The government of Saskatchewan announced on May 3 that the province will raise its minimum wage by one dollar every October from now until 2024. While some organizations have praised the move, Restaurants Canada argues on behalf of Saskatchewan restaurants that it may do more harm than good in the short term.
Saskatchewan currently has the lowest minimum wage in Canada at $11.81 per hour, but it will raise that to $13 in October, then to $14 in October 2023, and then again to $15 in October 2024.
That will see the province temporarily abandon the formula it uses, which dictates an annual minimum wage increase based on the inflation rate. Premier Scott Moe said that after the hike over the next few years, Saskatchewan will go back to the following the formula.
The government release said the increase was moving away from the formula for the next three years to “reflect a move to more closely align workers’ salaries with changing market forces.”
When the first increase takes effect this October, Saskatchewan will have the second-lowest minimum wage. Manitoba will reach $12.35 in October. New Brunswick’s hourly wage will increase from $12.75 to $13.75 in October.
NDP MLA Nicole Sarauer said the timing of the announcement was unusual, with stakeholders like the Saskatchewan Federation of Labour receiving no warning it was coming, per CBC.
Meanwhile, the Saskatchewan Federation of Labour (SFL), which represents more than 100,000 employees, said it welcomes the news of the wage hike but is calling for the minimum wage to be $15 an hour right away and go up from there. Unifor, Canada’s largest union in the private sector, and the Opposition NDP echoed the call.
However, Restaurants Canada released a statement on behalf of “Saskatchewan’s struggling restaurateurs” that said the industry is disheartened by the announcement of a 27 per cent increase over the next three years, noting that the decision “came without consultation”.
“The increase removes predictable and sustainable minimum wage increases at a time when Saskatchewan’s hospitality businesses can least afford it as the industry still continues to rebuild after being one of the hardest hit during the COVID-19 pandemic,” said the Restaurants Canada statement.
The association notes that it has long praised the Saskatchewan government for its approach to increasing the minimum wage by linking increases to CPI and wage inflation, adding that other provinces have followed that approach.
‘”[The] minimum wage announcement comes at the worst time for Saskatchewan restaurants. Operators are already struggling to survive, grappling with increased debt from the pandemic, as well as rising costs, and menu inflation pressure, all while trying to bring back price-sensitive guests to recover and rebuild from the pandemic,” said Mark von Schellwitz, Restaurants Canada’s Vice President of Western Canada.
“[The] announcement will make it even more difficult to hire back employees. It will also result in fewer employment opportunities and less work hours for service staff. The announcement also ignores Restaurants Canada’s ‘do no harm’ recommendation to help restaurants recover.”
Restaurants Canada concluded by arguing that the announced minimum wage increases, which are several times higher than wage inflation, “will simply add labour cost pressure to the entire payroll” as restaurants will need to increase relative wages of all employees.
“Rather than helping to control the inflationary issues plaguing the restaurant sector, yesterday’s announcement will likely fuel inflation – increasing prices for consumers while depriving employees of much-needed hours of work.”