Extending Minimum Wage Implementation Will Slash Job Loss Risk by 74%: Economic Analysis

Final analysis of Bill 148 reveals $12 billion economic problem that the Ontario Government must resolve

Today, the Oakville Chamber of Commerce, in partnership with the Ontario Chamber of Commerce and the Keep Ontario Working (KOW) Coalition released two major reports that broadly capture the challenges associated with Bill 148 and the concerns of the employer community. The first report is the final economic impact analysis of Bill 148 by the Canadian Centre for Economic Analysis’ (CANCEA), which was peer-reviewed by Professor Morley Gunderson of the University of Toronto.

CANCEA’s analysis reveals that if Government were to do nothing other than implement the minimum wage increase over five years instead of in the next 15 months, jobs at risk would decrease by 74 per cent in the first two years. 

The analysis also indicates that while the proposed changes will see $11 billion in wage stimulus flow into the economy in the next two years, a remaining $12 billion problem exists which will lead to jobs lost, added costs, and general damage to the Ontario economy.

“Today’s final report by CANCEA is clear, while the Government is correct to say that there will be a stimulus from Bill 148, it does not cover the $23 billion cost challenge for business in the first two years – a substantial amount that poses great risk to our economy and cannot be resolved through offsets alone,” said Karl Baldauf, Vice President of Policy and Government Relations at the Ontario Chamber of Commerce. “More must be done. The Ontario Government must resolve the economic challenges presented in Bill 148 through a combination of slowing down the implementation period, amending the legislation, and offsets. Business and Government must work together to avoid unintended consequences and protect our most vulnerable.”

The Keep Ontario Working Coalition and CANCEA released interim findings of this Analysis in August, ahead of final amendments being submitted for first reading of the legislation. To date, CANCEA’s work remains the only peer-reviewed economic analysis of Bill 148. In having been reviewed by Morley Gunderson, the work has benefited from one of the leading economists in Canada, who the Ontario Government has turned to on multiple occasions, such as during the Changing Workplaces Review which became the foundation for Bill 148.

“Our risk assessment of the Act is that there is more risk than reward for Ontarians despite the stated goal of the legislation in helping Ontario’s more vulnerable and the Ontario economy,” Paul Smetanin, President of CANCEA. “Given the risk of consolidating income and wealth inequality, putting about 185,000 people out of work, and the risks of small/medium businesses being exposed to their larger competitors, the unintended consequences are significant.”

In addition, the Keep Ontario Working coalition released a second report, The Flip Side of “Fair”, which showcases testimonials from employers and outline how they will be impacted by the legislation. The report gives a voice to those businesses who have felt excluded from the committee process and policy discussion around this legislation. The testimonials all share a common theme, that the minimum wage increase and labour reforms will have serious consequences for their business and their communities.

“This Bill is forcing businesses to automate where possible, reduce labour/staffing, absorb part of the costs, and pass along a price increase to the customers (consumers) where possible. …The very people that you are purporting to help are the ones who are going to be hurt the most. This will be the inexperienced and/or unskilled in Ontario. As these jobs disappear, they will be pushed onto social assistance… and will remain in poverty.” – Guenther Huettlin, President and Owner at GH Manufacturing, Belleville, Ontario

The KOW Coalition will continue to advocate that the government:

  1. Consider the risks outlined in this economic impact analysis while also conducting their own analysis;
  2. Implement broad amendments to Bill 148; and,
  3. Slow down implementation to avoid unintended consequences and protect Ontario’s jobs, communities and our most vulnerable.

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The Keep Ontario Working Coalition (KOW) is a broad-spectrum group of business sector representatives concerned with sound public policy to help produce jobs and grow Ontario. For more information please visit www.keepontarioworking.ca.

Members include:

Association of Canadian Search, Employment and Staffing Services (ACSESS)

Canadian Franchise Association (CFA)

Canadian Federation of Independent Grocers

Food & Consumer Products of Canada (FCPC)

Food and Beverage Ontario (FBO)

National Association of Canada Consulting Businesses (NACCB Canada)

Ontario Restaurant, Hotel and Motel Association (ORHMA)

Ontario Chamber of Commerce (OCC)

Ontario Federation of Agriculture (OFA)

Ontario Forest Industries Association (OFIA)

Ontario Home Builders’ Association (OHBA)

Ontario Real Estate Association (OREA)

Restaurants Canada

Retail Council of Canada (RCC)

Tourism Industry Association of Ontario (TIAO)


Federal Tax Changes Could Impact Your Business: What You Need to Know

  • Do you employ family members? The government wants to scrutinize their compensation to apply a much higher tax rate on income they consider “unreasonable”.
  • Do you invest the profits from your business? The federal government is proposing to tax that income at an effective rate of 70%.
  • Do you want to pass your business on to your children? Tough new rules make it difficult for younger kids to get the capital gains exemption. They could be double taxed.

