Labour Relations and Employment Standards Changes Too Much, Too Fast
Coalition of Chambers of Commerce and business groups call for Ontario Government to give employers more time to adjust to sweeping reforms
Toronto, ON / Sault Ste. Marie, ON – Today, the Keep Ontario Working group, a coalition of Ontario’s leading industry and sector associations, sent an open letter to Ontario Premier Kathleen Wynne which urges the Government of Ontario to slow down the implementation of Bill 148. The Fair Workplaces, Better Jobs Act will bring about major changes in less than six months, and Ontario’s employer community is concerned that the pace of change will seriously injure our economic growth. The Keep Ontario Working (KOW) coalition is calling on the provincial government to give businesses more time to better prepare.
In their letter, the Keep Ontario Working group calls on the government to consider the timing of implementation. As it stands now, Ontario’s minimum wage will increase by 32 per cent in only 18 months.
“To demonstrate true fairness and compassion for workers, we must ensure Ontario has a strong economy to help create jobs and increase economic growth,” says Karl Baldauf, Vice President of Policy and Government Relations at the Ontario Chamber of Commerce (OCC) and spokesperson for the Keep Ontario Working Coalition. “To plan effectively and protect jobs, employers need predictability and time to adjust to these changes. There is no way to absorb and adjust to a 32 per cent hit in less than 18 months.”
Chambers of Commerce from across the province along with the OCC 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.
Due to the Government of Ontario’s unwillingness to appropriately test the economic impacts of the legislation, the Keep Ontario Working coalition has commissioned its own thorough and comprehensive assessment to fully evaluate the damage these changes will generate. The results of the coalition’s economic analysis will be shared in August.
Sault Ste. Marie Chamber of Commerce (SSMCOC) President Paul Johnson reinforces the letter’s assertion that Ontario’s small and medium sized businesses are the lifeblood of communities, creating local jobs and increasing economic growth. He notes that the SSMCOC Chamber recently surveyed its members and asked them to rate their level of concern on a number of the 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,” says Johnson.
To meet the added business costs that are anticipated under the increased minimum wage and other proposed changes to employment legislation, 64% of local 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.
The Sault Ste. Marie Chamber of Commerce has been 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. 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]
The SSMCOC’s concern surrounding the pace of change is not isolated to the minimum wage in Ontario, but encompasses all aspects of the legislation. Changes to other areas, such as equal pay for temporary and part time workers, scheduling and emergency leave days will carry significant new costs for employers, costs that must be contended with in order to avoid maximum job losses.
The SSMCOC is also expressly concerned about the timing of the proposed changes as they come at a point when the province’s businesses, small businesses in particular, are still coming to terms with the effects of a 300% increase in hydro rates. Locally, the cost of Ontario’s cap-and-trade program is expected to remove $25 million from the Sault’s economy, while businesses will also be contending with increased property taxes and ratios. Sault Ste. Marie employers simply cannot pass all of these increased costs on to the consumer, especially in a market that must compete with online and cross-border competition.
Rory Ring, CEO of the Sault Ste. Marie Chamber of Commerce notes that while the agency and its membership of 700 plus local businesses recognize that social economic prosperity needs to be addressed, doing so through rapid increases to wages and legislation that drives up employer costs is not going to result in a positive economic outcome. Ring notes that, “the public must be prepared to pay more for everything because a minimum wage of $15/hr will result in higher prices across the board, including everything from cost of goods to rent to taxes; and those prices are going to increase for everyone, including those that will not be benefiting from increases in salary, pensions other subsidies.”
Ring adds, “the minimum wage increase and the Workplace Review legislation will ultimately result in less economic activity and will reduce the number of job-generating entrepreneurs who build businesses that employ people. That is the message coming from those individuals and business that actually create Ontario jobs.”
Read the letter below:
Dear Premier Wynne:
On behalf of Ontario’s employer community, the Keep Ontario Working coalition is writing to you today with a call for fairness and restraint as the Ontario legislature’s Standing Committee on Finance and Economic Affairs begins province-wide consultations. As we have said since the introduction of Bill 148, the impacts from this legislation will create tremendous uncertainty for Ontario businesses. Realistic legislative timelines can only be proposed following a full economic impact analysis.
