Labour Relations and Employment Standards Changes Too Much, Too Fast The Keep Ontario Working coalition calls for Ontario Government to give employers more time to adjust to sweeping reforms PETERBOROUGH, July 10, 2017: The Keep Ontario Working group, a coalition of Ontario’s leading industry and sector associations, has sent an open letter to Ontario Premier Kathleen Wynne which urges the Government of Ontario to slow down the implementation of Bill 148.
The Fair Workplaces, Better Jobs Act will bring about major changes in less than six months, and Ontario’s employer community is concerned that the pace of change will seriously injure our economic growth. The Keep Ontario Working coalition is calling on the provincial government to give businesses more time to better prepare. As part of the Ontario Chamber Network the Peterborough Chamber of Commerce is supportive of the letter. “Recently, a roundtable with 24 businesses from all sectors of the Peterborough economy expressed the same message - that the changes were too much, too fast,” says Stuart Harrison, President & CEO, Peterborough Chamber of Commerce. “Businesses need to time to adapt and have told us that without time they are forecasting fewer hours, fewer new jobs, increased prices and, in some cases, more automation.” In their letter, the Keep Ontario Working group calls on the government to consider the timing of implementation. As it stands now, Ontario’s minimum wage will increase by 32 per cent in only 18 months. “To demonstrate true fairness and compassion for workers, we must ensure Ontario has a strong economy to help create jobs and increase economic growth,” said Karl Baldauf, Vice President of Policy and Government Relations at the Ontario Chamber of Commerce (OCC) and Spokesperson for the Keep Ontario Working Coalition. “To plan effectively and protect jobs, employers need predictability and time to adjust to these changes. There is no way to absorb and adjust to a 32 per cent hit in less than 18 months.” The Keep Ontario Working coalition has commissioned its own an independent economic analysis to better understand the economic impact of these changes. The results of the coalition’s economic analysis will be shared this coming August. Read the open letter to Premier Kathleen Wynne -30- The Keep Ontario Working Coalition (KOW) is a broad-spectrum group of business sector representatives concerned with sound public policy to help produce jobs and grow Ontario. For more information on the Keep Ontario Working coalition please visit www.keepontarioworking.ca. Media Contact: Sandra Dueck Policy Analyst/Communications Specialist [email protected] or 705.748.9771 x215
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Facing a 30 percent plus increase in the minimum wage over the next 18 months has many local businesses wondering how they are going to fulfill this potential legislative demand. We put 24 small business owners and managers in a room with the Minister Responsible for Small Business, and Peterborough MPP Jeff Leal for two and a half hours, and the overwhelming feedback was that the proposed changes were “too much; too fast”. From restaurants to retailers, manufacturers to Not for Profits, all were talking about fewer hours for employees, fewer new hires, job cuts, automation and increased prices. Anyone who wishes to criticize the small business owner for this reaction needs to spend some time with them, finding out just what it takes to meet payroll these days.
