Raising the minimum wage could push more consumers across the border: Chamber of Commerce

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NDP calls for greater increase in minimum hourly wage to $ 17 an hour

The local chamber of commerce is concerned that increasing the minimum wage to $ 15 an hour will push prices up so much that local businesses will suffer as residents of Sault Ste. Marie turns to cross-border and online shopping.

On Tuesday, the Ontario Conservative government announced a plan to increase the minimum wage from 65 cents an hour to $ 15 effective January 1.

The timing of the government’s announcement must be questioned, said Rory Ring, CEO of Sault Ste. Marie Chamber of Commerce.

“Some sectors of retail have been able to come through the pandemic in very good shape, but you also have many sectors – and these sectors that seem to be targeted by this increase – still struggling,” Ring said.

The sectors targeted by Ring are the food and service industry, as well as small business owners.

“It just places another big burden on small businesses trying to get by and hang on to their livelihoods,” Ring said. “We are trying to understand the timing of this increase. “

Michael Mantha, MP for Algoma — Manitoulin who is a member of the NDP, said he was not at all surprised by the announcement because the provincial government faces an election this summer.

“I told people to get ready because the rainbows and the unicorns are going to start coming out,” Mantha said. “Here is a perfect example, where you have a Ford government that is in campaign mode and seeks to appease the workers in the province. “

Mantha said the announced increase does not make up for the past three years. The cancellation of a planned minimum wage of $ 15 was one of the top priorities of the Ford government when it was elected in 2018.

The NDP estimates that most minimum wage earners have lost about $ 5,300 to date because the originally planned increase has not been implemented.

“Will the government consider going retroactively on this? No, they are not, ”Mantha said.

Ring said he was disappointed that the Ford government did not appear to consult with the business community before announcing the planned increase.

“This is a major labor reform and it is a change in political direction for the province. There hasn’t been an evidence-based approach that would suggest it wouldn’t have a negative impact, ”Ring said.

“There could be a negative impact here and it could lead to job losses. This will certainly add to the pressures of rising costs to the consumer and it could mean that these companies may have to cut some services. This will impose economic hardship on businesses and the economy in general, ”Ring added.

The effect on small businesses could be greater, Ring said, because employees already earning $ 15 an hour or more could request a raise after the increase is implemented.

“So it’s not just minimum wage employees, it could be pressure at all levels to get wages up. It puts incredible pressure on the entire business community, ”Ring said.

The wage increase will only be one more cost increase for businesses, Ring said, including increases in the price of gasoline, energy and supplies.

All of these rising costs could be passed on to the consumer, he said.

“These things all start to add up and it can get to the point where your consumer says they can’t afford it anymore and can move on to online shopping from offshore companies, they can move on to more shopping. cross-border, ”Ring said. “The most important thing for us as a border community is that the border will reopen on November 8.”

Mantha does not expect to see widespread job losses due to the increase in the minimum wage.

“The job losses do not come from an increase in the minimum wage. It’s pretty clear that we see more jobs being created when you see an increase in the minimum wage, ”Mantha said. “There are benefits for everyone, because the more income family households earn, the more they spend. So there is a fallout to that. “

The NDP is calling for a minimum wage of $ 17 an hour to cover the cost of living in Ontario.

Mantha said any increase will have to be done with broad consultation.

“I think it’s going to be important for us to reach out to those most affected by this, the labor organizations as well as the workers themselves. And let’s not forget the small businesses, ”Mantha said.


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