The right balance
Every province in Canada is grappling to find the right balance in the minimum wage debate but the issue presents a special challenge for Atlantic Canada. The region has long suffered from high unemployment and low wages – a combination that cripples efforts to retain young people.
There is a growing trend among provinces like Ontario, Alberta and British Columbia to raise the minimum wage to $15 an hour within the next two to three years. It’s a number that many suggest offers a reasonable living wage.
It also creates a major concern in this region among governments and businesses. The issue is now before the Nova Scotia legislature where the NDP has presented a private members’ bill to reach that $15 number. It has sent Premier Stephen McNeil scurrying for cover because his province now has the lowest minimum wage in the region - $10.35 for inexperienced and $10.85 for experienced workers. New Brunswick and Newfoundland and Labrador have reached $11 and P.E.I. is at $11.25.
The Canadian Federation of Independent Business warns that a $15 minimum wage is a job killer – especially for Atlantic youth – because it could see 29,000 job losses among young people across the Atlantic region. To their credit, most CFIB members pay above minimum wage levels, but certain sectors that employ large numbers of young people and students – such as retail and hospitality – say they can’t afford large increases in the minimum wage. Nationally, if all provinces adopt a $15 an hour minimum wage, it’s estimated that between 185,000 to 422,000 youth jobs would be at risk.
What really angers businesses are surprise increases. Provinces, which have announced plans to move towards $15 an hour, at least have signaled their intentions and established timelines to reach graduated increases. Others are not so obliging.
This spring, for example, the P.E.I. government announced plans to increase its minimum wage to $11.25 April 1. Island businesses had little more than a month to prepare, and understandably, there was widespread criticism.
The Greater Charlottetown Area Chamber of Commerce – which represents more than 1,000 businesses - was quite vocal because there were already two wage increases in 2016. If provinces are going to legislate increases in the minimum wage, they must consult businesses well in advance about their plans.
A lesson was learned here. The province did agree that any future increases to P.E.I.’s minimum wage would be announced well in advance and will always occur on April 1.
The N.S. government says it wouldn’t be raising the minimum wage this year and argues that a $15 rate would have a devastating effect on its business sector. It may not have a choice. If it wants to keep educated young people at home, it will have to pay a competitive wage.
Finding a balance in Atlantic Canada will become an increasing challenge. If central and western provinces offer $15 an hour, will young people stay here for $11 or $11.25? It’s doubtful.