​Finance Canada is proposing the most radical tax overhaul in 50 years.  These proposed changes will have an impact on all incorporated businesses in all sectors of the economy from retailers to restaurateurs to farmers and consultants.  We are concerned that these changes will stall business growth in Canada and punish legitimate businesses.

We are asking for your help. Send an email to your Member of Parliament using these steps:

  1. Highlight and copy the sample letter below.
  2. Send a letter to MP Pam Damoff or Send a letter to John Oliver 
  3. Copy Faye Lyons, Vice President of Government Relations and Advocacy faye@oakvillechamber.com 
  4. Paste the letter below into the body of the email.
  5. Be sure to personalize the letter (everything in italics).
  6. Click “Send”

We urge the government to put these changes on hold to avoid hurting thousands of small businesses across the country and to have a broader, more thoughtful discussion regarding the measures needed to stop those who use their businesses to avoid paying taxes.

Sample Letter to MP

Subject Line: Tax Changes will Hurt Small Businesses

Dear MP Name

Over the summer, the federal Finance Department has made it clear that it intends to make the most sweeping changes to business taxes in 50 years.

From my perspective, as a business owner, I want you to know how this is going to affect my business.

(Please share your business story.)

So that you have a snapshot of my business, here’s some information:

The number of people I employ:

The type of business:

I started this business in…

My customer base is… e.g. mostly local

My supplier base is… e.g. mostly local/Canadian/etc.

Nobody supports tax evasion or loopholes. But these changes will punish legitimate businesses like mine.

I am particularly upset because this government has said it is committed to providing new opportunities for SMEs to grow. My business and many others like mine are the backbone of many communities – my community included. Our businesses employ citizens; our businesses support local initiatives – everything from soccer teams to fundraising drives for refugee families. If these changes go through, our local businesses, including mine, will no longer have the capacity for these community activities. I understand that draft legislation is in place concerning these changes.

I urge the government to put these changes on hold to avoid hurting thousands of small businesses across the country and to have a broader, thoughtful discussion regarding the measures needed to stop those who use their businesses to avoid paying taxes.

Yours truly,

Name


Ken Nevar Appointed as Oakville Chamber Chair

Ken Nevar Chair of the BoardThe Board of Directors of the Oakville Chamber of Commerce is pleased to announce that Ken Nevar has officially begun his term as Chair of the Board. 

Ken was sworn in by Mayor Rob Burton at the Oakville Chamber’s Annual General Meeting on Thursday, September 7th.  

Ken has served as a member of the Chamber Board of Directors since 2010 and has served on the Oakville Chamber’s Executive Committee as Vice-Chair of the Chamber Board since 2013.

Ken Nevar is the President of Cooper Construction Limited. Founded in Hamilton, Ontario in 1905, Cooper Construction has a long history as a family-owned general contractor constructing institutional and commercial buildings in both the public and private sectors.

Ken joined Cooper Construction in 1979 and has played a pivotal role in transforming the company into one of the leading design builders and industrial land developers in the GTA. Ken leads all strategic initiatives of the company and is responsible for development activities, including land acquisition, site servicing, design/build construction, marketing and tenant selection activities.

“Ken brings a wealth of business experience and knowledge to his new role that will contribute to the ongoing success of the Oakville Chamber” stated Immediate Past Chair Caroline Hughes. “Ken has provided his expertise to the Board as a Director for seven years and has chaired the Oakville Chamber’s Government Relations and Advocacy Committee for two years. I look forward to working closely with Ken and his leadership throughout the coming year.”  

Caroline Hughes has completed her term as Chair of the Board, and Oakville Chamber President John Sawyer congratulated her on an
outstanding job. “Caroline’s background and experience helped frame our research, comments and recommendations throughout her term as
Chair. A significant achievement during her term was the Oakville Chamber membership reaching a milestone of over 1,200 organizations! We
are very proud of this achievement and look forward to continue the momentum in the coming year.” Caroline Hughes Past Chair of the board

Caroline Hughes will be recognized for her contribution to the Chamber at the Annual Chairs Dinner where Ken Nevar, along with the incoming Board of Directors, will be introduced to the community. This formal evening includes a networking reception, dinner and silent auction. The Oakville Chamber is pleased to be hosting David Dodge, The Former Governor of the Bank of Canada and Senior Advisor at Bennett Jones, as the keynote speaker.

“We are excited to host David Dodge. The economy and interest rates are the top issues on the minds of our members and Canadians at large. It will be very interesting to hear Mr. Dodge’s perspective on the Bank of Canada’s increasing interest rates and its effect on our economy” stated Chamber President John Sawyer.

The 63rd Annual Chair’s Dinner takes place:

Date:    Wednesday, September 20

Time:   5pm Networking Reception; 6pm Dinner Gala

Location: Oakville Conference & Banquet Centre, 2515 Wyecroft Road, Oakville

You can register for the 63rd Annual Chairs Dinner online, by emailing info@oakvillechamber.com, or by calling the Chamber at 905-845-6613. Tickets are $125 for Chamber members and $175 for non-members. Tables of eight are available.