Tag: Minimum Wage

Extending Minimum Wage Implementation Will Slash Job Loss Risk by 74%: Economic Analysis

Final analysis of Bill 148 reveals $12 billion economic problem that the Ontario Government must resolve

Today, the Oakville Chamber of Commerce, in partnership with the Ontario Chamber of Commerce and the Keep Ontario Working (KOW) Coalition released two major reports that broadly capture the challenges associated with Bill 148 and the concerns of the employer community. The first report is the final economic impact analysis of Bill 148 by the Canadian Centre for Economic Analysis’ (CANCEA), which was peer-reviewed by Professor Morley Gunderson of the University of Toronto.

CANCEA’s analysis reveals that if Government were to do nothing other than implement the minimum wage increase over five years instead of in the next 15 months, jobs at risk would decrease by 74 per cent in the first two years. 

The analysis also indicates that while the proposed changes will see $11 billion in wage stimulus flow into the economy in the next two years, a remaining $12 billion problem exists which will lead to jobs lost, added costs, and general damage to the Ontario economy.

“Today’s final report by CANCEA is clear, while the Government is correct to say that there will be a stimulus from Bill 148, it does not cover the $23 billion cost challenge for business in the first two years – a substantial amount that poses great risk to our economy and cannot be resolved through offsets alone,” said Karl Baldauf, Vice President of Policy and Government Relations at the Ontario Chamber of Commerce. “More must be done. The Ontario Government must resolve the economic challenges presented in Bill 148 through a combination of slowing down the implementation period, amending the legislation, and offsets. Business and Government must work together to avoid unintended consequences and protect our most vulnerable.”

The Keep Ontario Working Coalition and CANCEA released interim findings of this Analysis in August, ahead of final amendments being submitted for first reading of the legislation. To date, CANCEA’s work remains the only peer-reviewed economic analysis of Bill 148. In having been reviewed by Morley Gunderson, the work has benefited from one of the leading economists in Canada, who the Ontario Government has turned to on multiple occasions, such as during the Changing Workplaces Review which became the foundation for Bill 148.

“Our risk assessment of the Act is that there is more risk than reward for Ontarians despite the stated goal of the legislation in helping Ontario’s more vulnerable and the Ontario economy,” Paul Smetanin, President of CANCEA. “Given the risk of consolidating income and wealth inequality, putting about 185,000 people out of work, and the risks of small/medium businesses being exposed to their larger competitors, the unintended consequences are significant.”

In addition, the Keep Ontario Working coalition released a second report, The Flip Side of “Fair”, which showcases testimonials from employers and outline how they will be impacted by the legislation. The report gives a voice to those businesses who have felt excluded from the committee process and policy discussion around this legislation. The testimonials all share a common theme, that the minimum wage increase and labour reforms will have serious consequences for their business and their communities.

“This Bill is forcing businesses to automate where possible, reduce labour/staffing, absorb part of the costs, and pass along a price increase to the customers (consumers) where possible. …The very people that you are purporting to help are the ones who are going to be hurt the most. This will be the inexperienced and/or unskilled in Ontario. As these jobs disappear, they will be pushed onto social assistance… and will remain in poverty.” – Guenther Huettlin, President and Owner at GH Manufacturing, Belleville, Ontario

The KOW Coalition will continue to advocate that the government:

  1. Consider the risks outlined in this economic impact analysis while also conducting their own analysis;
  2. Implement broad amendments to Bill 148; and,
  3. Slow down implementation to avoid unintended consequences and protect Ontario’s jobs, communities and our most vulnerable.

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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 please visit www.keepontarioworking.ca.

Members include:

Association of Canadian Search, Employment and Staffing Services (ACSESS)

Canadian Franchise Association (CFA)

Canadian Federation of Independent Grocers

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 Home Builders’ Association (OHBA)

Ontario Real Estate Association (OREA)

Restaurants Canada

Retail Council of Canada (RCC)

Tourism Industry Association of Ontario (TIAO)


185,000 Ontario Jobs at Risk from Bill 148: Independent Economic Impact Analysis

Bill 148 will increase the cost of consumer goods and services by $1,300 per household starting in 2018, according to new analysis by leading economics firm

Today the Keep Ontario Working Coalition (KOW), in partnership with the Ontario Chamber of Commerce and Oakville Chamber of Commerce, released the first and only independent economic impact analysis of Bill 148, the Fair Workplaces Better Jobs Act. Conducted by the Canadian Centre for Economic Analysis (CANCEA), the study revealed that if the legislation is implemented as currently drafted, there will be significant, sudden and sizable uncertainty for Ontario jobs, economy and communities.

The study concludes that these vast, unprecedented reforms will put about 185,000 jobs at risk in the first two years, greatly impacting Ontario’s most vulnerable workers.

