The Current

Ontario's new $15 minimum wage bad for business, say critics

Ontario Premier Kathleen Wynne announced that her government would see to a $15 minimum wage by 2019.
Ontario announced it will be introducing a $15 minimum wage by 2019, which would benefit millions of workers in the province. ( Justin Sullivan/Getty Images)

Read Story Transcript
Ontario has become the second province in Canada after Alberta to announce it would hike the minimum wage to $15 an hour.

In 2019, workers will see the increase on their paycheques as part of a broader set of labour reforms introduced by Premier Kathleen Wynne's Liberal government.

But not everyone supports the change — especially small business owners who will now have to drastically reform their business models to adapt.

Toronto restaurant owner Steven Mastoras is one of them. While he appreciates the direction the government is taking, he says his restaurant's labour costs will take a direct hit, with an increase of 32 per cent over an 18-month period.

Business owners are really going to get hurt with this.- Steven Mastoras, restaurant owner

"It's just not a reasonable timeframe for small businesses in the province of Ontario," Mastoras tells The Current's Anna Maria Tremonti.

Mastoras says there is concern across the province and the country about the industry's ability to hire young people. 

"You know, that first time job is something that's very important to young people in the economy. Restaurants are the number one first-time employer and we're very concerned about youth unemployment," he explains.

Sheila Block, an economist with the Canadian Centre for Policy Alternatives, a think tank policy research institute, says she understands the responsibilities business owners like Mastoras will have to meet within the next two years.

These are people who are trying to support themselves, trying to support their families on these minimum wages.- Sheila Block, economist

But when it comes to policy changes, she warns people need to "move away from anecdote and move into the evidence."

According to Block, there is a "mythology" around minimum wage workers that they are "all teenagers who are working to buy themselves a new smartphone."

However, Block says 60 per cent of them are over the age of 20.

"These are people who are trying to support themselves, trying to support their families on these minimum wages," she says.

Proponents of the wage increase assert it will have a positive cascading effect as minimum wage earners spend more money on the economy, but Mastoras says they are "in the minority" in terms of understanding the dire impact it will have on business owners.
Ontario Premier Kathleen Wynne's newly proposed labour legislation also includes fairer rules for part-time workers. (Dave Chidley/Canadian Press )

He says several years ago, the government initially made a promise to small businesses to enforce an annual minimum wage tied to inflation.

"But in reality, their commitment to depoliticize the minimum wage issue effectively was reversed with this announcement and was a misleading direction of the government," he says. 

"Business owners are really going to get hurt with this."

Block believes the newly proposed labour legislation will send a signal to the large businesses who rely on low-wage workers to innovate their business models to maintain their profitability.

"It's a big move and it's a move from government that is saying 'We are going to place front and centre the needs of poor people and we are going to reduce working poverty,'" she says.

"It's making a demand from employers that says you have to make a contribution to decreasing income inequality and that's something that businesses are going to have to adjust to."

Listen to the full segment at the top of the web post.

This segment was produced by The Current's Idella Sturino and Sujata Berry.