Easing the burden for Ontario businesses
Sometimes what appear to be good intentions can result in bad consequences.
Earlier this year, the previous Liberal government raised Ontario’s hourly minimum wage from $11.60 to $14. The sudden increase of more than 20 per cent was the highest and fastest in our history. And the Liberals promised, if re-elected, to go even higher, to $15 an hour on Jan. 1, 2019.
The last government’s minimum-wage rise was promoted with claims of good intentions, but it came across as crassly political. It seemed designed to foster division and buy votes without considering the negative consequences. Only months earlier the Liberals were supporting a far less disruptive increase to the minimum wage, which was set to increase with the Consumer Price Index for Ontario. It was the looming election that prompted the new policy.
Worse, the sudden rise in minimum wage in Ontario did not achieve what its supporters claimed it would.
Let’s look at the facts to see why.
According to Statistics Canada, after the minimum wage surged up to $14 in January 2018, Ontario immediately lost 59,300 parttime jobs. And recent StatCan data show losses in jobs that typically pay minimum wage.
The worst news came from the August employment data released on Friday. Ontario lost 80,100 jobs — our province’s largest monthly job loss in a decade. Every single one of those lost jobs was a part-time job.
As minister of labour, I always favour higher wages. Incomes should never stagnate. There is a need for the minimum wage to increase as the cost of living goes up. Unfortunately, the previous Liberal government chose to put the burden of an abrupt and dramatic increase on the back of our small businesses.
A sudden 20-per-cent increase in the minimum wage isn’t helping our economy, and a further rapid increase to $15 will not help, either. Ontarians can’t afford another minimum-wage increase driven by ideology, not evidence.
The Liberals told us that a higher minimum wage would keep people employed and help fight poverty. They were wrong.
Employers are finding it hard to cope with the precipitous rise in the minimum wage. In response, they’re cancelling part-time jobs. Ontario is losing the careerstarting jobs that pay minimum wage now, but lead to more work opportunities later.
As for fighting poverty, according to a recent study by the Fraser Institute, only two per cent of minimum-wage earners are single parents with young children. Fully 60 per cent of all minimumwage earners are young people below the age of 25. And 87 per cent of them live with a parent or another relative. When the minimum wage goes up too high and too fast, the vast majority of people who suffer are young people trying to get their start in the labour market. If those career-starting jobs are eliminated, the minimum wage for too many young people won’t be $15 an hour. It will be zero.
The simplest way to create jobs and put more money in people’s pockets is by reducing taxes and other burdens. That’s why in the last election campaign, our government ran on a modest and responsible plan to reduce gas taxes, make businesses more competitive and provide targeted tax relief that ensures minimum-wage earners pay no tax.
Business owners from across Ontario are telling me they need a pause to adjust to this year’s rapid increase. That is why our government promised to keep the hourly minimum wage at $14. And we are keeping that promise.
Ontario’s entrepreneurs and small-business owners understand that cutting red tape and leaving more money in people’s pockets is essential to getting our province’s economy growing again. Workers across all trades and professions treat their hardearned money with respect and they expect their governments to do the same.
The Ford PC government wants to ensure that Ontario is once again an engine of job-creation in Canada. Businesses need to have confidence in reasonable and predictable regulations. That’s why we are going to reduce red tape and regulations while ensuring that workers can continue to have confidence in a good job and safe workplace. As minister of labour, I want to increase opportunity and prosperity for all the people of this province.
Ontario should be the best place in the world to work and run a business. We are blessed with abundant natural resources, a well-educated population and a culture that rewards hard work. By lightening the burden on business and returning predictability to the minimum wage, we are proving that Ontario is open for business.
OUR GOVERNMENT PROMISED TO KEEP THE HOURLY MINIMUM WAGE AT $14. AND WE ARE KEEPING THAT PROMISE.