By SARAH EFRON, RACHELLE YOUNGLAI
Saturday, June 9, 2018
Ontario's planned hike to a $15 minimum wage will likely soon be quashed as Doug Ford and his Progressive Conservatives get ready to run the country's mostpopulous province.
Mr. Ford has promised to keep the minimum mandatory rate at $14 an hour, while allowing subsequent increases at the rate of inflation. He has also said he will eliminate provincial income taxes for those earning the minimum wage.
The mandatory hourly rate increased to $14 from $11.60 in January and was due to climb to $15 next year. The labour policy from the outgoing Liberal government angered businesses across the province who said the pace of the increase - nearly 30 per cent in 15 months - was way too fast.
Now, many Ontario entrepreneurs say they are relieved to see the end of the Liberal government that they perceived as unfriendly to business.
"It really did put us in a bad position," Shalini Sheth, who coowns Surati Sweet Mart food factory in the Toronto suburb of Scarborough, said of the minimum-wage hike. "We're definitely not against people getting a raise, but the speed at which it was implemented was too fast."
Ms. Sheth said she can allocate the money she was planning to use for the next wage hike for other purposes. "We're looking at adding more equipment, and in turn adding more people to run that equipment."
On top of anxiety over wage hikes, companies said they felt squeezed by the Liberals' Fair Workplaces, Better Jobs Act (Bill 148), which required paid personal-emergency days and paying temporary workers the same amount as full-time employees doing the same job, among other measures.
"It seemed to come in so fast and it was all done from our perspective for political gain," said Chris Wilcox, general manager of a chain of Quickie convenience stores in the Ottawa area.
"It was like a steady drip, drip, drip. There was a change to vacation pay, a whole host of things.
Individually, I don't think we objected to many of them. It's just that they all seemed to come at once and it was just too much to adapt to all at the same time," he said.
As with many entrepreneurs, Mr. Wilcox isn't necessarily expecting that much of the legislation in place will be changed, but he's hoping for some stability.
During the campaign, Ford didn't address many details about Ontario's labour laws, although he did vow a slight reduction in the provincial small-business tax rate, to 3.2 per cent from 3.5 per cent.
Mr. Wilcox said he is not so much happy that the Conservatives won, but relieved to avoid the prospects of an NDP government, which he says would have increased regulations and followed through on the Liberals' minimum-wage hike. "This is an exciting opportunity for us to get back in expansion mode again," he said, saying he will hold Mr. Ford to his promise of allowing convenience stores to sell beer and wine.
The Liberals' higher minimum wage was implemented during a period of robust economic growth in Ontario. The province's jobless rate is the lowest in nearly two decades and wages are starting to rise. But it's not just the minimum-wage hike that pushed Ontario's average hourly rate up 4.7 per cent to $27.39 over May of last year.
Higher-paid sectors, such as natural resources, saw an increase of 20 per cent and finance was up 6 per cent.
Meanwhile, the average hourly rate in a sector dominated by minimum-wage workers - accommodation and food services - was up by 8.6 per cent to $16.28. Another low-paid sector - retail and wholesale trade saw the rate increase 7.6 per cent to $21.40.
Although businesses said they had to cut hours and jobs and raise prices to offset higher labour costs, the numbers are not showing a correlation between the minimum-wage increase and job losses.
Accommodation and food services has continued to create positions, adding 6,100 last month, according to the jobs report released by Statistics Canada on Friday. That sector has expanded by 8.5 per cent over May of last year. Employment in retail and wholesale trade has declined by 0.6 per cent over the same period.
Economists say it is too soon to see the effect of the minimum-wage hike on job creation.
"It's way too early to judge that," said Benjamin Tal, deputy chief economist with CIBC.
Ontario premier-designate Doug Ford and his Progressive Conservative government will face no shortage of economic challenges, ranging from immediate concerns to more structural issues that have stymied policy makers across the developed world.
DEBT Ontario's debt has skyrocketed. The province's net debt will hit $325billion this fiscal year, according to projections, or nearly double where it was a decade ago.
The situation could get worse. The Tories promised billions in new spending but never released a fully costed platform, casting doubt over how they would fund their plans. Mr. Ford has said he would run deficits for the first two or three fiscal years, but did not indicate the size of the shortfalls.
Rising U.S. protectionism is an especially critical matter to Ontario.
The province's trade with the United States in 2016 amounted to 49 per cent of its GDP - second only to New Brunswick in percentage terms, but by far the most in total dollars.
"[Ontario's] industries are some of the industries that would be most vulnerable to protectionism - most notably autos and metals," said Douglas Porter, chief economist at Bank of Montreal. "That's a pretty clear danger over the near term to the Ontario economy."
Despite a raft of new regulations, housing and rental prices in the Greater Toronto Area remain historically steep. The Tories made scant mention of housing in their platform but vowed to "increase the supply of affordable housing" in the GTA without touching the environmentally sensitive Greenbelt. They would also maintain rent control "for existing tenants" in the province.
Electricity prices have surged, frustrating both households and businesses alike. Mr. Ford has vowed to fire the chief executive of Hydro One, despite not having the authority to do so. The Tories have also pledged to cut hydro rates by returning the company's dividend payments to taxpayers and by shifting the cost of conservation programs onto provincial books. Those two moves, however, would cost roughly $800-million a year.
Former premier Mike Harris waves to supporters after taking the stage for his victory speech in North Bay in 1995.
FRANK GUNN/THE CANADIAN PRESS