporters.
 
Students and liquor servers will still have separate, lower minimum wages than the standard under the proposed legislation, but they’ll both still rise: to $14.10 and $13.05, respectively, in 2019.
 
The plan also changes union rules, making it easier for temporary workers, building-services workers as well as home and community-care workers, to unionize.
 
The plan will allow unions to access employee lists and contact information if they’ve proved that 20 per cent already support organizing. This has Jocelyn Williams Bamford, founder of Ontario’s Coalition of Concerned Manufacturers, and vice-president of Toronto’s Automatic Coating Ltd., worried about invasion of privacy on top of all the additional costs the proposed legislation would bring.
 
She said the increased costs to Ontario’s small and medium businesses are putting significant pressure on them to move operations elsewhere, or potentially even shut down. “We’re going to see the loss of family businesses, because they’re just on unfair footing now,” Ms. Williams Bamford said. Combined with rising future energy costs and cap-and-trade legislation, “it’s death by 1,000 cuts.… While we’re getting less competitive in terms of our legislation, the U.S. is getting more competitive to draw and attract business.”
 
Progressive Conservative Leader Patrick Brown wouldn’t say whether he would cancel the increase in the minimum wage to $15 if he defeats Ms. Wynne’s Liberals next year. The opposition leader was muted in his criticism and said he needed to see the government’s cost-benefit analysis of the increased costs first.
 
“We’re going to make sure that where there are aspects that are worthy of support, like emergency leave, that we will voice that. Where there are concerns, where there is not substantial analysis to back up the government’s assertions, we will point that out,” he said at Queen’s Park.
 
NDP Leader Andrea Horwath dismissed the plan as a last-minute ploy by the Liberals to convince labour-minded voters a year before the next general election that Ms. Wynne is a friend of workers. “For 14 years they’ve done nothing to address the erosion of people’s standard of living,” she said, referring to the length of the Liberals’ time in power.
 
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Article by Josh O'Kane and Justin Giovannetti for the Globe & Mail