Driver shortages to get 'substantially worse' with minimum wage hike: association

When the provincial minimum wage rises on Jan. 1, 2018 to $14 per hour, that hike, according to the Ontario School Bus Association, will mean driver shortages will get "substantially worse."

For parents across Ontario, that will make an already serious problem that much worse. 

While that wage will become the least the law will allow most employers to pay its workers, Chris Harwood, vice-president of the association, says it's a cost the association just can't pay afford.

He says long-term contracts previously negotiated with the Ontario government don't take the wage increase into consideration.

​Listen to Harwood's full audio interview with the CBC's Conrad Collaco by clicking the image above, or read the abridged and edited transcript below for a text version of the conversation.

Chris Harwood, vice-president of the Ontario School Bus Association

How will the minimum wage increase effect businesses that operate school buses?

Basically the root cause, or the root issue is funding.

The cost increases of this magnitude, which from today's minimum wage to January one's minimum wage of 22.8 per cent alone and then more in the subsequent year are substantial because they affect about 90 per cent of our workforce even more.

And as a consequence, with our funding, which government is the sole funder for this service and the contracts as mentioned are multi-year, never imagined this kind of cost increase, and as a consequence, there's just not enough money to operate a school transportation system once the wage increase kicks in.

Now when the contract was signed recently with the province, what's the budget for school bus drivers?

Well, the contract, some of them were signed some years ago and all of them were signed well in advance of any of us having any idea that these kinds of cost increases from a minimum wage standpoint were going to come into effect.

The contracts don't have the flexibility for adjustments related to this, at least not on there face. That's why we're calling on government to give us some consideration.

What consideration are you looking for? You have a set funding base, but are you saying that you don't have an ability to either control costs, or control revenue?

That's correct. Our revenue is set by the contracts and the costs are going to jump because of the minimum wage increase. We expect that we will have a funding gap of about $50 million as of Jan. 1, 2018.

And what has the response from the provincial government been to these concerns?

Well at this point they are certainly aware of the issue and are in the process we believe of coming up with a solution.

The reason we're making the public aware and most particularly, parents aware of the situation is because it is immanent. We are four months away from Jan one as we sit here today and the issue must be acted upon soon so we can maintain the service.

So parts of Ontario, certainly true in Hamilton are experiencing a shortage of bus drivers. We in Hamilton this Friday morning have notice about a very likely bus driver shortage that will impact local school bus routes this September, perhaps as many as 17 routes, serving 29 Hamilton-area schools – do you expect that these shortages will continue or become worse as a result of these funding issues?   

Well, with a lack of funding if we cannot get addition funding, I am absolutely certain that it will become substantially worse.

It's a serious problem around the province, is the problem that you just can't pay drivers enough to take the job?

Yes, and just so you understand, raising the minimum wage might help with this sort of recruitment issue and that's definitely a good thing and we want to pay our drivers, but with the government setting the bar on the funding side, there's only so much we have to go around.

What sort of an increase are you looking for?

Well, as mentioned, the initial increase that will be required as of the start of the year, start of the new calendar year is, we're looking at $50 million.

So on Jan. 1, 2018 when the wages go up, do you expect that kids will be waiting for buses that won't arrive?

You know it's somewhat difficult to predict, but yeah, it will be very, very bad if the funding isn't in, there in January, the service can't operate.

The decision is largely out of our hands and that's why we want to work with government to bridge the gap. And I should point out that government has been a very good partner with our association for decades and we're very hopeful that they will continue to be so.