minimum wage trends - CPI vs actual minimum wageThe panel report recommends the following:

  1. Minimum wages should be revised annually based on the Ontario Consumer Price Index.
  2. A minimum of four months’ notice of any wage change should be provided.
  3. The Government should undertake a full review of 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.
  4. To aid the full review process, and to ensure that Ontario’s minimum wage policies are in step with the needs of its citizens, the Government should establish an ongoing research program for data and information gathering and its subsequent analysis to address policy-relevant minimum wage issues.

During the process, the Panel was under intense pressure to support an immediate increase to the minimum wage to the $14 per hour level. However RCC and other business groups’ efforts were successful in deflecting such an adjustment due to competitive and economic reasoning. RCC was an active participant on the panel and the results reflect a reasonable outcome considering the challenges in today’s economy. The government will continue to face significant pressure to raise the minimum wage significantly as it was last adjusted in March 2010.

RCC encourages the government to apply the panel’s recommendations on a go-forward basis.  Any attempt to apply the recommendations retroactively would result in Ontario’s minimum wage being seriously out of step with other Canadian Provinces, and the U.S., which would, in turn, have a direct impact on Ontario’s economy.

RCC has 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.  This increase more than accounts for all CPI inflation that has occurred between 2008 and today and thus there is no justification for applying CPI retroactively.

Next Steps:

RCC will continue to meet with government officials to ensure future minimum wage adjustments are based on the panel’s recommendations.

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.

See also:

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 [email protected].