Meanwhile, earlier this year the provincial government announced three pilot projects (Lindsay, Hamilton, and Thunder Bay) designed to test the concept of a Basic Income Guarantee. Under the program single recipients would receive up to $16,989 from the government, less 50% of any income earned. Calculations show that the income one would have to earn before they were no longer eligible for a portion of the basic income amount would be $33,978. If minimum wage increases go through and the employee works a 40 hour week, their yearly earnings before taxes would be $31,200. Over the next three years, the Basic Income Pilots will also measure outcomes around:
Outcomes from this study have the potential to provide very good information on which to base a decision on how to best serve vulnerable workers and those on low incomes. And yet, the Government is not willing to wait. Instead they are pushing through $15 Minimum Wage legislation on such a short timeline that even employees are worried, recognizing that in order to make $15/hour they need to have a job… There’s no doubt all eyes are on Seattle right now as that city moves forward toward a $15 minimum wage. Many aspects of the Seattle policy have been studied, but a recent study from the University of Washington showing the latest increase to $13 resulted in a decrease of income paid to low-wage employees of $120 million or a loss $125/month for each worker. This suggests that the concerns of the typical small business owner and their employees are valid. Ontario’s minimum wage is currently tied to the Consumer Price Index and has been increasing yearly since 2014. The Ontario government had the forethought to establish Basic Income Guarantee Pilots to assess the impact of such a program on low income workers. The impact of free tuition for students from low income households has not been fully assessed. These are good policies and pilots that could reach into the core of the issue of income security and make a difference. Business can be a willing partner, but forcing a 30 percent plus increase through wages onto small and medium sized businesses at a time of high hydro rates, increasing WSIB and CPP premiums, and more inspectors to police it all, challenges the perception that Ontario is open for business. Read more on the issue: Enough talk about the fat cat business owner The unintended consequences of a $15 minimum wage keepontarioworking.ca The decision behind last week’s announcement to increase the minimum wage to $15 per hour appears to have been made with scant evidence and little or no consultation. The Changing Workplaces Review Committee had been meeting for two years, enjoyed broad stakeholder input and explicitly excluded minimum wage from the discussion. Indeed, the process for establishing minimum wage was just introduced two years ago, tying the minimum wage to the Consumer Price Index. This was to avoid what had become the pattern – no minimum wage increases for years, followed by a dramatic increase, with no warning, for political purposes. The Chamber of Commerce network is calling for some evidence based thinking. In the few days following last week’s announcement, dramatic and overwhelming evidence has been provided by local small business people, members of both the Peterborough Chamber of Commerce and the Kawartha Chamber of Commerce & Tourism: Local Manufacturers - “I’ve just won a contract to supply another local company with my product. This is a major order that will require an expansion of my business, including a building addition and hiring more people. At $15/hr, I am no longer competitive and will have to walk away from the work. I thought hydro rates, now my largest business expense, were hard enough to deal with. This is impossible.” / “We do agree with wage increases over time but such a large one up front will definitely hurt our small business. We are a new business of only 7 years and will have to cut hours to stay competitive in the market we are in. Yes, people will receive more, but they will also be paying for taxes back to the government. Someone has to pay for all this, and sadly it will be the consumer.” Local Not for Profit – “with 35 employees during the summer, our labour costs just went up 30%! We will use a combination of hiring fewer people, shortening shifts and increasing prices to adapt. Unfortunately, hiring fewer students for the summer will be the first move.” Local Restaurants – “Our payroll will increase by over $90,000 dollars…I see hiring fewer people, increasing prices, automation, and phasing out employee benefits. This is the most devastating cost to hit the hospitality industry – ever…”/ “Higher hydro bills and propane prices, and now a $15 minimum wage? I will decrease my operating hours, cut down hours for current staff members; I will not hire new staff, but instead have my family work with me for longer hours, and I will raise menu prices - which is my least favourite option, since I run the risk of becoming unaffordable for my customers. Without customers, we’ll be closed.” Local Retailers – “At this point we have estimated that this increase will cost us upwards of $50,000.00 a year. Where is that coming from, profit, which is used to grow our business.” / “Every single one of my employees makes more money than I do… Enough talk about the fat-cat business owner…” / “The government continually praises small business as being the backbone of the economy, yet measures like this increase the burden on small business. This legislation would increase my