“The changes presented in Bill 148 will have dramatic unintended consequences that include putting close to two hundred thousand jobs at risk and seeing everyday consumer goods and services increase by thousands of dollars for each jobs at risk and seeing everyday consumer goods and services increase by thousands of dollars for each and every family in Ontario,” said Karl Baldauf, Vice President of Policy and Government Relations at the Ontario Chamber of Commerce and spokesperson for the Keep Ontario Working Coalition. “We’ve run the numbers and it’s clear that this is too much, too soon. If the Ontario government chooses to proceed with these sweeping reforms too quickly, all of us will be affected, and the most vulnerable in our society chief among them.”

“Since the announcement of Bill 148, we have heard an overwhelming number of concerns raised by Oakville Chamber members over the size, and in particular, the timing of these proposed changes. They expressed their concerns over the unintended consequences of job losses due to rising costs, the inability to remain competitive, increased costs to consumers and the unfortunate reality of shutting down their business” stated John Sawyer, President of the Oakville Chamber of Commerce. “Working with the Keep Ontario Working Coalition, our goal is to address elements of the legislation where we think there is still room for negotiation, while bringing forth the evidence from this economic analysis to show the impact this will have on business and consumers.”

CANCEA was commissioned by the KOW coalition to measure the potential impacts of six key areas of change in Bill 148, including changes to minimum wages, “equal pay” provisions, vacation, scheduling, personal emergency leave (PEL) and unionization.

Data from the economic impact analysis shows:

  • $23 billion hit to business over the next two years alone
  • 185,000 Ontario jobs will be at immediate risk over the next two years
    • 30,000 of the jobs at risk are youth under 25
    • 96,000 employees at risk are expected to be women
  • 50 per cent increase to inflation for this year and the foreseeable future. The cost of everyday consumer goods and services will go up by $1,300 per household on average each and every year
  • The Ontario government would need to borrow $440 million more to cover the increases in new costs from this legislation. If the government were to provide offsets to businesses, as they have indicated, the province’s treasury will take a bigger hit
  • Municipalities will be forced to increase employee wages by $500 million without additional offsetting revenues

“Simple accounting reveals that the Act creates a $23 billion challenge for Ontario businesses over two years. Annualized, this is 21 per cent of what Ontario businesses invest in capital,” Paul Smetanin, President, CANCEA. “Given the significant, sudden and sizable changes it would be remiss to expect that unintended consequences would not follow.”

In the coming weeks and months, the KOW coalition will release additional components to the economic impact analysis.

“Given the scale of impact and pace of change, it will be impossible for the provincial government to make businesses, even small businesses, whole through offsets,” added Baldauf. “With amendments to the first reading of Bill 148 due this Wednesday, the legislation will need to see serious change including an adjusted timeline for implementation.”

Since Bill 149 was introduced in June, the KOW coalition has called on the government to conduct an economic impact analysis to fully understand how the legislation will change Ontario’s economy. With the government unwilling to do so, the report released today represents the first and only independent economic analysis of this legislation.

Read the analysis.

For more details on the economic analysis, click visit keepontarioworking.ca

 



Minimum Wage Increase & Proposed Labour Reform: Advocacy and Policy Update

The Oakville Chamber of Commerce shares the desire for broadly inclusive growth, where everyone has the opportunity to obtain a living wage. 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.

Thank you to all of our members who have shared their comments regarding the proposed new labour reforms including the minimum wage increase to $15.00 in the next 18 months. We have heard you and we will continue to focus our advocacy efforts on your behalf.

In the past few weeks, the Oakville Chamber has met with the Minister of Labour, our local MPP Kevin Flynn, to share our members’ thoughts on the unintended consequences of the proposed changes. Namely, job losses due to rising costs, the inability to remain competitive, the possibility of shutting down local employers and increased costs to consumers. We are working with our local Business Improvement Areas (BIAs) and combining our efforts to communicate our concerns related to the reforms and in particular, the pace at which these changes are scheduled to occur.

To that end, the Oakville Chamber is working with the Keep Ontario Working (KOW) group, a coalition of Ontario’s leading industry and sector associations as well as major employers. KOW brings together divergent voices to strengthen our collective advocacy. Our goal will be to address elements of the legislation where we think there is still room for negotiation, while bringing evidence to the table to support the notion of a broader package of offsets to help the business community transition into these new changes. The KOW website has been updated with new content and calls to action. You can visit it at www.KeepOntarioWorking.ca

We encourage you to submit a letter to our local MPP’s through the Coalition’s website (to submit a letter, click here). Please take the time to share your stories with Minister Kevin Flynn and continue to send us your emails. Your voice matters.


Ontario Deserves Evidence-Based Reform: Statement on Ontario’s Fair Workplaces Plan

Changes Will Hurt Job Creation, Consumer Costs and Economic Growth

The 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 STATEMENT

The 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.”

Oakville Chamber strongly objects to potential labour and employment standards reforms

Changes would discourage investment, eliminate jobs and diminish economic opportunities in Ontario, especially among small business owners

 The 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.