From the Desk of Chamber CEO Jill Raycroft
Belleville, ON July 21 2017 - It might feel like summer just started but I'm already filling my September calendar with important dates! And, this week and next have some key opportunities to engage with some of our advocacy and local issues.
I have joined the Advisory group for Welcome to the Room - a committee formed through the East Central Ontario Training Board (ECOTB) that is trying to develop real solutions to the challenges you face as employers. We have good representation from "large" employers but do watch for opportunities to provide feedback to the issues identified and how they affect you - particularly if you have fewer than 50 employees.
I also attended the Keep Ontario Working session in Kingston hosted by their Chamber of Commerce and presented by Karl Baldauf from the Ontario Chamber of Commerce. He was there to talk about their efforts at a provincial level to pause the implementation of the Fair Workplaces Bill 148. Earlier this week, I received an e-mail suggesting I don't support the increase and I want to clarify that as your representative for the Chamber of Commerce - it is not my personal opinion that's important but what you're telling me is important to you!
In response to our survey regarding the impact of the Minimum Wage increase - you told me that:
- You were in support of a living wage and employees being treated fairly
- 71% with fewer than 50 employees already pay higher than minimum wage
- 33% will cut back on community support or sponsorship in order to afford the costs
- 4% may consider closing their doors
- 38% suggested they would raise the wages of the current employees in order to reward them for their years of service but many of you suggested this is the real challenge - hiring someone new at $15 is tough when it took someone 3 - 5 years to get there (considering that minimum wages are still at $11.40 now).
Overwhelmingly, you explained that the costs of the increase are simply happening too fast in conjunction with rising hydro, CPP & EI rates next year and the general cost of doing business. In response, you may not hire new people or expand your business and may even need to reduce hours or worse, lay off employees.
In the session with Karl Baldauf - we heard a couple of stories that demonstrate some of the unintended outcomes of such a swift move because for those paying close to these rates, costs will be reflected in the price the consumer pays. And, when costs of basic consumer goods rise - in grocery stores, coffee shops, moving or cleaning services - the most vulnerable are at the greatest risk. It will be their hours that are cut and their jobs at risk. Worse, for those employed and being paid more - if it is service based - the business is less likely to grow or be able to compensate at a comparable increase.
- one business owner suggested that business owners post a "minimum wage increase surcharge" sign on their invoices, so when customers wonder why prices have increased (something like the fuel or environmental surcharge we saw on airline tickets) - this would be why. He suggested it will take about 3 years to catch up to the hike.
- a cleaning service franchise that pays an hourly rate higher than minimum wage, offers production bonuses, benefits and even car allowances and provide bonded & insured employees to their clients - will have to increase their fees. 30% of their clients are seniors who are able to stay in their homes longer because they can afford the current rates. On a fixed income, how will seniors be able to afford the hike in costs? And then what is the burden to the system as these seniors need to seek out assisted living spaces?
- an organization that assists developmentally delayed adults perform meaningful tasks they enjoy are only permitted to earn a maximum amount before their ODSP support is halved. With the increase in the wage rate, they will have to work fewer hours or risk losing their primary source of income. They have asked if they could have a "wage freeze".
- many non-profits rely on the support they receive from local businesses; if this support decreases while their costs increase - how will they continue to deliver the services they currently offer to the very population this is intended to help
None of these businesses begrudge a higher or living wage.
They simply don't believe it is fair to them or their employees to have it happen so fast and feel they have become the pawn in a political agenda for an unpopular government.
It also does not recognize how those "good" employers have already stepped up to the plate and legislates all employers based on those few that do take advantage of a minimum wage rate.
There are some options the OCC hopes to present that may reduce the impact through lowered Business Education Taxes, Corporate Income Tax rates, EHT, Small Business Deductions and even the HST Rebate percentage for non-profits.
Over the next few weeks, the OCC has asked us all to reach out and tell the story of how this will affect you, your employees and your customers. You can reach out by mail or by phone or through me or go to the OCC's site - keepontarioworking.ca