PEI government continues to ignore business community / Announces another significant minimum wage increase

On October 26, 2018, the government of Prince Edward Island announced that PEI businesses will be subject to an increase in minimum wage. On April 1, 2019, minimum wage will move from $11.55 per hour to $12.25 per hour.

The PEI government continues to ignore the concerns raised by the province’s business community by raising the base wage at a rate that far outpaces inflation. The province’s minimum wage has increased by 46% since 2008 while inflation has only risen 11% over the same time period.

Despite years of advocacy from RCC and most business stakeholders, the PEI government refuses to implement a transparent, predictable process for determining minimum wage.

What RCC Did / Next Steps:

RCC participated in the Employment Standards Board’s stakeholder consultation on minimum wage during the Fall of 2018. 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 and the government continue to ignore the advice of the business community.

RCC met with PEI’s Minister of Labour in June and once again, explained the negative impact that these non-transparent minimum wage increases have on entire salary scales in PEI businesses. RCC has warned the PEI government that as business costs continue to rise, there is a greater potential for the government’s minimum wage decisions to impact retail prices, retail jobs and retail wages.

RCC will continue to remind the government that PEI is the only Atlantic Province that does not determine its minimum wage based on the change in the Consumer Price Index (CPI) for the previous year.

Background:

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 the minimum wage. Excessive and unpredictable changes in minimum wage only create upward pressure on all other retail wages.

On a positive note, RCC advocacy has resulted in a government decision to increase PEI’s basic personal tax exemption over the next two years. This will bring PEI’s exemption level to $8660 by 2020. 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 and will increase Islanders’ disposable incomes. Although this is a positive step, PEI still has one of the lowest basic personal exemption levels in Canada.

If you have any questions or concerns, please don’t hesitate to contact: Jim Cormier, Director (Atlantic) at:  jcormier@retailcouncil.org or 902-422-4144