Ontario passes new minimum wage law

Minimum wage will rise in Ontario to $14 an hour on Jan. 1 2018, with the increase to $15 coming in 2019


 
(iStock)

(iStock)

TORONTO – Ontario has passed sweeping labour reform legislation, which includes increasing the minimum wage to $15 an hour.

Currently at $11.60 an hour, the minimum wage will rise under the legislation to $14 an hour on Jan. 1, with the increase to $15 coming in 2019.

The plan has proved largely popular in government polling and with labour advocates, though it is controversial with businesses, who say the increase is too fast and will lead to job losses.

OPINION: Why a $15 minimum wage is good for business

The government and some economists argue that the hike will have some positive impact on the economy, as minimum wage earners get more spending power.

The Liberal government recently announced the provincial corporate tax rate for small businesses will be cut from 4.5 per cent to 3.5 per cent to help support businesses through the minimum wage transition, though Premier Kathleen Wynne said it was never intended to fully offset the impact.

The legislation also mandates equal pay for part-time workers, increases vacation entitlements and expands personal emergency leave.

It will form a key pillar of the Liberals’ re-election platform, with the premier tying it at nearly every opportunity to a theme of fairness, along with free tuition for low- and middle-income students, more child care spaces and pharmacare for youth.

The minimum wage increase is the centrepiece of the legislation and also the plank that has garnered the most attention. While the $15 rate is one labour advocates have been urging for years, and dozens of economists signed a letter in support of it, business groups have been pushing hard against it.

RELATED: Ontario minimum wage hike could cost 50,000 jobs, says watchdog

They say it will be difficult to absorb the increased costs over such a short time frame.

The province’s economic watchdog, the Financial Accountability Office, has estimated more than 50,000 people could lose their jobs due to the minimum wage increase.

A TD Bank report has estimated the minimum wage hike could cost the province’s economy as many as 90,000 jobs by 2020. And an analysis from the Keep Ontario Working Coalition concluded over 185,000 jobs could be impacted.


 
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Ontario passes new minimum wage law

  1. It’s a tide that floats all boats. $14/hour is just enough to raise a single adult minimum wage earner to the poverty level but 23% less than what is required to raise a single parent with one child up to the poverty level. Of course, living below the poverty level is partly mitigated by government social spending i.e. minimum wage jobs are subsidized by social programs. It should be noted that many minimum wage employers limit hours in order to avoid full-time worker status, consequently, income of minimum age workers is not just a matter of hourly rate.