New legislation could cost businesses billions, Ontario Chamber claims

Karl Baldaulf
Photo credit: Chris Must.
Posted on: November 2, 2017

Chris Must

The Fair Workplaces and Better Jobs Act is a well-intentioned piece of legislation that “is riddled with unintended consequences,” the Ontario Chamber of Commerce’s vice president of policy and government relations told a Smiths Falls audience Nov. 1.

Speaking at a public forum hosted by the Smiths Falls and District Chamber of Commerce at the local community centre, Karl Baldauf said, “The intent may be good, but the way this government is proceeding is setting us up for a lot of challenges.”

Currently referred to as Bill 148, the act will make about 170 changes to the province’s Labour Relations and Employment Standards Act. The centrepiece of the legislation, introduced in June and slated for passage before year-end, is a plan to increase the minimum wage in Ontario from $11.60 an hour to $15 an hour within 14 months.

This plan worries the Ontario Chamber of Commerce, said Baldauf, because it is a dramatic increase over a short period of time. The chamber has been unable to find any other jurisdiction in which such a rapid increase has been made. “It’s simply untenable for businesses in this province to be expected to adjust,” said Baldauf.

Although the Ontario chamber was involved in the consultation process leading up to the introduction of the bill, Baldauf said the chamber was unable to convince the provincial government to carry out a full economic impact study of the legislation. As a result, the chamber commissioned its own study, resulting in a 200-page document. The study concluded that the bill would cost Ontario employers an estimated $23 billion over the first two years, said Baldauf, adding that this was a “conservative estimate.”

The chamber is predicting that businesses will contain these costs by letting employees go, cutting hours and forcing people into early retirement, and raising prices, and will also absorb some costs themselves. Although raising the minimum wage is intended to stimulate the economy, Baldauf argued that rising prices and unemployment would have the opposite effect.

The increase in the minimum wage represents only half of the estimated additional cost to business, with the remainder resulting from proposed changes in paid leave granted to employees, new requirements regarding paid vacation, and new restrictions on scheduling. Another change requires part-time or contract employees to be paid the same as full-time employees, unless the employer can prove that pay is based on merit or productivity.

“I get asked all the time, ‘why do you oppose people having a living wage,’” said Baldauf. “And it frustrates me.” He said the chamber feels the new legislation actually threatens vulnerable people in society by increasing the costs of services such as daycare and retirement home care.

“The costs are clear for industry as a whole,” commented Lanark-Frontenac-Lennox & Addington MPP Randy Hillier, who attended the Nov. 1 forum. “What isn’t seen so clearly is that it isn’t shared equally.”

Workforces with lower educational requirements will be impacted more severely, said Hillier, adding that the operators of the ski resort in Calabogie have expressed fears about the potential impact on seasonal businesses.

With tax changes proposed by the federal government at the same time as provincial labour laws are being amended, said Hillier, “Businesses are facing a real double whammy.”

Hillier noted that Thursday, Nov. 2 was the final day for deputations on the second reading of Bill 148 to be heard, with the government hearing from about 30 deputations out of hundreds of requests. Debate will resume Nov. 14, with current plans for the bill to take effect Jan. 1. At that time, the minimum wage is scheduled to increase to $14 an hour. The increase to $15 takes place in the second year.

Speakers at the Nov. 1 forum urged audience members to make their concerns known to their local representatives, as well as to the leaders of all three provincial parties.