The Keep Ontario Working coalition calls for Ontario Government to give employers more time to adjust to sweeping reforms
Today, the Keep Ontario Working group, a coalition of Ontario’s leading industry and sector associations, sent an open letter to Ontario Premier Kathleen Wynne which urges the Government of Ontario to slow down the implementation of Bill 148. The Fair Workplaces, Better Jobs Act will bring about major changes in less than six months, and Ontario’s employer community is concerned that the pace of change will seriously injure our economic growth. The Keep Ontario Working coalition is calling on the provincial government to give businesses more time to better prepare.
In their letter, the Keep Ontario Working group calls on the government to consider the timing of implementation. As it stands now, Ontario’s minimum wage will increase by 32 per cent in only 18 months.
“To demonstrate true fairness and compassion for workers, we must ensure Ontario has a strong economy to help create jobs and increase economic growth,” said Karl Baldauf, Vice President of Policy and Government Relations at the Ontario Chamber of Commerce and Spokesperson for the Keep Ontario Working Coalition. “To plan effectively and protect jobs, employers need predictability and time to adjust to these changes. There is no way to absorb and adjust to a 32 per cent hit in less than 18 months.”
The Keep Ontario Working coalition has commissioned an independent economic analysis to better understand the economic impact of these changes. The results of the coalition’s economic analysis will be shared this coming August.
Read the open letter to Premier Kathleen Wynne:
Dear Premier Wynne:
On behalf of Ontario’s employer community, the Keep Ontario Working coalition is writing to you today with a call for fairness and restraint as the Ontario legislature’s Standing Committee on Finance and Economic Affairs begins province-wide consultations. As we have said since the introduction of Bill 148, the impacts from this legislation will create tremendous uncertainty for Ontario businesses. Realistic legislative timelines can only be proposed following a full economic impact analysis.
Economic Impact Analysis
Ontario’s small and medium sized businesses are the lifeblood of communities, creating local jobs and increasing economic growth around the province. In recent months we have received emotional stories from employers who believe that the impacts from Bill 148 will be profoundly negative and cause significant job loss and financial burden. Many of these businesses have expressed concern that the planned implementation of such drastic labour reforms does not give them the appropriate time to adjust.
Due to the Government of Ontario’s unwillingness to appropriately test the economic impacts of your legislation, the Keep Ontario Working coalition has commissioned our own thorough and comprehensive assessment to fully evaluate the damage these changes will generate. This independent analysis will be completed in August and we will share it with you and all of Ontario’s workers and employers at that time.
Pace of Change
Many Ontario employers, especially small businesses, are now considering closing their business because they do not have the capacity to successfully manage such reforms. In the case of the minimum wage, for example, the business community was wholly aligned with your government’s previous approach, which allowed for increases to the minimum wage that were predictable and protected against arbitrary political decision-making. We object to this new approach, which will provide an arbitrary increase. If your government is intent on this public policy change, we ask that you proceed in a way that allows businesses to better prepare.
Since 2010, the minimum wage in Ontario has increased by 12 per cent. Under your proposed changes, employers would be required to increase the minimum wage by a further 23 per cent in six months, followed by another 11 per cent a year later. This represents a total increase of 32 per cent over just 18 months.
When looking at other jurisdictions who have introduced similar wage increases, the timelines for full implementation are significantly longer than ours. For example, the State of California is taking five years to increase their minimum wage by 50 per cent to $15/hour with employers of less than 25 employees. Seattle has allowed for a 4-year implementation for a 36 per cent wage increase. However, even there, recent evidence by the National Bureau of Economic Research has suggested that the costs of the Seattle minimum wage increases outweigh the benefits by 3:1. In that instance, low-wage workers are losing $125 per month due to less hours of work scheduled.
We know that over the planning period, especially with an increase to minimum wage, the cost of goods will rise, as will utility and occupancy costs (such as leases and ownership), as well as municipal taxes.
To plan effectively and protect jobs, employers need predictability and time to adjust the cost of other inputs where we can. There is no way to absorb and adjust to a 32 per cent hit in less than 18 months, the bulk of which is an even more unmanageable 23 per cent increase a mere seven months out.
Our concern surrounding the pace of change is not isolated to the minimum wage in Ontario, but encompasses all aspects of the legislation. We know that changes to other areas – such as equal pay for temporary and part time workers and scheduling – will carry significant new costs for employers, costs that must be contended with in order to avoid maximum job losses.
We urge you to slow the pace of the Fair Workplaces and Better Jobs Act. We are extremely concerned that the proposed legislation will have negative impacts on the growth of our province’s economy, our people, and our communities. This does not demonstrate fairness.
To demonstrate true fairness and compassion for workers, we must ensure Ontario has a strong economy to help create jobs and increase economic growth. Ontario’s workers and employers deserve to truly understand the impact of your decisions. That is why we urge you not to rush these reforms, and to consider the economic impacts that will be revealed as a result of our comprehensive economic impact analysis in August.
We are committed to working collectively with your government to ensure that workers in this province can continue to prosper. For that to occur, we must continue to work together and ensure we are doing all we can to protect against job losses, increased costs to consumer goods, and economic hardship.
The Keep Ontario Working coalition:
Association of Canadian Search, Employment and Staffing Services (ACSESS)
Canadian Franchise Association (CFA)
Food & Consumer Products of Canada (FCPC)
Food and Beverage Ontario (FBO)
National Association of Canada Consulting Businesses (NACCB Canada)
Ontario Restaurant, Hotel and Motel Association (ORHMA)
Ontario Chamber of Commerce (OCC)
Ontario Federation of Agriculture (OFA)
Ontario Forest Industries Association (OFIA)
Ontario Real Estate Association (OREA)
Retail Council of Canada (RCC)
Tourism Industry Association of Ontario (TIAO)
The Keep Ontario Working Coalition (KOW) is a broad-spectrum group of business sector representatives concerned with sound public policy to help produce jobs and grow Ontario. For more information on the Keep Ontario Working coalition please visit www.keepontarioworking.ca.
