Ontario Minimum Wage Debate Polarizes As Hike Set To Take Effect In The New Year

Ontario, Canada is set to become the first Canadian province to legislate a living minimum wage, and the second to raise the minimum wage to $15 per hour (Alberta will be the first in October, 2018,) in just a few hours. And as zero-hour for the new year and the new wage approaches, voices opposing the increase are being raised louder than ever.

According to The Globe And Mail, many small businesses have expressed their concerns recently over their ability to survive, or the need to raise prices; restaurants are estimated to be the most affected by the change, as the average pre-tax profit for a restaurant in Ontario is only 3.4 percent.

“I’ve just had enough of all the changes. I’m trying to run a small business in a small town,” said Stelios Dimakos, owner of Shorty’s Grill in Owen Sound.

“It’s all of these smaller communities that don’t have the same access to bulk purchasing agreements where you’re going to see restaurants closing,” added Steve Virtue of the non-profit association Restaurants Canada.

Many of the forecasts heading into the minimum wage increase have been grim; TD Bank estimated that the raise could result in the loss of 90,000 jobs by 2020, while the Canadian Centre for Economic Analysis, a for-profit research organization, set their estimate at 185,000.

But others call the concerns drastically overblown.

Ivan Gedz, co-owner of Ottawa restaurant Union Local 613, responded to the concerns by raising his wages $2 higher, to $16 per hour, assessing their menu and raising prices by $0.50 to $1 here and there to compensate. “All those local restaurateurs that said a fair living wage couldn’t be done well,” Gedz added, “frankly you are full of s***.”

Chris Buckley, president of the labor union organization Ontario Federation of Labour, added that “There’s been far too much fear-mongering. The sky isn’t falling.” Buckley noted that if employees are paid more, they’re going to reinvest those wages in their own communities. He said that the increase is “long overdue” and that businesses need to adjust to the changes and “pay workers a decent wage.”

Meanwhile, according to a study from the non-profit research foundation Angus Reid Institute, 6 in 10 Ontarians support a minimum wage increase – with the most notable support coming from women and Millennials. According to polls, two-thirds of Ontario women support the minimum wage increase, compared to about one-half of men, and nearly 4 in 10 Millennials expressed “strong” support for the measure compared with less than a quarter of the older population. Those numbers are especially notable taking into account that only about one in four Ontarians in the workforce will directly benefit – and, as the report notes, women represent 60% of Ontario’s minimum wage workers.

Support was also, interestingly, strongest in households earning $50,000 to $100,000 and lowest (by a significant margin) among those whose households earn more than $100,000 per year.

Most notably, strong support for the measure was twice as common as strong opposition. Whatever the long-term effects, according to the Angus Reid study, Ontario wants a higher minimum wage.

At this point, whatever anyone has to say, the wage increase is coming. While the results remain to be seen, it will be up to businesses to adapt to the reality of a higher minimum wage in Ontario.