Economic Impact Analysis
Ontario’s small and medium sized businesses are the lifeblood of communities, creating local jobs and increasing economic growth around the province. In recent months we have received emotional stories from employers who believe that the impacts from Bill 148 will be profoundly negative and cause significant job loss and financial burden. Many of these businesses have expressed concern that the planned implementation of such drastic labour reforms does not give them the appropriate time to adjust.
Due to the Government of Ontario’s unwillingness to appropriately test the economic impacts of your legislation, the Keep Ontario Working coalition has commissioned our own thorough and comprehensive assessment to fully evaluate the damage these changes will generate. This independent analysis will be completed in August and we will share it with you and all of Ontario’s workers and employers at that time.
Pace of Change
Many Ontario employers, especially small businesses, are now considering closing their business because they do not have the capacity to successfully manage such reforms. In the case of the minimum wage, for example, the business community was wholly aligned with your government’s previous approach, which allowed for increases to the minimum wage that were predictable and protected against arbitrary political decision-making. We object to this new approach, which will provide an arbitrary increase. If your government is intent on this public policy change, we ask that you proceed in a way that allows businesses to better prepare.
Since 2010, the minimum wage in Ontario has increased by 12 per cent. Under your proposed changes, employers would be required to increase the minimum wage by a further 23 per cent in six months, followed by another 11 per cent a year later. This represents a total increase of 32 per cent over just 18 months.
When looking at other jurisdictions who have introduced similar wage increases, the timelines for full implementation are significantly longer than ours. For example, the State of California is taking five years to increase their minimum wage by 50 per cent to $15/hour with employers of less than 25 employees. Seattle has allowed for a 4-year implementation for a 36 per cent wage increase. However, even there, recent evidence by the National Bureau of Economic Research has suggested that the costs of the Seattle minimum wage increases outweigh the benefits by 3:1. In that instance, low-wage workers are losing $125 per month due to less hours of work scheduled.
We know that over the planning period, especially with an increase to minimum wage, the cost of goods will rise, as will utility and occupancy costs (such as leases and ownership), as well as municipal taxes.
To plan effectively and protect jobs, employers need predictability and time to adjust the cost of other inputs where we can. There is no way to absorb and adjust to a 32 per cent hit in less than 18 months, the bulk of which is an even more unmanageable 23 per cent increase a mere seven months out.
Our concern surrounding the pace of change is not isolated to the minimum wage in Ontario, but encompasses all aspects of the legislation. We know that changes to other areas – such as equal pay for temporary and part time workers and scheduling – will carry significant new costs for employers, costs that must be contended with in order to avoid maximum job losses.
We urge you to slow the pace of the Fair Workplaces and Better Jobs Act. We are extremely concerned that the proposed legislation will have negative impacts on the growth of our province’s economy, our people, and our communities. This does not demonstrate fairness.
To demonstrate true fairness and compassion for workers, we must ensure Ontario has a strong economy to help create jobs and increase economic growth. Ontario’s workers and employers deserve to truly understand the impact of your decisions. That is why we urge you not to rush these reforms, and to consider the economic impacts that will be revealed as a result of our comprehensive economic impact analysis in August.
We are committed to working collectively with your government to ensure that workers in this province can continue to prosper. For that to occur, we must continue to work together and ensure we are doing all we can to protect against job losses, increased costs to consumer goods, and economic hardship.
Keep Ontario Working coalition:
Association of Canadian Search, Employment and Staffing Services (ACSESS)
Canadian Franchise Association (CFA)
Food & Consumer Products of Canada (FCPC)
Food and Beverage Ontario (FBO)
National Association of Canada Consulting Businesses (NACCB Canada)
Ontario Restaurant, Hotel and Motel Association (ORHMA)
Ontario Chamber of Commerce (OCC)
Ontario Federation of Agriculture (OFA)
Ontario Forest Industries Association (OFIA)
Ontario Real Estate Association (OREA)
Retail Council of Canada (RCC)
Tourism Industry Association of Ontario (TIAO)