Ontario business groups are now asking the provincial government to cut corporate and small business tax rates if the minimum wage is increased as the Liberals propose, CBC News has learned.

The Keep Ontario Working coalition of business groups is shifting gears in their opposition to the province's plans for sharply hiking the minimum wage by appealing for tax cuts to offset the added costs. 

The plan, which has yet to be passed by the Legislature, would see the current minimum wage of $11.40 an hour rise to $14 on Jan. 1, 2018, then to $15 at the start of 2019. 

Ashley Challinor, director of policy for the Ontario Chamber of Commerce, told CBC News on Friday that the business group is seeking tax reductions to compensate for the minimum wage hike because it appears the legislation will not be significantly amended.  

Ashley Challinor

Ashley Challinor is the Ontario Chamber of Commerce director of policy. (Ontario Chamber of Commerce)

"We're currently having pretty productive conversations with the government about offsets ... for businesses, largely small businesses, to help them transition to the new changes," said Challinor in an interview.

"Lowering the corporate income tax, adjusting the small business tax deduction, potentially some changes to the employer health tax, those sorts of things." 

Premier Kathleen Wynne is not ruling out such tax cuts.

"We are going to work with businesses, particularly small businesses, to make sure that we do everything we can to help with the phase in. Exactly what those mechanisms will be, I can't tell you at this point," Wynne said Friday in response to a question from CBC News about cutting business taxes. 

"I'm committed to helping business and I'm committed to making sure that people are treated fairly. Those things should not be in conflict with one another," she said during a news conference in Kanata.

Wynne driverless car

At a news conference in Kanata on Friday, Premier Kathleen Wynne declined to rule out corporate tax cuts to offset a proposed 32 per cent hike in the minimum wage. (Andrew Foote/CBC)

This comes at the conclusion of 10 days of province-wide public hearings into the minimum wage increase and other proposed labour law reforms in the Liberals' Bill 148, the Fair Workplaces, Better Jobs Act. The proposals also include:

  • Increasing the vacation entitlement for workers who stay with a company for five years 
  • 10 personal emergency leave days a year for all workers, with at least two of those days paid 
  • Equal pay for part-time workers doing the same job as a full-time employee
  • Paying three hours of wages to an employee whose shift is cancelled with less than 48 hours notice.

Many of the proposed reforms were first revealed by CBC News in mid-May before they were made public by the Liberal government. Since then, business groups have repeatedly criticized the proposed $15 minimum wage, with opposition coming from industries ranging from restaurants to greenhouses, from Ottawa to Thunder Bay

The idea of cutting business taxes to compensate for a minimum wage hike is getting a mixed response.  

"Depends on who it's for," said Chris Buckley, president of the Ontario Federation of Labour.

"We value jobs in this province," Buckley said. "If the government has ... a tool in their toolbox to help out a business that is going to struggle, then pull that tool out and use it." 

Gary Sands

Gary Sands is senior vice-president of the Canadian Federation of Independent Grocers. (CBC)

Buckley is not so keen on tax breaks for what he calls "very wealthy corporations," such as Magna Corp., which told the committee the proposed changes could be a "tipping point" that makes doing business in Ontario too costly.

"Magna, who has made billions of dollars of profits off the backs of Ontario workers, is worried about a $15 minimum wage," said Buckley. "No sympathy coming from this guy."

"I'm supportive of any offsets," said Gary Sands, senior vice-president of the Canadian Federation of Independent Grocers. "Whether it's tax cuts, or whether it's energy relief or providing transitional assistance to small businesses as they get over this, we're all ears." 

Sands said Ontario's Minister for Small Business Jeff Leal has been receptive to his group's proposals for offsets.

"We have been meeting with small businesses and stakeholders like the Ontario Chamber of Commerce to listen directly to their suggestions and ideas about how we can further grow Ontario's economy and build strong local economies," said Leal in a statement emailed to CBC News on Friday. 

"When the public hearings conclude, we will be undertaking a review of the submissions made for ideas on how we can better support small businesses," said Leal. 

The proposed 32 per cent hike in the minimum wage would not only increase companies' wage costs, it would also result in increases to their contributions to premiums for Employment Insurance, the Canada Pension Plan and Ontario's Employer Health Tax.