Changes Will Hurt Job Creation, Consumer Costs and Economic GrowthThe Keep Ontario Working coalition, in partnership with the Ontario Chamber of Commerce and Ontario Chamber Network, expressed concern that the Government of Ontario’s Fair Workplaces and Better Jobs Plan, commits to unproven sweeping reforms without ensuring protection against unintended consequences, including job losses, rising consumer costs and economic hardship.
The Keep Ontario Working Coalition (KOW) is a broad-spectrum group of business sector representatives concerned with sound public policy to help produce jobs and grow Ontario. As noted in the Business Prosperity Index of the Ontario Chamber of Commerce’s 2017 Ontario Economic Report, despite projections that Ontario will lead Canada in economic growth in the coming years, diminished profitability, lower labour market participation, and sluggish market activity; along with other key factors have resulted in a risk-averse atmosphere that businesses are disinclined to grow production. Businesses are questioning if they should grow in Ontario or expand offshore. Despite that, Ontario’s private sector is still doing its part to support workers. As the Government pointed out in Budget 2017, 98 per cent of all new jobs since the recession in Ontario have been full time, and 78 per cent in above-average wage industries. This positive economic activity by Ontario’s private sector demonstrates a clear commitment to good jobs throughout our province.
OCC AND KEEP ONTARIO WORKING STATEMENTThe following is a statement by the Keep Ontario Working Coalition on the Government’s proposed workplace reforms:
We share in the Government’s desire for broadly inclusive growth. However, in order to achieve this, we need to ensure that we are not risking job losses, rising consumer costs, and economic hardship as a result of over-regulation. “Government cannot regulate prosperity. To demonstrate true fairness and compassion for workers, we must ensure Ontario has a strong economy to help create jobs and increase economic growth. “That is why we are urging the government to take time this summer to have an independent third party conduct a comprehensive economic impact analysis on the proposed reforms to consider the unintended consequences to employers. In addition, as the province’s biggest employer, the government must fully understand what these changes will cost in relation to the provincial treasury as well as social services and other government agencies. “Why is evidence-based policy important? Only three years ago, the Premier’s own Minimum Wage Advisory Panel conducted extensive research and concluded: ‘In the Canadian context, researchers have generally found an adverse employment effect of raising minimum wages especially for young workers…typically those studies find that teen employment would drop by 3 to 6 per cent if the minimum wage is raised by 10 per cent.’ “While the Changing Workplaces Review cautioned that any regulatory change shouldn’t impair the competitiveness of businesses in the province, the reforms outlined in Fair Workplaces and Better Jobs Plan thus far do not provide the balance needed to help ensure a competitive environment for Ontario. “But we have time. Now we must work cooperatively with government to identify the scale of the economic impact of these changes and help employers transition into any new policy regime. We will continue to be cooperative partners with government to find solutions that will, where possible, inhibit negative impacts on the growth of Ontario’s economy, our people, and our communities.”
Changes would discourage investment, eliminate jobs and diminish economic opportunities in Ontario, especially among small business ownersThe Oakville Chamber of Commerce, in partnership with the Ontario Chamber of Commerce, has sent a letter to Premier Kathleen Wynne warning against potential changes to Ontario’s Labour Relations Act (LRA) and the Employment Standards Act (ESA), including the introduction of a $15 minimum wage. The letter is cautioning that these reforms may have unintended consequences impacting job creation and competitiveness, as well discouraging investment in the province.
The potential reforms are coming at a time when costs for consumers and the cost of doing business is high and putting Ontario at a competitive disadvantage. Ontario has experienced slower growth in GDP and job creation than in the past, and drastic reforms to labour and employment run the risk of causing serious damage to the future prosperity of the province. “These sweeping changes could seriously impact job creation and the health of our local economy in Oakville” said Faye Lyons, Vice President of Government Relations and Advocacy at the Oakville Chamber of Commerce. “We need to get the message out that the proposed changes would discourage investment in Ontario, thereby discouraging investment and diminishing economic opportunities in Ontario.”
On issues of non-standard and part-time work, Statistics Canada data shows that part-time work has risen 22 percent since 2003, down from the 36 percent increase in the previous 12-year period. Recent studies show that 76 percent of part-timer workers voluntarily choose part-time work to better accommodate schooling or personal life.
“We are urging Premier Wynne to complete an economic impact analysis of the proposed reforms to limit potential consequences that could seriously jeopardize our future growth,” said Richard Koroscil, Interim-President and CEO, Ontario Chamber of Commerce. “We support reform where and when it is needed, but we caution against change for change’s sake.”
The Ontario Chamber’s letter reminds the Premier that Ontario’s employer community is doing its part to create a better jobs and working conditions in the province. Budget 2017 points out that 98% of all new jobs created since the recession have been full time, and 78% have been above- average wage for their respective industries. The letter notes that the goals of economic growth and improved employee rights are not mutually exclusive. The Ontario Chamber believes that what supports the competitiveness of Ontario’s economy can also help enhance quality of work. Increased education and enforcement may assist with compliance to Government regulations and can improve worker environments. Regulatory reform that raises costs for business, only to reduce the ability of business to invest in and grow the labour force is counterproductive.
Read the Ontario Chamber of Commerce’s letter to Premier Wynne.
For more information on how the proposed reforms could affect Ontario’s economy, see the Ontario Chamber’s Rapid Policy Update.