Rising Minimum Wage: Hurting Small Business in Canada?

At a time when the Ontario economy is taking a downturn, small business owners are being forced to cope with a rising minimum wage. Six provinces in Canada raised their minimum wage effective either March 31, 2008 or April 1, 2008 with more set to rise later this year. Ontario’s minimum wage will be the highest at $8.75, up from $8.00. By 2010, it will be $10.25 which is an increase of 10% a year since the increases began in 2003. See the table below for rates in all the Canadian provinces and territories. Aimed at fighting poverty, a rising minimum wage is likely to take a hit on small businesses that are already paying more for things like insurance and utilities and who generally have a thin operating profit. Manufacturers, in particular, have voiced concerns about the poorly-timed increase; in February alone, the manufacturing sector lost 24,000 jobs according to the Statistics Canada website (note that manufacturing "represents 11.6% of total employment"). Many economists indicate that the timing will undoubtedly lead to job losses.

Called “Minimum Wage Set to Rise”, The Toronto Star, published an article on March 30, 2008 by Andrew Chung, profiling the economic arguments.

Says Elaine Flis, Ontario Vice President for the Canadian Restaurant andFoodservices Association (CRFA) in a news release, "Numerous economic studies have concluded that targeted tax relief, credential recognition and job training programs are far more effective ways to reach those in need."

To read about the NDP’s viewpoint on the need to raise the minimum wage, check out “Raise the Wage”.

Report Flags Poverty Concerns in Ontario is an article from the Canadian Press that appeared in The Globe and Mail on April 2, 2008 which details the point of view of anti-poverty activists.

Minimum Wage Across Canada

Alberta $8.40 as of Apr.1/08 up from $8.00
Alberta Employment and Immigration

BC $8.00
B.C. Ministry of Labour Citizens’ Services

Manitoba $8.50 as of Apr.1/08 up from $8.00
Manitoba Labour and Immigration

New Brunswick $7.75 as of Mar.31/08 up from $7.25
New Brunswick Dept of Post-Secondary, Training and Labour

Newfoundland and Labrador $8.00 as of Apr.1/08 up from $7.50
Newfoundland and Labrador Labour Relations Agency

Northwest Territories $8.25
Northwest Territories Education, Culture and Employment

Nova Scotia $7.60 as of May 1/07
Nova Scotia Labour and Workforce Development

Nunavut $8.50
Government of Nunavut

Ontario $8.75 as of Mar.31/08 up from $8.00
Ontario Ministry of Labour

PEI $7.50 as of Apr.1/07 going up to $7.75 on May 1/08 and
then $8.00 on Oct.1/08
PEI Communities, Cultural Affairs and Labour

Quebec $8.00 going up to $8.50 on May 1/08
Quebec Commission des normes de travail

Saskatchewan $8.25 going up to $8.60 on May 1/08 and then $9.25
on May 1/09
Saskatchewan Advanced Education, Employment and Labour

Yukon $8.50 as of Apr.1/08 going up annually on April 1st
Yukon Department of Community Services

Human Resources and Social Development Canada also includes a chart indicating current and forthcoming minimum hourly wages for experienced adult workers in Canada