payroll costs by approximately 20%. I will have to choose between significant price increases, reducing staff or closing the door.” / “Increasing minimum wage to $15 will affect our entire pay scale. An employee currently making $15 an hour has earned it through experience, training and proving themselves.” / “This drastic jump will be financial suicide for many small businesses. Price increases, a hiring freeze, a cut back in operating hours. This new minimum wage strategy will without a doubt increase unemployment!” / “We are still in shock – why so fast? The previous increases were gradual and better able to be factored into our business models.” / “More than half of my business is serving the other local businesses in Peterborough. If those businesses are suffering and feeling the pinch my store will be negatively impacted by this as well. Honestly, I fear that there will be very few winners - one of them possibly being the government, through increased tax revenues - and way too many losers.” Local Farmers - “We will have to condense our Pick Your Own business to one farm only, cutting out 4-6 seasonal jobs each year, at a minimum. We will almost certainly have to raise our prices as our margins are already so small that there are years we come close to only breaking even. One of our biggest worries is the 48-hour rule for cancelling staff. If we have in the peak of our season 30 people regularly scheduled for work and have to cancel them because of the weather...that means we are still paying out 90 hours of work for one cancelled day. This will certainly break us, as well as many other farmers.” Local Accommodation/Hospitality - "We will need to seriously consider the viability of our tourism product, with projected increases needed in the 5 – 10% range to cover not only the immediate wage increase but all the other liability increases that will go along with it. It may not be feasible for us to operate past December, which will result in the layoff of 5-8 full time employees.” / “In order to maintain remuneration integrity I will have to increase everyone’s wage by 23%. In my business’ case that would represent a $50,000 extra annual cost. I would have to increase my consumer rates by 12% to offset the wage increase. I have not been able to increase rates since 2001, so I will be forced to cut back on labour, hire fewer employees, reduce hours, increase prices, sell the business, or simply shut down.” Our recommendations include:
The Premier’s own 2014 Minimum Wage Panel concluded that for every 10% rise in Minimum Wage, teen employment drops by 3 – 6%. The citizens of Ontario are already reeling from the loss of some 300,000 manufacturing jobs in the last ten years. The economy is in transition and under tremendous competitive stress. This increase will be a shock to the economy, with unintended consequences. The Provincial Government needs to prove their case with well-researched evidence. What we are hearing from our members: Local Manufacturer – “I’ve just won a contract to supply another local company with my product. This is a major order that will require an expansion of my businesses, including hiring more people. At $15/hr, I am no longer competitive and will have to walk away from the work and the expansion. I thought hydro rates, now my largest business expense, was hard enough to deal with. This is impossible.” Local Tech Company – “Layoffs likely and price increases for sure” Local Not For Profit with 35 employees during the Summer – “Our labour costs just went up 30%! We will use a combination of hiring fewer people, shortening shifts and increasing prices to adapt. Unfortunately, hiring fewer students for the summer will be the first move” Local Retailer – “Increasing Minimum wage to $15 will affect our entire pay scale. An employee currently making $15 an hour has earned it through experience, training and proving themselves. They certainly won’t be happy making the same money as en entry-level employee. Our costs will increase approximately 8% and while we can increase prices over time, it has to match our competitors, so our only tool in the short term is an equal reduction in the number of hours.” Local Retailer – “Increasing Minimum wage to $15 will affect our entire pay scale. An employee currently making $15 an hour has earned it through experience, training and proving themselves. They certainly won’t be happy making the same money as en entry-level employee. Our costs will increase approximately 8% and while we can increase prices over time, it has to match our competitors, so our only tool in the short term is an equal reduction in the number of hours.” Local Retailer – “Increasing Minimum wage to $15 will affect our entire pay scale. An employee currently making $15 an hour has earned it through experience, training and proving themselves. They certainly won’t be happy making the same money as en entry-level employee. Our costs will increase approximately 8% and while we can increase prices over time, it has to match our competitors, so our only tool in the short term is an equal reduction in the number of hours.” Local Restaurant – “At $14/hr payroll increases by $70k, at $15/hr an additional $23k… I see hiring fewer people, increasing prices, phasing out employee benefits such as group benefits, free uniforms, free meals, etc. This is the most devastating cost to hit the hospitality industry – ever…” The call will continue for an economic impact analysis around the proposed changes to the Employment Standards Act (ESA) and the Labour