PEI

P.E.I. minimum wage going up 70 cents

The P.E.I. government announced a minimum wage increase on Friday morning that will come in April.

Wage will be $12.25 starting April 1

The new minimum wage comes into effect April 1. (Kevin Yarr/CBC)

The P.E.I. government announced a minimum wage increase on Friday morning that will come in April.

The wage will move to $12.25, up 70 cents, on April 1. This April the wage went up 30 cents to $11.55.

In a news release, the province said that the increase will keep the Island's minimum wage the highest in the region.

"Our government is focused on helping Island families and supporting low-income workers by raising the minimum wage," said Workforce Minister Sonny Gallant.

In past years, business groups on the Island have complained about minimum wage increases coming on short notice. The 2018 announcement came in November 2017, which the Canadian Federation of Independent Business said made the wage increase easier to swallow.

Union wants increases to continue

Craig Walsh, a representative from United Food and Commercial Workers, said the increase is a step in the right direction, for both Islanders and the overall economy.

"I think it's an excellent move, it's great that they're giving the businesses time to prepare for it," Walsh said.

"There's a considerable number of people that are working at minimum wage so this is going to be — if they're lucky enough to have 40 hours a week — another $1,400 roughly in their pocket per year, pre taxes of course," Walsh said. "That's going to be a significant help to them."

'I think it's an excellent move, it's great that they're giving the businesses time to prepare for it,' says Craig Walsh, representative with United Food and Commercial Workers. (Brittany Spencer/CBC)

He added many people who are making minimum wage have a difficult time saving, and that money goes back into the Island's economy.

"That money is just going to roll around the Island economy over and over again," he said.

Walsh said while next year's increase is positive, the union would still like to see the minimum wage rate increase to $15 an hour.

"It's a great start anyway," Walsh said. "Unfortunately though it's still not where it needs to be. I'd love to see a commitment going forward that they're going to keep up these kinds of increases."

Businesses worry about long-term effects

Erin McGrath-Gaudet, director of P.E.I. and intergovernmental policy for the Canadian Federation of Independent Business, said while increasing the minimum wage puts more money in Islanders' pockets, business owners worry about what the impacts might be long-term. 

She says for many businesses, balancing the new cost can mean some have to limit the number of staff and working hours. Some also explore new technologies that can do the job in a more affordable way, she added.

"The impact may be that rather than 40 hours a week you're getting 38 hours a week. It may be harder to find some of those entry-level jobs, that's a common area particularly for youth and for newcomers," McGrath-Gaudet said.

'We're looking at a jump in minimum wage alone that's going to be three times what inflation has been, it's going to be twice what economic growth has been,' says McGrath-Gaudet. (Brittany Spencer/CBC)

"So we'll see certainly some of those impacts as this kind of rolls out next year, in the same way that we have over the last number of years," she added.

McGrath-Gaudet said the minimum wage increase is only one of the added costs businesses can expect to see next year, and are trying to figure out how to absorb the expenses into their budgets.

"They're looking at CPP increases next year, we've had an announcement about the increase in gas taxes," McGrath-Gaudet said.

"So it's not just one thing, it's going to be cumulative of all these different factors and really trying to figure out how they're going to make that work and balance their books at the end of the day," she added.

P.E.I's premier responded to that criticism in a press release on Friday, stating the province will continue to work with Island businesses and build on the initiatives to help them remain competitive.

While the minimum wage is the highest in Atlantic Canada, it remains higher in Alberta, British Columbia and Ontario.

Average wages paid on P.E.I. are the lowest in the country, according to Statistics Canada.

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