Brampton Board of Trade has sent a submission to the Standing Committee on Finance and Economic Affairs regarding Bill 148, Fair Workplaces, Better Jobs Act. Local businesses have expressed the challenges they will face in implementing some of the new legislation, more specifically, the $15 minimum wage increase, which will have adverse effects. The Board of Trade is requesting that the standing committee consider halting the legislation until more wholesome research and consultation can be completed as well as consider some mitigating actions that can be taken to lighten the regulatory burden for businesses. See the full letter below.
Dear Mr. Rennie,
The Brampton Board of Trade, representing over 670 member companies that employ over 42,000 employees in the City of Brampton, is gravely concerned about the changes being proposed under Bill 148, Fair Workplaces, Better Jobs Act, 2017.
Although the spirit of Bill 148 is laudable, and we recognize the importance of fair wages and working conditions, the Ontario Government has not considered all of the immediate and significant negative impact the changes will have on businesses in our region.
Brampton businesses have posed many questions and concerns regarding Bill 148:
1. How do these changes improve Ontario’s competitiveness? Our members tell us it will put Ontario businesses at a competitive disadvantage with those in competing jurisdictions. Specifically, they warn of investment decisions being re-directed to those competing jurisdictions.
2. How do these changes address the talent gap? Our members believe much greater societal impact can be made by working with business to address the talent gaps in our industry sectors where jobs paying much, much more than minimum wage are seeking qualified workers.
3. How do these changes help young people access jobs? Young professionals and employers tell us addressing the high cost of housing, childcare and the insufficient transit throughout the region will do more to enable young families than increasing the minimum wage.
4. How do these changes support innovation? The changes proposed will do little to support and enable the innovation economy of start-ups and scale-ups that require maximum flexibility in compensation models, work schedules and leave arrangements.
5. How do these changes encourage investment and job creation by small business? Our small and medium enterprises (SMEs) will face an undue burden of cost at a time when we are working closely with SMEs to foster their trade and competitiveness.
Major concerns have been raised across all sectors. I have summarized some direct feedback from Brampton businesses that articulate the magnitude of unintended consequences Bill 148 will bring to youth, job-seekers, employers and consumers if implemented:
“My plan is to increase fees by 14-18% in the next 6 months. I will definitely cut back on employee positions and employee benefits to offset costs”, says one Brampton business owner.
- o Higher consumer costs: The impending changes will result in an increase to consumer prices to offset costs of paying staff more. How will consumers respond to large increases in labour-intensive purchases such as childcare, elder care and groceries?
- o Less opportunity for lower-skilled workers: To mitigate increases to consumers, businesses will be forced to change their hiring practices accordingly — be more selective of who they hire – higher-skilled to justify a higher wage - which may exacerbate youth unemployment.
- o Fewer jobs: Bearing in mind the parameters of their allotted budgets, businesses have stated clearly that they will have less room to create jobs
In the words of another Brampton small business owner: “As a small business owner with high staff: revenue ratio, I am concerned about the increase to minimum wage and related changes….the speed of the proposed implementation will be very difficult to bear. I believe a 5-year tiered-increase would achieve the same effect and be much less disruptive to Ontario businesses. Although an election is imminent I would really like to see decisions made by the Ontario government transcend the political horizon; this is a transparent vote-grab without thought for long-term consequences.”