The Ontario Government announced on January 30, 2014 a 75-cent increase to minimum wage, representing a 7% increase to labour costs for businesses operating in Ontario. RCC stressed that businesses did not have time to plan for such an increase and that it would have an impact on job creation in Ontario.

The report of Ontario’s Minimum Wage Advisory Panel, which was released on January 27, 2014, had recommended the following:

  • Adjust minimum wage annually based on the Ontario Consumer Price Index.
  • Provide a minimum of four months’ notice of any wage change.
  • Government should review the minimum wage rate and the revision process every five years. This review should be conducted by a panel of stakeholders and a neutral chair. The mandate of this Panel would be to review Ontario’s past experience with minimum wage revisions within the context of Ontario’s social and economic progress and prevailing practices in other jurisdictions to recommend changes that could better serve Ontario’s future needs.
  • The Government should establish an ongoing research program for data and information gathering and its subsequent analysis to address policy-relevant minimum wage issues.

RCC supports CPI indexation in order to depoliticize the process, to base minimum wage adjustments on objective economic criteria, and to provide predictability and lead time for business planning purposes.

RCC and other business groups strongly urged the Government to apply indexation on a go-forward basis, without any retroactivity. RCC reminded the Ontario Government that the last round of increases, from 2008-10, raised minimum wage by $2.25 an hour, a 28% increase over three years. Those increases more than account for all CPI inflation that has occurred between 2008 and today and thus there is no justification for applying CPI retroactively. However, the government acceded to pressure to raise the minimum wage baseline for future CPI adjustments, as minimum wage was last adjusted in March 2010.

Next Steps:

RCC will work to ensure that legislation implementing CPI indexation maintains the Panel’s core principles of transparency, predictability and fairness and that future adjustments are not subject to political considerations.

Background:

The Ontario Minister of Labour created a minimum wage panel in July 2013. Its purpose was to create a mechanism to manage future minimum wage adjustments and report back by the end of 2013. The five person panel was comprised of two business representatives one of which was RCC along with labour, poverty and a student member. The panel toured 10 cities gathering input during the process.  People were encouraged to make presentations or respond directly to the Ministry of Labour.

If you have any questions about the Panel report or the minimum wage issue itself, please contact Gary Rygus at 416-467-3744 or e-mail at [email protected]