Minimum wage increases bite into funding boost for summer jobs program
• Rising provincial minimum wages have cut into the reach of the Liberal government’s oft-touted increase to summer jobs spending by reducing the number of weekly hours being funded this year. The Liberals have doubled spending on the politically popular program to approximately $220 million to boost the number of available jobs to 70,000 from about 35,000. Newly released documents show the government was aware in late winter that there would be a drop in the number of hours funded through the program to meet the Liberal government’s summer jobs target. A mid-March briefing note to Labour Minister Patty Hajdu warned of the planned reduction in the average hours per job funded through the program, moving to a national average of 30 hours a week in 2018 from 35 in 2017. Officials wrote that the plan could raise concerns from MPs who like to promote the spending, as well as from employers — particularly organizations that need help paying and attracting seasonal workers. “The reduction is expected to affect organizations that require more weeks in order to sustain their operations (e.g. summer camp) and to attract enough potential applicants,” reads the briefing note, obtained by The Canadian Press under the access to information law. Figures provided by the department suggest officials have eased some of the effects, but there has still been a decline in hours across all 10 provinces. There has been no reduction in funded hours in the territories. A spokeswoman for Hajdu said the government stands by its decision to double the number of jobs through the program, and is “continually looking at ways to improve the program” for students needing “quality summer job experience.”
The annual summer jobs program provides wage subsidies, targeting mostly notfor-profit groups and small businesses with fewer than 50 employees.
The program helps small businesses and organizations manage cash flow in the early stages of a summer placement because students may need time to learn the job before they contribute to an organization’s bottom line, said Ted Mallett, vice-president and chief economist at the Canadian Federation of Independent Business.
“That’s why these government programs are helpful in overcoming those kinds of startup difficulties for small firms.”
Demand for funding always exceeds the amount the government spends on the program and this year was no different.
The total value of all the applications this year was $68.9 million more than last year, a figure the briefing note chalked up to rising minimum wages, particularly in Ontario, Alberta and B.C. Hajdu was told the increases in minimum wage nationally averaged out to a 13.7 per cent bump in wages.
At a kickoff event for the program in late April, one non-profit group pressed Hajdu about the government’s plan to deal with the effects of minimum wage increases on the program.
Hajdu responded that officials were working with provinces and territories. She added that employers approved for funding would make “decisions and determinations accordingly” about hours and duration of summer jobs.
The department overseeing the program recommended 85,000 jobs for funding this year out of the more than 153,500 requests. Officials recommended more jobs than the expected 70,000 because some employers drop out of the program, while others end up being unable to fill the jobs.
Final Canada Summer Jobs figures won’t be known until later this year.