For members with stores in Ontario: Ontario Government Legislates Minimum Wage Changes

As anticipated, the Ontario Legislature yesterday passed Bill 148, which enacts the January 1, 2018 minimum wage increase to $14/hour, the January 1, 2019 increase to $15/hour and other measures related to the Employment Standards Act and Labour Relations Act. Given the Liberal majority in the Ontario Legislature, the implementation of the changes contained in Bill 148 has been a foregone conclusion since they were first announced in Spring 2017.

Retail Council of Canada continues to be strongly critical of the pace of the minimum wage change and was the first Ontario business association to appear on the issue on the opening day of the Finance Committee hearings in Thunder Bay. RCC has worked with the Keep Ontario Working coalition, along with the Ontario Chamber of Commerce, Canadian Franchise Association, Restaurants Canada and 11 other associations in expressing our deep concern about a 30%+ increase to the minimum wage over a mere 18 months.

At the same time, recognizing the inevitability of passage of Bill 148 by a majority government, and the government’s determination to promote the $15/hour message through advertising and in all public pronouncements, RCC developed a three-phased strategy for engagement: seeking concessions in the pre-impact period (i.e., announced prior to January 1, 2018); further mitigation in the run-up to the next provincial budget expected in March or April 2018; and lastly, slowing the pace of adoption of the second increase from $14/hour to $15/hour, following the next election, which will be held on June 7, 2018.

Jointly with Restaurant Canada, RCC met with the senior decision-makers from both Government and Opposition and launched a website campaign, www.protectfirstjobs.com, knowing that younger workers are particularly vulnerable to major changes to the minimum wage and that this is an important socio-economic and political constituency for the Liberal government. In its Fall Economic Statement, released on November 14, the government announced some modest measures targeted at small and medium-sized enterprise (SMEs), including a reduction in the small business tax rate from 4.5% to 3.5% and a $2,000 incentive for hiring and retention of each new young worker hired under age 30.

While RCC will continue to advocate that the incentive should apply more broadly than to new hires and SMEs, RCC notes that a $2,000 incentive covers 40% of the first-year impact of the minimum wage increase on the cost of hiring a young full-time employee (and a greater percentage of the incremental cost of new part-time employees).

Going forward into 2018, RCC will push for the expansion of this program through the next provincial budget, along with other measures to help mitigate the effects that Bill 148 may have on employment, prices and business earnings. The opportunity will also exist to raise retail industry concerns in the platform development process leading in to the election.

Our third-phase of activity looks at the longer term and the potential to slow the pace of the second hike from $14/hour to $15/hour. The Progressive Conservative party has already committed to phase this in at $0.25 a year over four years, see: https://www.ontariopc.ca/fall_economic_statement_shows_ontario_families_deserve_a_more_responsible_approach_to_the_economy_ontario_pcs – a rate roughly comparable to annual indexation at the level of inflation, which was the method used in Ontario prior to the Government’s Spring 2017 announcement. This would require new legislation if the Progressive Conservative Party forms the next Government of Ontario.

The other measures contained in Bill 148 are too numerous to address in a Member Notice but are well-summarized at the Ministry of Labour website: https://www.ontario.ca/page/plan-fair-workplaces-and-better-jobs-bill-148. Retail Council will issue further guidance on the new legislation once all implementation details are settled, including the review currently underway of exceptions to certain provisions of the Employment Standards Act.

If you have any questions or concerns, please do not hesitate to contact: Karl Littler, Vice-President, Public Affairs at 416-467-3783 or klittler@retailcouncil.org