Nearest broker: Searching for a broker nearby…
Nearest broker: Sudbury Phone: (705) 523-2030 Penetanguishene Phone: (705) 549-7437 Ottawa Phone: (613) 733-3312 Parry Sound Phone: (705) 746-2441 Orillia Phone: (705) 325-4234 Kemptville Phone: (613) 258-5991 Eganville Phone: (800) 884-1045 Petawawa Phone: (613) 687-4805 Belleville Phone: (800) 361-0941 Winchester Phone: (800) 487-3706 Wellington Phone: (613) 399-3620 Trenton Phone: (877) 455-0299 Prescott Phone: (877) 504-3569 Picton Phone: (888) 475-2776 Peterborough Phone: (800) 958 2270 Perth Phone: (877) 248-1222 Pembroke Phone: (877) 399-3299 Oshawa Phone: (800) 887-7309 North Bay Phone: (705) 475-0001 Napanee Phone: (613) 354-2152 Morrisburg Phone: (800) 806-0746 Midland Phone: (888) 737-6465 Madoc Phone: (613) 473-5266 Kingston Phone: (800) 590-5422 Gananoque Phone: (800) 932-2131 Embrun Phone: (866) 853-4740 Crysler Phone: (888) 292-7098 Courtice Phone: (888) 761-0443 Cornwall Phone: (844) 463-3616 Cobourg Phone: (800) 895-5902 Carleton Place Phone: (888) 237-9517 Brockville Phone: (888) 345-8663 Brighton Phone: (613) 475-1430 Barry’s Bay Phone: (866) 845-2123 Barrie Phone: (705) 726-3350 Bancroft Phone: (800) 994-0036 Arnprior Phone: (800) 668-7337
Get a Quote
Open Menu
toronto ontario skyline

Ontario’s Minimum Wage Increase: Good or Bad?

The proposal of the minimum wage increase in Ontario is one of the more hot topic items in 2017. Ontario’s legislative committee is travelling the province throughout the summer to have public hearings to listen to the supporting and neglecting reasons behind this proposal. Not astoundingly, the majority of outcry has been that of the terror that this legislation would cause to small businesses and the negative effect it would have on the economy.

Here is the breakdown of the minimum wage increase from now until 2019:

Minimum Wage Categories Current to Sept. 30, 2017 Oct. 1, 2017 to Dec. 31, 2017 Jan. 1, 2018 to Dec 31, 2018 Jan 1 2019 to Sept. 30, 2019
General Minimum Wage $11.40 per hour $11.60 $14.00 $15.00
Students under 18 (who work less than 28 hours/week while in school $10.70 per hour $10.90 $13.15 $14.10
Liquor Servers $9.90 per hour $10.10 $12.20 $13.05
Hunting and Fishing Guides $56.95: Rate for working less than 5 consecutive hours in a day $58.00 $70.00 $75.00
$113.95: Rate for working 5 or more hours in a day whether or not the hours are consecutive $116.00 $140.00 $150.00
Homeworkers (employees doing paid work in their own home for an employer) $12.55 per hour $12.80 $15.40 $16.50

The general minimum wage is currently $11.40/hour and is set to increase to $15.00/hour by 2019, which is a 31.5% increase in minimum wage. Wages typically increase at approximately the rate of inflation, which is expected because the purchasing value of money decreases and people need more to purchase the same goods. However, never has their been a minimum wage increase over a 2 year period of 31.5%. Since the increase is so drastic and arbitrary compared to historical wage increases it remains unseen the effects it will have if passed.

Although Canada has never seen an increase in minimum wage of this nature, Seattle, Washington had a similar increase from $11/hour to $13/hour in 2016. Many small businesses responded to the increase by cutting low-wage workers hours and letting go of employees. The legislation had the opposite effect of what was intended because the reduced hours resulted in workers yearly earnings going down and not up.

Who will this affect?

It is uncertain who this will directly affect as the change has not happened yet. However, many economists have provided insights into the possible repercussions. This wage increase will definitely affect small business owners such as restaurant owners that have many minimum wage and student workers. For most small employers the calculated increase in payroll is the difference between profit and loss. This is going to have a negative effect in either of two ways; either the price for product at the business will need to go up to counteract the large payroll, or the low-wage employees will need hour reductions or possibly be let go. More than likely the move to $15 will result in higher prices everywhere so is anyone really further ahead? I don’t think so.

Regardless of whether the changes are going to be good or bad for the economy, it seems that Ontario’s legislative committee is going to pass the proposed legislation. Ontario’s legislative committee is currently touring Ontario stopping in Thunder Bay, North Bay, Ottawa, Kingston, Windsor, London, Kitchener, Niagara Falls, Hamilton and Toronto. If you want your voice to be hear go to the community hearings and let the committee know how you feel about the proposed increase. Because we know how many of our small business clients feel and it is not good to see.

Employment Insurance

The other question that arises is how will employment insurance respond to the proposed change. The increasing of minimum wage has some suggesting that the amount contributed to employment insurance will have to increase. Otherwise, for the reasons mentioned above, less people will be able to retain their positions and this could result in more frequent payouts.

No comments found.
Anonymous User

Leave a Reply

Your email address will not be published. Required fields are marked *

You Might Want to Read

Meet the Dougallers: Rebecca Slaughter
Meet the Dougallers is back with Rebecca Slaughter who is part of our new office in Petawawa! We sat her down to find out a...
Welcome Burr Insurance to the Team!
Burr, is it cold in here? Not anymore, we are heating things up with the addition of Burr Insurance to the McDougall Insurance team! Burr...
McDougall Family Fund 2021!
Our McDougall Family Fund is back! Go to our Facebook Page for full details. What is the McDougall Family Fund Contest? This is our 8th...
Request a Free Quote

It’s simple and won’t take long.

Get a Quote800-361-0941

Person standing, looking down at laptop