The Ontario government recently rolled out proposals to amend the province’s employment standards act and labour laws (as part of its Fair Workplaces, Better Jobs Act, 2017).  The centrepiece of these reforms is undoubtedly the boost to the minimum wage —set to rise gradually from the current $11.60 per hour to $14 per hour as of January 2018, and then to $15 per hour in January 2019.

What does that kind of increase mean for the Canadian job market? We took a closer look.

What are the benefits to raising the minimum wage?

Minimum wage is the lowest hourly wage rate an employer is required to pay its employees, regardless of whether they work full time or part time, in a casual job, or if they’re working by the hour or in a salaried position. Some employees, such as students under 18 and servers in a bar or restaurant, are exempt from the minimum wage; both tend to earn less than the lowest cut-off, but in the case of servers that difference is often made up or even topped by tips. The lower minimum wages for these employees will also rise under the proposed changes, even if it remains below the general minimum wage.

So, if you’re in a job that currently earns minimum wage, you should see more money in your bank account if Bill 148 passes, with a gradual change set to keep step with inflation. That’s obviously good news for individual workers, but many believe this change will also grow the economy – after all more people will have money to spend.

Why are some people against it?

The proposed changes are being met with some resistance. As outlined in numerous news reports, business groups representing the restaurant and retail industries, among others, have warned that the increased costs might have to be passed on to customers in the form of higher prices. One of the problems, they say, is that the increase is phased in over such a short time, forcing employers to absorb a 32 per cent wage increase in less than 18 months. Opponents to the reforms are therefore calling for a much slower pace of change. TD Bank, for instance, has cautioned that, while increasing the minimum wage could be good for the province’s economy overall, the rapid speed of implementation could mean the loss of 90,000 jobs. Fittingly, the bank has recommended extending the phase-in period by two years.

The province’s compromise

There’s no time to lose for the province. Premier Kathleen Wynne told the Toronto Star last month that it was unacceptable for people with full-time employment to rely on food banks to feed their families. You could forget the extended phase-in suggestion in other words. To help small businesses, which may not have large enough revenues to cover such a quick pay increase, the government is instead looking at a subsidy program. This would provide a tax break to help offset the boost in the minimum wage.

Either way, companies will have no choice but to comply once the proposal becomes law. Stay tuned!


See also:

What Ontario’s labour reforms mean for you

What is universal basic income and what does it mean for job seekers?

What Canada’s new mortgage lending rules mean for home buyers

Why Canada needs a universal child care program


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