Increase in wages to mobilize votes

What seemingly should have been good news for many drew mixed reactions. When the Liberal government announced that they intend to raise minimum wages in Ontario incrementally, it was a sigh of relief for many. However, analysts were skeptical of likely increase in job losses and increase in inflation. Little was said about how the minimum wage in Ontario compare with other provinces. Presently the minimum wage in Ontario is & 11.60 an hour. Liberals would take it to $ 14 an hour by 2018 and then to $ 15 in January 2019. While those who are set to receive these increased wages seem excited and those who have to pay that include small business are apprehensive and raising concerns that this would lead to job losses. Soon the Progressive Conservatives were out with their view and laid out their plan. Conservatives unveiled a plan that would slowly phase in the increase by 24 cents a year. That would imply that the minimum wage in the province would not be $15 until 2022. It certainly seems to be the next hot issue for the Ontario Elections for 2019. While the Conservatives have come out with something to cheer for but only for the business houses, it however has a clause- if the Conservatives are elected back. Not to be left behind, the Liberals led by Premier Kathleen Wynne tried to get the small businesses on their side. Liberal government announced in its fall economic update last week that it will cut the corporate tax rate for small businesses from 4.5 per cent to 3.5 per cent effective Jan. 1, 2018, the same day the province will increase its minimum wage from $11.60 to $14.

Is all this hustle really for Ontario? These announcements and promises coming just few months before elections are a sign of political parties growing anxious over votes. These assurance and counter assurances are aimed at luring the prospective voters and grabbing the power. The tax cut for the provinces small business is intended to support them but only to offset the impact of increasing minimum wages. However, the announcement has come only after the Conservatives rolled out their plan that favored small businesses. The latest offering by Liberals for the small businesses has come only as a reaction to the same. Had they really cared for the small businesses the reduction in tax would have been announced along with increase in wages. Conservatives too have been found lagging in this. Had they drawn up a plan for the wage earners, they could have announced their plan at the right moment and not as a reaction to plans of Liberals. Announcement by Progressive Conservatives is certainly an after reaction, as the Conservatives in the previous rule had frozen the minimum wage for their entire term.

Various governments across Canada have been trying to get the minimum wages increased in their respective provinces. P.E.I.’s minimum wage will increase 30 cents in April to $11.55 — the highest in Atlantic Canada. In terms of other provinces in Atlantic Canada, the hourly minimum wage in Nova Scotia is $10.85 for experienced workers ($10.35 for inexperienced workers) and $11 in both New Brunswick and Newfoundland and Labrador. Alberta is already paying the highest $13.60. In September, the government in British Columbia raised the minimum wage by 50 cents to $11.35, and over the next few weeks Fair Wages Commission of BC will be looking at next steps — how and when the proposed $15 minimum wage should be implemented. The commission is involved in gathering information from these consultations to put together an advisory report for the provincial government. But the efforts put in Ontario are aimed not at giving a reasonable wage for the efforts being put in by those who are at the lowest plain of the pyramid, but is to drive home a point with the voters. However, both the parties have neglected an important aspect – Who are all lowest paid in Ontario? Are they paid directly by the business houses? A large chunk of those getting the minimum wages happen to be new immigrants and their actual receipt of the wages is far less than that is reported. What about those placement agencies those pay $11 while claiming $1 6 or even more from the employer.

Both Liberals and Conservatives are far from reality and have not realized the ground situation well, and any promise that is not addressing the core issue doesn’t really address the cause. Going by the intensity with which the parties are promising the minimum wages are surely going to be at the centre stage in the run up to forming the next government in Ontario.