Ontario minimum wage hike could lead to 50,000 job losses: provincial watchdog
by Shawn Jeffords, The Canadian Press
In a new report, Ontario's Financial Accountability Officer said the dramatic nature of the increase to $15 per hour will give companies a greater incentive to cut costs
The province revealed the plan to raise the minimum wage to $15 an hour by 2019 earlier this year. PHOTO: Premier of Ontario Photography/Flickr
TORONTO—More than 50,000 people could lose their jobs if the Ontario government goes ahead with its plan to raise the minimum wage to $15 an hour by 2019, the province’s financial watchdog said Sept. 12.
The job losses would be concentrated among teens and young adults, while the number of minimum wage workers in Ontario would increase from just over 500,000 to 1.6 million in 2019, said a report released by the province’s Financial Accountability Office.
FAO chief economist David West said Ontario is entering “uncharted waters” with the increase because no other jurisdiction has gone so far so quickly.
While the increase will have a positive impact on the province’s total labour market income—hiking it by 1.3 per cent—it will also result in the job losses over a number of years.
“There’s evidence to suggest these job losses could be larger given the magnitude and rapid pace of this increase,” West said.
In July, Premier Kathleen Wynne announced her government would increase the minimum wage to $15 an hour by Jan. 1, 2019. The increase would be phased-in gradually and would rise with inflation, as scheduled, from $11.40 currently to $11.60 in October, to $14 an hour on Jan. 1, 2018 and $15 the following year.
Labour Minister Kevin Flynn said that because of the province’s strong economy the government can move forward with the minimum wage increase. He pointed to studies written in recent years by the Organisation for Economic Co-operation and Development, the Center for Economic and Policy Research and the Canadian Centre for Policy Alternatives that support the move.
“We don’t believe that anyone in Ontario who works full time should be struggling to pay their rent, put food on their tables or care for their families—especially when the provincial economy is doing so well,” Flynn said in a statement.
Groups representing both small and large businesses across Ontario have warned that the minimum wage increase would lead to layoffs. Karl Baldauf, spokesperson for the Keep Ontario Working Coalition, said the FAO report illustrates why the government should proceed with caution.
“(The government) needs to conduct an independent economic analysis and they need to adjust their plan depending upon what that analysis proves to them,” he said.
The provincial government agreed to tweak its labour reform bill last month, but has so far resisted any changes to its minimum wage increase or the hike’s timetable.
