MINIMUM WAGE TO TAKE TOLL
Small business owner says prices will increase
A sharp increase in Ontario’s minimum wage has already cost eight of Marc Kobrosli’s employees their jobs and means customers of his dry cleaning service will pay 10 per cent more, he says.
On Jan. 1, Ontario’s minimum wage will jump from $11.60 to $14 an hour. In 2019, it will go up another $1 as a result of the Fair Workplaces, Better Jobs Act (also known as Bill 148), which makes significant changes to the province’s labour laws.
Small business owners are being “thrown in the deep end” by the sudden minimum wage increase, said Kobrosli, the owner of Blondie’s Cleaners in Windsor.
A sign on the countertop at his business tells customers that a 10 per cent across-the-board price increase is solely due to Bill 148. Kobrosli also blames the legislation for his decision to lay off eight employees and close Blondie’s outlets in LaSalle and Amherstburg earlier this year.
He still has 24 full-time and seven part-time workers — most of whom make minimum wage.
“It was money I had to save in wages just for preparation of what was going to happen in January,” Kobrosli said of the staff reduction. “I closed those two locations to soften the blow.”
The domino effect is fewer customers from LaSalle and Amherstburg, which means prices have to go up, he said. “It’s a double-edged sword. I love my employees. They deserve $25 an hour if I could afford it.”
But the minimum wage increase should have been phased in over five years, said Kobrosli. “It’s a lot of pressure on businesses and quality of life is not going to change much for the people on minimum wage.”
Small businesses have been hammered over the last five years by cost increases, particularly for utilities and taxes, he said. “We are fighting to stay competitive by keeping our costs down so our prices are fair to our customers.”
On Jan. 1, the impact of Bill 148 is hitting the business sector, said Matt Marchand, CEO for the Windsor-Essex Regional Chamber of Commerce.
“The chamber asked for this to be phased in over five years,” he said of the minimum wage increase. “We hoped to put everybody in a room together, say here are the objectives and what is the preferred approach to get there .... But it’s done now. We thought that might be a better approach, but the government did not do that.”
The problem is Ontario’s new labour legislation comes on the heels of cap and trade, soaring hydro rates, a serious threat to the future of the North American Free Trade Agreement and changes to the way the federal government taxes small businesses, Marchand said.
“There has been a cost and risk escalation in the past year to the entire cost structure of doing business in Ontario,” he said. “That’s why we preferred a five-year phase-in (of Bill 148). We want to have an attractive story for business in Ontario so they will invest, thrive and stay here. We don’t need to be the cheapest, but among the most competitive.”
The Ontario government has been unmoved by these complaints from the business community.
The changes provide “a minimum wage people can actually live on and modernizes our labour laws to address today’s world,” said Minister of Labour Kevin Flynn.
“Too many families struggle to get by on part-time or temporary work,” Flynn said. “Those working full time can be living in poverty. This is unacceptable in Ontario. Our plan will help ensure everyone who works hard has the chance to reach their full potential and share in Ontario’s prosperity.”
Those who will pay the price include municipal taxpayers.
The City of Windsor has included a $1-million contingency fund in its 2018 budget to deal with fallout from Bill 148, said treasurer Joe Mancina.
Smaller municipalities are expecting to be hit harder because they have a greater number of minimum wage employees and on-call workers, such as firefighters and snowplow drivers — who only work when they are needed. Those workers must now be given benefits that match those of their full-time counterparts.
“It will take us some time into 2018 to understand the full implications,” Mancina said. “The minimum wage will not be a huge impact for us that will drive up costs, but personal emergency days, holiday pay and standby pay will have an effect... By the time we move into 2019, there will be more clarity.”