Relations Act (LRA). The provincial government is planning to introduce legislation today (Thursday, June 1) to put in motion the changes announced on Tuesday. That means over the summer months the legislation will make its way through committee. Yes, the proposed changes are the result of a two year review by two special advisors, and the Ontario Chamber of Commerce and by extension the Peterborough Chamber of Commerce participated in those discussions, but the challenge is we’ve yet to see or know of an economic impact analysis of the changes. This information is vital to ensuring that the province is moving forward with eyes wide open. “Minimum wage was explicitly left out of the Changing Workplaces conversation, so we’re not sure what’s guiding today’s announcement,” says Stuart Harrison, President & CEO, Peterborough Chamber of Commerce. To suddenly legislate the most dramatic minimum wage increase in Ontario’s history creates serious concern about unintended consequences.” In the announcement of the Fair Workplaces and Better Jobs plan, Premier Kathleen Wynne highlighted five main changes to the Employment Standards Act:
As of January 2019 it will rise to $15/hour After that increases in minimum wage will be tied to inflation (as is currently the case)
Increased vacation time to 3 weeks after five years of service with the same employer Fairer rules for scheduling An employer must pay an employee for 3 hours of work if a shift is cancelled without 48 hours notice
Under the Labour Relations Act some of the changes include:
Currently, the following professions are excluded from collective bargaining: domestics, hunters and trappers, members of the architectural, dental, land surveying, legal or medical profession and agricultural and horticultural employees. The Special Advisors recommend that these groups should be covered by the LRA.
All of these changes will have compounding costs which the government has not yet fully understood. That is why the Chamber Network and the Keep Ontario Working Coalition have called on the government to conduct a comprehensive economic impact analysis. This analysis should have clear acceptability thresholds, and the reforms implemented should be limited to those that pass such thresholds or are being implemented with a commensurate economic offset measure, in order to help businesses transition into any regulatory changes. We have heard from members who say the impact will be felt throughout their businesses. “We are really good local employers in the not-for-profit sector, during peak season we have 35 employees. Our staff is well respected in our workplace, we are generous with our current benefit plans, and we offer great summer employment options to university/college students (full time throughout the whole summer). 18 months, and a 30% plus rate increase --- how could any business adapt to that without sacrificing customer service, increasing prices AND reducing overall staff level?” As the provincial government moves this legislation through the committee process over the summer we urge them to truly understand the economic impact of these changes that have great potential to hurt job creation, consumer costs, and economic growth. How will this affect your business? Let us know: [email protected] Provincial Government Statement Local Retailer – “At this point we have estimated that this increase will cost us upwards of $50,000.00 a year. Where is that coming from, profit, that is used to scale our business, and for the creators/the risk takers to feed our families.” Local Multi-Business Owner – “We have always operated our businesses with a view to a one, three, and five year strategic plan, uncertainty about general economic conditions, makes planning difficult at best. The proposed changes were not on anyone's radar 12 months ago so we are left re-evaluating our plans. We had planned a fairly major expansion to begin in the next 6-12 months, those plans are now on hold and possibly cancelled. We will in all likelihood be forced to freeze hiring and possibly implement some layoffs, hopefully these will not be permanent in nature. We are in a competitive sector but we will, like our competition, be forced to pass along increased costs to our customers where possible. Some of our business ventures are price regulated, so we are vulnerable here to the decisions of the regulators.” Local Property Management Group – “We may need to look at price increases across the board, but for our residential properties it will be more costly housing as we increase the market rent of our units as they turn over; ultimately a cycle – we have to increase housing amounts accordingly and those making the new minimum wage still may not be able to afford the accommodations and, it will ultimately affect anyone on a fixed income. In any event, I expect many of our expenses would increase as the increase in minimum wage will also affect their business and they in turn will pass that cost along to us.” Keep Ontario Working Coalition: Ontario Deserves Evidence-Based Reform Changes Will Hurt Job Creation, Consumer Costs and Economic Growth PETERBOROUGH, May 30, 2017 – The Keep Ontario Working coalition, in partnership with the Peterborough Chamber of Commerce and the Ontario Chamber of Commerce (OCC), today expressed concern that the Government of Ontario’s Fair Workplaces and Better Jobs Plan, commits to unproven sweeping reforms without ensuring protection against unintended consequences, including job losses, rising consumer costs, and economic hardship.
