The Progressive Conservative government is proposing to delay the planned minimum wage hike until next spring over concerns raised by the business community that higher wages are hurting their bottom lines.
Labour Minister Martine Coulombe announced the policy shift in a statement on Tuesday.
The provincial government is required to consult the Minimum Wage Board before it can officially delay the wage increase to April 1 from Sept. 1. The minimum wage was supposed to jump to $10 per hour.
"Our government has heard from small- and medium-sized businesses that they need time to adjust to the recent successive minimum wage hikes," Coulombe said in the statement.
"That is why we are proposing the minimum wage increase planned for Sept. 1 be postponed for six months. This period will also enable us to continue to explore the idea of a two-tiered minimum wage."
'It took courage for government to listen to these concerns, factor in a changing economic environment, and determine a delay was in everyone's interest.'— Erin McGrath-Gaudet, Canadian Federation of Independent Business
The Canadian Federation of Independent Business issued a report in February that the minimum wage hike could cost 7,000 jobs.
The small business lobby group said the policy would cause business owners to curtail staff hours and cut jobs.
The former Liberal government had committed the province to increase the minimum wage to $10 per hour.
New Brunswick's minimum wage stood at $8 per hour in April 2009 and it has increased to $9.50 per hour in 2011.
Finance Minister Blaine Higgs raised the idea of a two-tiered minimum wage in January during a public meeting to discuss his budget that was tabled in March.
Small business lobby groups were quick to applaud the Progressive Conservative government's proposal to delay the minimum wage increase.
Erin McGrath-Gaudet, the acting director of provincial affairs at the Canadian Federation of Independent Business, said many small businesses were growing very concerned about the impact the planned wage increase would have on their financial future.
"It took courage for government to listen to these concerns, factor in a changing economic environment, and determine a delay was in everyone's interest," she said.
She cited the CFIB's earlier report, insisting the wage policy would have cost jobs in the province.
Luc Erjavec, the Atlantic Canada vice-president of the Canadian Restaurant and Foodservices Association, also said the government should be "congratulated" for the policy decision.
He said the restaurant industry has shed 2,100 jobs in the last year, partly because of the high minimum wage.
"Premier Alward and his government must be congratulated for recognizing the difficulty small businesses have faced in dealing with these raises — they deserve credit for making the right decision and giving small businesses a short respite," Erjavec said.
Liberals criticize wage policy
The Opposition Liberals blasted the Tories for reversing a decision they implemented when they were in government.
Liberal MLA Chris Collins said Premier David Alward said during the election campaign that his word was his contract.
"I used to say the premier has broken his contract," Collins said.
"Now I'm just saying they are lying. They lied to New Brunswickers plain and simple."
Collins said the Alward government had previously endorsed the plan. Coulombe said in the legislative assembly on May 6 that the minimum wage would increase on Sept. 1.
The Liberal MLA said the Alward government has listened to the concerns of the business community "opposed to New Brunswickers."
"I'm calling on the premier to overrule his minister and put this minimum wage increase back into place," he said.
Late Wednesday, The Community Action Group on Homelessness put out a news release on its concerns about the delay on the wage increase.
The group said it's concerned that the decision was made without enough consultation and consideration.
"The proposal also contravenes the public will of 2,500 New Brunswickers who participated in the development of the poverty reduction strategy," said the release.
They say opponents of the raise suggest that minimum wage increases result in substantial job losses. The group disagrees.
"Social policy analysts submit that N.B.’s minimum wage policy is only a component of a stronger and more efficient engine for reducing poverty," the release says.
"However, like any engine, all parts must be running together in sync for it to work."
New wage policy studied
Coulombe said in June that she was considering a separate wage for employees who earn tips.
The Labour minister ruled out a policy that would offer lower rates depending on an employee's age.
The restaurant association has been pushing the provincial government for the a two-tiered minimum wage policy.
Two-tiered systems are now being used in Nova Scotia, Quebec, Ontario and Alberta.
"We hope government will use this period to move forward with the implementation of a two-tier wage system that recognizes the high cost of training inexperienced workers and the significant income earned by tipped employees," Erjavec said.
The public and interest groups will have 30 days to offer the provincial government their comments on the proposal.
Coulombe said despite the decision to put off the increase in the minimum wage, it is still committed to following the recommendations of the poverty reduction strategy.
That report called on the provincial government to bump up the minimum wage to the Atlantic average and then index those increases to the inflation rate.