Ottawa businesses fear wage hike could force layoffs

Owners of small businesses in the Ottawa area say they fear raising minimum wage so quickly could force them to raise prices and lay off workers.

Ontario will raise minimum wage to $15 an hour in 2019

Paul Murphy, president of Calabogie Peaks ski hill, said he may have to lay off some of his staff in order to pay the new minimum wage. (Roger Dubois/CBC)

Owners of small businesses in the Ottawa area say they fear raising minimum wage so quickly could force them to raise prices and lay off workers. 

Kathleen Wynne's plan to raise Ontario's minimum wage to $15 an hour by 2019 was the topic of a public hearing in Ottawa Wednesday morning, where many local businesses spoke about the impacts of a sharp jump.

While current minimum wage earners, who now make $11.40 an hour, are anxiously awaiting the extra money Bill 148 would bring, some Ottawa businesses say they worry about the consequences.

Paul Murphy, president of Calabogie Peaks Resort, said he won't be able to afford to pay his current employees. 

"Our biggest concern at Calabogie Peaks is that this legislation has come on way too fast and the magnitude of the increase is too steep for us to deal with," said Murphy.

Murphy said the ski resort will have to boost their prices, which he worries could drive people to Quebec ski attractions instead.  If wages go up, he said he's looking at laying off 15 per cent of his workforce. 

"We don't have the cash at this stage to pay the increased wages," Murphy added. "I don't have a secret pocket to dip my hand into and say 'Here's more money'. And it's put me as a business owner in a terrible predicament."

Brigida Aversa, owner of Tiny Hoppers daycares, is worried raising minimum wage will lower the morale of her other employees who make just over $15 an hour.

"I have no problem paying my employees fairly. My problem is explaining to my employees who have gone to school … Why they're making little more than minimum wage," said Aversa.

"Are we going to continue getting good, qualified staff if we're paying them the same as somebody who has no education?"

Neither Murphy or Aversa think the new wages will mean a death sentence for their businesses, but both expressed how much things will change for them overnight. 

While businesses are feeling the squeeze, John Fraser, the MPP for Ottawa South, said it's important to remember how badly workers need the increase. 

"I think we can all agree that's it's simply only fair that people earn a decent living wage so they can do those things for their families that many of us take for granted," he said.

Brigida Aversa, owner of Tiny Hoppers daycares, said she is worried about how the wage increase will affect the morale of her senior staff. (Roger Dubois/CBC)

Minimum wage over the years

The proposed wage jump from $11.60 in October 2017 to $14 in January 2018 will be the biggest single raise the province has ever seen. It would raise a single yearly minimum wage salary from $23,712 to $31,200.

But what has minimum wage in Ontario looked like for the last 45 years?

Wages have mostly followed the rate of inflation, but there have been years of stagnation. 

In 1971, minimum wage was $1.65 an hour. When you adjust the amount to 2017 inflation, it becomes $10.39 an hour — more than minimum wage in 2008.

The basic cost of living has inflated so dramatically that minimum wage earners are having a hard time keeping up.

Canadians are spending more than half of their income on shelter, transportation and food, according to Statistics Canada

"Millions of workers in Ontario are finding it almost impossible to support their families on a minimum wage that just doesn't go far enough," said Premier Kathleen Wynne in a release.

Ontario would be the second province to implement a $15 minimum wage, after Alberta. About 1.5 million Ontario workers currently earn less than $15 an hour. 

With files from Chris Goldrick