“The Chamber Network has been involved with the Changing Workplaces Review over the past two years,” says Stuart Harrison, President & CEO, Peterborough Chamber of Commerce. “Minimum wage was explicitly left out of the conversation, so we’re not sure what’s guiding today’s announcement. To suddenly legislate the most dramatic minimum wage increase in Ontario’s history creates serious concern about unintended consequences.” The Keep Ontario Working Coalition (KOW) is a broad-spectrum group of business sector representatives concerned with sound public policy to help produce jobs and grow Ontario. As noted in the Business Prosperity Index of the Ontario Chamber of Commerce’s 2017 Ontario Economic Report, despite projections that Ontario will lead Canada in economic growth in the coming years, diminished profitability, lower labour market participation, and sluggish market activity; along with other key factors have resulted in a risk-averse atmosphere that businesses are disinclined to grow production. Businesses are questioning if they should grow in Ontario or expand offshore. Despite that, Ontario’s private sector is still doing its part to support workers. As the Government pointed out in Budget 2017, 98 per cent of all new jobs since the recession in Ontario have been full time, and 78 per cent in above-average wage industries. This positive economic activity by Ontario’s private sector demonstrates a clear commitment to good jobs throughout our province. Statement The following is a statement by the Keep Ontario Working Coalition on the Government’s proposed workplace reforms: “We share in the Government’s desire for broadly inclusive growth. However, in order to achieve this, we need to ensure that we are not risking job losses, rising consumer costs, and economic hardship as a result of over-regulation. “Government cannot regulate prosperity. To demonstrate true fairness and compassion for workers, we must ensure Ontario has a strong economy to help create jobs and increase economic growth. “That is why we are urging the government to take time this summer to have an independent third party conduct a comprehensive economic impact analysis on the proposed reforms to consider the unintended consequences to employers. In addition, as the province’s biggest employer, the government must fully understand what these changes will cost in relation to the provincial treasury as well as social services and other government agencies. “Why is evidence-based policy important? Only three years ago, the Premier’s own Minimum Wage Advisory Panel conducted extensive research and concluded: ‘In the Canadian context, researchers have generally found an adverse employment effect of raising minimum wages especially for young workers…typically those studies find that teen employment would drop by 3 to 6 per cent if the minimum wage is raised by 10 per cent.’ “While the Changing Workplaces Review cautioned that any regulatory change shouldn’t impair the competitiveness of businesses in the province, the reforms outlined in Fair Workplaces and Better Jobs Plan thus far do not provide the balance needed to help ensure a competitive environment for Ontario. “But we have time. Now we must work cooperatively with government to identify the scale of the economic impact of these changes and help employers transition into any new policy regime. We will continue to be cooperative partners with government to find solutions that will, where possible, inhibit negative impacts on the growth of Ontario’s economy, our people, and our communities.” - 30 - Keep Ontario Working Coalition Members Association of Canadian Search, Employment and Staffing Services (ACSESS) Canadian Franchise Association (CFA) Food & Consumer Products of Canada Food and Beverage Ontario (FBO) National Association of Canada Consulting Businesses (NACCB Canada) Ontario Restaurant, Hotel and Motel Association (ORHMA) Ontario Chamber of Commerce (OCC) Ontario Federation of Agriculture Ontario Forest Industries Association (OFIA) Restaurants Canada Retail Council of Canada (RCC) Tourism Industry Association of Ontario (TIAO) www.keepontarioworking.ca Media Contact: Sandra Dueck Policy Analyst/Communications Specialist Peterborough Chamber of Commerce [email protected] 705-748-9771 x215 |
AuthorThe Peterborough Archives
January 2018
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