Local businesses are expressing significant concern over their ability to absorb a 23% increase in the minimum wage in a 6 month period, followed by a further jump to $15 / hour just 12 months later. Adding to their concerns is the fact that the minimum wage is only one of a number of proposed legislative changes to employment laws that will add to the costs of doing business in Ontario. This is according to the results of a Sault Ste. Marie Chamber of Commerce (SSMCOC) survey of its members undertaken in the two-week period following the sweeping changes announced by Ontario’s Liberal government.
The survey asked business owners and managers to rate their level of concern on a number of recently-announced labour and employment changes. More than 90% of the almost one-hundred respondents expressed a high level of concern about the minimum wage increase.
Also a high concern for employers is the proposed introduction of 10 Personal Emergency Leave (PEL) days / year (including 2 paid) for workplaces with under 50 employees and mandatory pay for shifts cancelled with less than 48 hours’ notice.
SSMCOC CEO Rory Ring notes that “several survey respondents and business owners have expressed serious concerns, both in the survey and verbally, about the regulation requiring 3 hours pay when 48 hours advance notice of a shift cancellation is not provided. He explains that for many service sector employers, this type of rigid scheduling just isn’t possible. Businesses that operate seasonally or outdoors are often impacted by the weather, while construction and contractors regularly face unforeseen delays that they have no control over; similarly, hospitality and food service businesses can be impacted by cancellations for any number of reasons that are beyond their control.
In a separate question, respondents who currently have employees earning at-or-above $15 / hour were asked if they felt that there would be an expectation to raise wages proportionally and if meeting this expectation caused serious concern. 90% of respondents indicated that they were concerned, or very concerned, about their ability to meet that expectation, suggesting some workers should expect to see their relative compensation slip.
One respondent advised that it will be impossible for their business to increase wages proportionally and expects that their employees currently at-or-above $15 will not see any increase while another respondent suggested that they are already bracing for the inevitable animosity that will arise between staff that may not receive pay increases and those with less seniority, less experience or less responsibility that will.
To meet the added costs that are anticipated under the increased minimum wage and other proposed changes to employment legislation, 64% of respondents indicated that they expect to lessen the number of overall workers, while 40% indicated that they plan to reduce the number of workers on certain shifts. Almost 60% indicated that they will redistribute responsibilities among current workers as opposed to hiring new staff and a similar number of respondents indicated that, as an owner or manager, they expect that they will assume more workload and responsibilities themselves to help offset increased costs.
51% of survey respondents identified themselves as from the retail, restaurant or another service sector industry. These are businesses that offer a foot-in-the-door into the job market for youth, recent graduates or those lacking work experience.
SSMCOC President Paul Johnson expresses concern that “given the number of respondents indicating that they expect to lessen their number of workers or simply redistribute responsibilities as opposed to hiring, the proposed legislative changes and minimum wage hike may actually have a detrimental impact on the very workers that these legislative changes are purporting to help.”
In the Canadian context, researchers have generally found an adverse employment effect of raising minimum wages, especially for young workers. Various studies suggest a 3% – 6% drop in teen and youth employment if the minimum wage is raised by 10%. The Ontario government’s proposals represent an increase to the minimum wage almost three times that amount.
“Chambers of Commerce from across the province along with the Ontario Chamber of Commerce and other industry and business groups have repeatedly called on the Ontario government to ensure that the recommendations of the Ontario Workplace Review are implemented under a cost-benefit analysis process in order to ensure that the changes don’t do more harm than good,” says Ring. “That call is currently being ignored.”
The Sault Ste. Marie Chamber of Commerce is encouraging its members, and other local businesses, to urge the Ontario government to work together with employers to modernize and improve Ontario’s workplace standards. The Ontario Chamber of Commerce along with several of the province’s leading employer bodies (including: Canadian Franchise Association, Food & Beverage Ontario, the Ontario Forest Industries Association, Ontario Restaurant, Hotel & Motel Association, the Retail Council of Canada and Tourism Industry Association of Ontario) recently formed the Keep Ontario Working (KOW) Coalition. Concerned businesses and Ontarians can send a letter to the Ontario government at the KOW website at www.keepontarioworking.ca. Businesses can also contact the Sault Ste. Marie Chamber of Commerce at 705-949-7152 or by email at [email protected]
Johnson notes that the Chamber plans to write the Premier as well as bring its members’ concerns to a discussion with Sault MPP Ross Romano. “It’s imperative,” states Johnson, “that we work with our local business community and with the Ontario Chamber network to save the jobs that small businesses provide.”
Facts about Ontario’s Small Businesses:
Ontario has more than 400,000 employers that are Small and Medium Enterprises (SMEs);
– Small businesses employ over 3,000,000 Ontarians;
-Small businesses make up 98% of all Ontario businesses;
-Of the 1.1m employer businesses active in Canada, micro-enterprises (1-4 employees) constitute 54.1% of all private employers, which is the largest SME group. If the groups of employer businesses with 5-9 and 10-19 employees are included, they account for 86.2% of employer businesses;
-In 2009, almost 90% of Canadian exporters were small businesses and small businesses accounted for $68 billion in exports (25% of Canada’s total export value).
-Small businesses contribute slightly more than 30% to Canada’s GDP.
The Sault Ste. Marie Chamber of Commerce has been the voice of the Sault’s Business Community since 1889. Visit ssmcoc.com.