Yesterday, the government of Prince Edward Island announced that PEI businesses will be subject to an increase in minimum wage. On April 1, 2017, minimum wage will move from $11.00 per hour to $11.25 per hour.
This follows two increases in the minimum wage during 2016. The province’s minimum wage has increased by 38% since 2008 while inflation has only risen 11% over the same time period. This year’s announcement is particularly challenging given that the government is only providing a little over a month for businesses to prepare for the wage increase.
What RCC Did / Next Steps:
RCC participated in the Employment Standards Board’s stakeholder consultation on minimum wage during the Fall of 2016. Businesses and industry associations participate regularly in these consultations and either ask for no increase in the province’s minimum wage or they follow the RCC lead in asking for minimum wage increases to be based on the change in the Consumer Price Index (CPI) for the previous year. The Board continues to ignore the advice of the business community as demonstrated by the 38% increase in the base wage since 2008.
RCC has had numerous meetings with the Premier and various Ministers on this topic and has asked for yet another meeting with the province’s Minister of Workforce and Advanced Learning.
RCC will continue to demonstrate the negative impact that such increases have on businesses and the potential impact on retail prices, retail jobs and retail wages.
RCC will remind the PEI government that it joined with Nova Scotia, New Brunswick and Newfoundland & Labrador in passing legislation committing Maritime governments to greater regulatory harmonization and elimination of unnecessary red tape. One of the most significant initiatives in this regulatory harmonization process was a commitment from all Atlantic Provinces to set April 1st as the common date for minimum wage increases. This positive step was followed by a commitment from both New Brunswick and Newfoundland & Labrador to harmonize with Nova Scotia in the way each province determines its minimum wage. For years, Nova Scotia has followed the RCC preferred method of determining minimum wage based on the change in the national Consumer Price Index (CPI) for the previous year. New Brunswick and Newfoundland & Labrador are currently considering their options but to date, they have at least committed to a process whereby minimum wage would be adjusted based on changes to inflation. Once these positive changes are made, PEI will be the only province in the Atlantic region which refuses to implement a transparent, predictable process for determining minimum wage.
The PEI government proudly states that PEI has the highest minimum wage rate in Atlantic Canada and that the base wage rate will help low income Islanders.
For years, RCC has explained to the PEI government that while minimum wage increases do little to benefit low income Islanders, the increases do have a significantly negative impact on retail employers. RCC has continually presented the PEI government with Statistics Canada data that proves the retail sector in PEI and every Canadian province pays its fulltime employees well above minimum wage. Excessive and unpredictable changes in minimum wage only create upward pressure on all other retail wages.
On a positive note, years of RCC advocacy resulted in the PEI government finally increasing the basic personal tax exemption to $8000. This was done last year and was the first increase since 2008. Unlike the minimum wage increase, this decision will make a difference in the lives of low income Islanders through increasing the amount a worker can earn before paying income tax. Although this is a positive step, PEI still has one of the lowest basic personal exemption levels in Canada.