CFIB urges caution on future minimum wage increases

With the minimum wage in Newfoundland and Labrador increasing to $10.50 an hour today, the Canadian Federation of Independent Business (CFIB) is urging caution on future adjustments.

The provincial government must resist calls for “radical steps like those taken by the Alberta government,” which has promised to increase the minimum wage to $15 per hour by 2018, the CFIB stated in a news release t.

“Between 2005 and 2010, the minimum wage grew by twothirds. Many small businesses struggled to adjust, and had to reduce hours, delay hiring or raise prices as a result,” Vaughn Hammond, CFIB’s Newfoundland and Labrador director of provincial affairs, said in the news release. “Since that time, the provincial government has taken a more measured approach, giving business owners ample time to adjust and plan within their operations.”

The CFIB said the provincial government has also done more to help low-income earners — recent threshold increases in the low-income tax reduction program and improved accessibility to post-secondary education are initiatives that help low-income earners much more than any kind of drastic increase to minimum wage.

“When the minimum wage rises, governments tend to take more, while low-income earners keep less,” said Hammond. “If the goal is to ensure low-income earners have more money in their pockets, the answer lies in the tax system rather than minimum wage increases.”

The CFIB is Canada’s largest association of small- and mediumsized businesses, with 109,000 members across every sector and region.