Ontario is giving the lowest-wage earners relief by raising the minimum wage to $11 an hour, but the decision is being met with a mixed reaction from such sources as student groups and restaurant associations, concerned that the change is either too little or too much.
The wage increase will come into effect on June 1. Ontario’s labour minister, Yasir Naqvi, said this year’s increase will account for the inflation since 2010, when the previous Liberal government froze the minimum wage at $10.25.
In addition, the government is also planning to introduce legislation that would tie future minimum wage increases to levels of inflation. Increases would then be announced on Apr. 1 and come into effect by Oct. 1.
“The government wanted to set a fair wage,” said Naqvi. “The decision is based on the principles of fairness and clarity.”
The wage increase comes on the heels on a recommendation by the Ontario government’s Minimum Wage Advisory Panel, which advised that minimum wage increases should be linked to inflation.
Naqvi said that the government wants to follow the advice of the panel and ensure that those working on minimum wage will be able to have stability in knowing what their wage will be set at, rather than creating uncertainty by raising it on an “ad-hoc” or improvised basis.
He also pointed out that the student minimum wage, which applies to students under the age of 18, and the liquor servers’ minimum wage that apply to those who work at bars, are calculated separately, and will also go up.
However, the government’s announcement has been met with a mixed reaction from business, labour, and student groups.
Business associations such as the Canadian Restaurant and Foodservices Association, which represents many minimum-wage earners in the fast food industry, warned the increase will lead to higher costs, resulting in fewer jobs for young adults.
“This increase will hit at the same time students are looking for summer jobs,” said CFRA vice-president James Rilett. “This will cause the youth employment problem to worsen and many young people won’t get the important job experience that will serve them in their future careers.”
Unifor, the nation’s largest union, said that the increase offers no respite for the lowest-wage earners.
“A minimum wage of $11 an hour is still a poverty-level income,” said Unifor national president Jerry Dias in a news release. “Tying it to inflation only ensures it stays below the poverty line.”
Alastair Woods, chair of the Ontario branch of the Canadian Federation of Students, noted that many students work on part-time minimum wage jobs. Rent, school, groceries and transportation are all things that students need to pay for, and Woods said while the wage increase takes a little bit of pressure off students, it doesn’t go far enough.
“The minimum wage increase is an important victory,” said Woods. “However it still falls below the poverty line for those working full time on minimum wage, which is why we are still calling on the province to commit to $14 an hour minimum wage.”
Naqvi pointed out that an increase to $14 per hour would hurt businesses too much, and that tying the minimum wage to inflation offers fairness for all involved.