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Maximize the conversations about the rising minimum wage (2017)

By Mark Wales, Director, Ontario Federation of Agriculture

The Liberal government’s plan to raise the minimum wage to $15 is a reality set to hit Ontario by 2019 as part of Bill 148. The agriculture sector and many small businesses across the province are reeling at the prospect of the minimum wage rising by a staggering 32% in an 18-month period.

The Ontario Federation of Agriculture (OFA) is collaborating with all the agricultural commodity groups in Ontario, and through its membership in the Ontario Agricultural Commodity Council, to work on minimizing the impact on the industry.

Hearings are currently underway on Bill 148 – Fair Workplaces, Better Jobs Act and the interests and concerns of Ontario agriculture are well represented. We are meeting with political leaders and encouraging members to use summer barbeque meetings with local politicians to talk about the impact of this new legislation on the largest contributor to the Ontario economy – agriculture.

Here are the key points that OFA and the Ontario Agricultural Commodity Council are asking the provincial government to consider around the minimum wage issue.

The timing to transition to $15 per hour is far too tight. Farmers have been given just six months to prepare for the first increase of 21% by January 1, 2018. Labour costs can account for more than 50% of the cost of production for some Ontario farm operations, especially in the greenhouse, fruit and vegetable and mushroom industries.

Agriculture is unable to transfer increased costs of production. As a price taking industry, growers will be paying more for labour with no way to pass the costs on to consumers.

Increased labour costs have many farmers looking at reducing their workforce to protect production capacity and maintain their business. With a reduction in domestic food production, Ontario could become reliant on other growing regions and lose ground with food sovereignty and the strong local food industry that the province currently enjoys.

Ironically, by increasing minimum wage and the negative impacts on the competitiveness of Ontario farm businesses, the province is jeopardizing its own challenge put to the industry in 2013 at the Premier’s Agri-Food Summit. Our industry was challenged to double its annual growth rate and create 120,000 jobs by 2020. A meteoric rise in minimum wage throws a major wrench in the province’s own plans to support the continued growth of the agri-food sector – an industry that currently contributes $36.4 billion to the annual GDP and generates 790,000 jobs.

Let’s get out there this summer and make our concerns known.

For more information, contact:

Mark Wales
Director
Ontario Federation of Agriculture
519-773-6706

Neil Currie
General Manager
Ontario Federation of Agriculture
519-821-8883



Comments

William Fowler says on July 26, 2017 at 10:37 PM

I do not disagree that the minimum wage should be increased. Most of those who work at minimum wage jobs do not have organized labour to back wage demands to keep up with increased costs of living and need to be protected from being exploited with unfairly low wages. That being said, however, I think the Liberal government is literally trying to buy votes from the minimum wage group of citizens while ignoring the negative effect a sudden large wage increase is going to have on small business and agriculture. If the increase goes through as planned I would not be surprised to see significant and rapid price increases for everything from clothing to fast foods to a pound of beans. These price increases will negate much of the purchase advantage of the minimum wage increase. In my opinion a more practicable approach to increasing the minimum wage would be to use the cost of living index to calculate an annual increase of minimum wage. This method is already in use by the government and private industry to calculate pension increases for retirees and would prevent large and unsustainable labour cost increases for employers that pay minimum wage. This would have two advantages over the current Liberal plan. First, it would give those employees on minimum wage a more timely increase to deal with increased living costs rather than the current method of playing catch-up. And second it would give those employers who pay minimum wage a "heads up" for the following year by knowing what the approximate wage increase would be and would allow sufficient time to put together a plan to handle the increased labour cost.


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