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Industry insiders react to minimum wage hike

Last Updated Aug 15, 2017 at 7:55 pm PDT

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Summary

Minimum wage will increase by 50 cents an hour starting September 15th

The rate is currently $10.85 per hour for people working for minimum wage in BC

Once the increase is implemented, BC will have the third-highest minimum wage in Canada

VANCOUVER (NEWS 1130) – Minimum wage in BC will be going up by 50 cents an hour to $11.35 starting September 15th.

Premier John Horgan says this is the first step in his party’s campaign promise to make life more affordable for people living here.

“British Columbia’s lowest-paid workers need a raise,” Premier Horgan said. “The action we’re taking will make life better for working parents, seniors, new Canadians, students and more – these are people struggling to get by.”

Minimum wage across BC is currently set at $10.85 per hour. The increase would give BC the third highest minimum wage across the country.

Labour Minister Harry Bains has announced the 50 cent increase will make this Canada’s third highest minimum wage.

“It will put a little more money into the wallets of almost 94,000 people,” he explains.

Bains admits the latest increase does fall in line with what the former Liberal government also promised to do. “Yes they did, but they never gave it a legal effect. What we’re doing is bringing in an OIC –order in council– to make it legal and give it a legal effect so that we are going ahead with the announcement that they made.”

He understands some small business owners are not happy about this, but adds there’s hope their taxes may be cut next year.

“That is part of our commitment and I’m sure the minister of finance and our premier are looking at that and they will be looking at when they are putting the budget together.”

The new fair wages commission is expected to determine the timeline for bringing the rate up to $15, but Bains is not setting a deadline beyond some time in 2021.

Green Party leader claims four-year timeline is “prejudicial”

BC Green Party Leader Andrew Weaver has issued a statement on the provincial government’s promise to increase the hourly minimum wage.

He says he’s pleased to see “a key element of the BC Greens 2017 election platform” move forward. However, Weaver is highlighting concerns about the possible deadline.

“I am concerned that the apparent addition of a 2021 timeline is prejudicial to the work of the Fair Wages Commission,” he explains in a release. “The Commission falls under the Confidence and Supply Agreement between the BC NDP and BC Green caucuses. The 2021 timeline had not been agreed upon and is, in fact, contradictory to the intention of depoliticizing the Fair Wages Commission.”

He says the commission should be the one to determine the timeline after consulting with stakeholders like small businesses.

“The timeline and wage increases should not be made for political purposes and should not be arbitrarily set in advance.”

Hike announcement gets mixed reaction from local stakeholders

The Surrey Board of Trade is raising some concerns following the provincial government’s announcement. CEO Anita Huberman says she’s not reassured by the promise of a new fair wages commission.

“You know the Surrey Board of Trade doesn’t know what that means exactly at this point. We’re very intrigued by it, we want to participate in it, we want to understand it in terms of its impact to business.”

She adds the Board of Trade is concerned about the minimum wage hike as it relates to any other increased costs to business over the next four years.

Meanwhile, Richard Truscott with the Canadian Federation of Independent Business insists a $15 minimum wage is not affordable.

“It’s going to be very difficult for many small businesses to adapt to those new costs,” he explains. “They are going to have to look at reducing hours of operation, perhaps not doing additional hiring –maybe not investing in new equipment.”

He says the government’s promise of tax breaks may not be enough.

“Let’s not forget, at the end of the day, many of these small businesses operate in very competitive markets on very thin profit margins and any time governments move to introduce new costs –that’s going to be very difficult for many of those businesses to adapt to.”

The head of BC’s top labour group says one of her priorities is to lobby that new commission to speed up the process.

BC Federation of Labour President Irene Lanzinger has spent several years lobbying for rates to go up much faster than they did under 16 years of Liberal rule.

“We will be arguing to the fair wage(s) commission that they should consider a faster timeline. While any increase to the minimum wage is good, we need to deal with the fact that we still will have hundreds of thousands of workers working full time and living below the poverty line.”

Alberta will be the first province to offer $15 per hour next year and Ontario plans to reach that target in 2019.

Wage hike could translate to higher restaurant prices

As BC’s minimum wage increases next month, the liquor servers’ wage is also going up 50 cents, to $10.10 an hour.

While Ian Tostenson with the BC Restaurant and Food Services Association says today’s 50 cent increase is manageable, he adds the price of your favourite meal or liquor will likely go up once the rate jumps almost four dollars.

“When you start to raise wages to that extent, you will start seeing some potentially unintended consequences,” he explains. However, he says customers can be reassured things won’t get out of hand.

“Sometimes, it’s not the whole cost that’s passed on. We don’t want to get ourselves into a situation where the guests of our industry are saying it’s getting too expensive to eat out, so we have to be conscious of that.”

Tostenson also argues four years to implement a $15 minimum wage is a little short. He says he would have liked the new government to wait perhaps five years or more, drawing on experiences in Seattle, which recently had problems after raising the minimum wage too fast.

“The average income of those workers went down by $1,500 per year, so you start to see now businesses reduce hours, use more part-time employees and also in the States what you see now is automation is coming into play. They’re using kiosks to take orders.”