Raise for employees, price hike for customers: Toronto business owner implements $14 minimum wage
Owner of True North Climbing says it's important for employees to have a livable wage
Instead of waiting for the Ontario government to implement a $14 minimum wage in 2018, the owner of a Toronto rock climbing gym has decided he's going to give his employees a big raise now, but that raise also means higher prices for his customers.
Starting at the end of this month, every employee at True North Climbing will make at least $14 an hour, a more than $2 an hour raise for some.
The current minimum wage in Ontario is $11.40 an hour, which is scheduled to reach $15 an hour by 2019.
"People need to live, they need to eat ... I think $15 is the more reasonable minimum wage for people to be able to support themselves," said John Gross, the owner of True North Climbing.
The gym is one of the first in the city to implement the new wages, which will eventually come into effect across the province as part of a larger piece of workplace legislation announced by the Ontario government earlier this year.
The planned increase would be phased in over the next 18 months, starting at $14 an hour on Jan. 1, 2018, before reaching $15 the following January.
But for True North Climbing's clientele, there is one catch.
Effective Oct. 1, prices for climbers at the gym will go up by about 4-to-10 per cent, says Gross, to make up for the extra costs.
Reducing the number of employees at the gym wasn't an option, Gross says, because he doesn't want to risk impacting the quality of service.
"It's a very significant increase in my expenses. Wages are more than half of my expenses," he said. "So raising prices is really my only option."
For example, a day pass will go from $20 to $22 and an annual prepaid membership from $694.95 to $734.50.
Gross said it wasn't just wages driving the increase. Recent renovations and continued expenses also played a role in the decision, but the ability to give his employees a living wage was the most important factor.
"I think all businesses should pay their workers a wage that lets them support themselves," he said. "I think people will mostly accept it. I hope they understand the reasons."
The change will have an impact on about 10 minimum wage employees at True North Climbing, though Gross said almost all 40 of his employees will receive a raise.
A sign of things to come
The situation at the gym is one that could be replicated across the province as each increase takes effect.
Increases to prices or reductions to staff are some of the feared repurcussions business owners expressed when the announcement of the proposed legislation to increase minimum wage was made.
This week, Ontario's Financial Accountability Office (FAO) warned that the province's proposed minimum wage increase could wind up resulting in an estimated net loss of 50,000 jobs.
The FAO also said in its report that boosting the minimum wage is not an effective way to alleviate poverty, which is a strategy of the provincial government.
- A previous version of this story indicated that True North Climbing would introduce a $15 an hour minimum wage in October. It will instead match the $14 an hour minimum wage to be introduced by Ontario in 2018.Sep 15, 2017 9:17 AM ET