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

What Does Canada's Budget 2008 Mean for Small Business?

Lots of sources have discussed the implications of the Canadian government’s Budget 2008 on small business. According to The Globe and Mail, Finance Minister Jim Flaherty is working “to sell a plan that he said prepares the country for an economic slowdown”. Here’s a short list of what some reliable sources are saying about the budget with respect to business as well as a number of links to their respective websites:

How Does the Budget Affect Small Business?

• Assistance for manufacturers
• Improved employment insurance management
• Improvements to the immigration system, including speeding up the process
• Enhancements to the cross-border business system
• Streamlining vehicle expense claims
• Provision of more claimable tax credits under Canada’s Scientific Research & Experimental Development (SRED) tax incentive program
• Money to farm programs
• Money for the aquaculture industry

Here is The Globe and Mail’s Budget 2008 Report: articles, editorials, videos and more.

Here is the Financial Post’s page on the Budget. They also include a nice highlight of the budget.

Canadian Business Online includes a report written by Kim Shiffman called: Budget 2008: A Small Budget for Small Business

More on "How Will a Strong Canadian Dollar Affect Small Business"?

My Nov.5/07 post was on how a strong Canadian dollar might affect small business. The loonie continues to sit at or near parity with the American greenback. Here's a sampling of some more interesting articles and reports for you to browse:

Rising Canadian Dollar = Grief for Small Business?

From The Globe and Mail online - Click here for “The Buck Stops Here: Renegotiating the Dollar”, an article by Rasha Mourtada from Jan.21/08 that discusses how and why you might consider renegotiating existing business deals.

This article (click here) is a media release from the Ontario Chamber of Commerce. In the article, The Chamber discusses how businesses are resisting “suggesting that governments interfere with market forces”.

This article (click here) appeared in the Financial Post on Dec.31/07; it examines various challenges that small businesses face, including sensitivity to a fluctuating dollar.

This CBC article from Jan.29/08 is headlined “Manufacturers Expect Tough 2008: Report" - click here to see it.

Click here for a Frost & Sullivan research report on the Canadian Automotive Industry which appeared in Businessworld.

If you’re interested in the IT sector, click here for an article from the Nov.5/07 issue of ComputerWorld Canada called “IT Sector Explores Impact of Canadian Dollar’s Rise".

Follow this link for an article entitled “High Dollar is Causing Widening Grief” which appeared in businessexaminer.net, a part of BClocalnews.com.

While many of the articles above are doom and gloom, this article (click here) called “Silver Lining to Expected Slowdown” on financialpost.com, presents some reasons for optimism.