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Ontario sets minimum wage at $15 – but wait; there’s more, and it’s worse

By Jeni Marinucci

Many are celebrating Ontario Premier Kathleen Wynne’s decision to push the provincial minimum wage to $15 an hour by 2019. Smaller changes to pay will take place first, bumping the current general minimum wage of $11.40 to $14 at the opening of 2018, providing a year for small businesses to hopefully get their plans in order. But while some are toasting the Premier for what they see as a positive action in raising living standards among the province’s lowest paid, there is, of course, another side to the story. Small businesses – many thousands of restaurants and foodservice companies among them – seem to have many reasons to refuse to raise a glass.

The increase accounts for a 32 per cent hike from current levels; no small amount for many business owners. Lobby group Restaurants Canada is among those in opposition, saying Wynne’s party’s action “betrays the trust of Ontario businesses.” The Huffington Post notes the group as saying this increase will eradicate average profit margins of $23,450, since the increase would account for more than an additional $47,000 per year in wages.

Restaurants Canada Vice President for Ontario James Rilett says of the news:

“Today’s announcement is devastating to the thousands of small business owners who hire and train high school students, newcomers to Ontario and others looking for a first start in the labour market.” He added, “There is no question this will lead to fewer jobs, fewer hours, and fewer employers.”

Those receiving minimum wage may also be at risk, as the higher cost of employing multiple employees may lead to less staff on hand, thereby dividing workloads among those who remain employed. And patrons, believing wait staff and servers are now compensated $15 may be less likely to offer gratuities – a mainstay of many restaurant staff’s income.

New minimum wage laws will affect almost 25 per cent of Ontario’s workforce, the highest concentration in Canada. For now, many business owners in Ontario will wait and watch – specifically with eyes on Alberta, where the provincial minimum wage is set to increase to $15 an hour in October 2018, two months ahead of the similar change in Ontario.