Minimum wage hike 'right' thing to do, minister tells skeptical Cambridge business owners

Ontario's economic development minister told a roomful of Cambridge employers on Thursday that raising the minimum wage was the right thing to do, but a business leader says local companies are struggling to cope with its impact.

Steven Del Duca, who spoke at a "Good Morning Cambridge" breakfast, organized by the Cambridge Chamber of Commerce, said the wage increase allows workers to benefit from the economic growth that Ontario is experiencing.

Ontario's minimum wage went from $11.60 to $14 on Jan. 1, 2018. It is slated to rise to $15 on Jan. 1, 2019.

"It doesn't seem fair or right that when our economy is doing so well that many people don't get to benefit from that growth," Del Duca said early Thursday at the Galt Country Club. 

"That's one reason, maybe the most important reason, why we raised the minimum wage. I know it wasn't universally popular and I know some of you, the very employers who have helped turn our economy around, are finding it hard — particularly in businesses where margins are tight."

Del Duca said the provincial government knew there would be opposition. 

"I want you to know that our government weighed all its options carefully and this was not something we did lightly, but we thought it was important for more people to participate in the strong Ontario economy," he said.

Del Duca said the province believes people should be paid a "decent wage."

He added: "Doing the right thing is not always the politically safe thing." 

But Greg Durocher, president and CEO of the Cambridge Chamber of Commerce — which represents 1,840 business owners — said in an interview after the speech that small businesses in the city are finding the wage increase challenging.

"From the Cambridge Chamber of Commerce's perspective and our members, we don't necessarily entirely reject the comments. However, what we do is entirely reject the implementation path that the province has decided to go. We think it was too much, too fast," he said. 

"Our position is that the rapid increase of minimum wage is outpacing the ability of small business owners to be able to increase their own revenue streams in order to accommodate the added costs to the payroll."

He said the increase will benefit the provincial and federal governments because they will be able to collect more money from income tax revenue.

"There is no assistance, at this point, for small businesses who are struggling to try to retain as many employees as they possibly can and maybe even grow their businesses in these particular conditions."

Businesses cutting back on hours

Durocher said the chamber believes the increase to $15 should have been tied to inflation and phased-in over four to five years. It would have kept as many people employed as possible, he said. The provincial government did not "engage" with the business community to explain its plans, he added — despite the fact a public consultation on Bill 148 was held in Kitchener on July 19, 2017.

"There's no secret formula here. Businesses are not like government. Businesses can only pay out money that they get in," he said.

To cope with the added cost of the new wage increase, he said some businesses are cutting back on hours of operation. Some are scheduling only full-time shifts, while others are scheduling only part-time shifts. Still others are simply laying workers off. In some cases, those being let go are middle managers, he said. 

Durocher declined to name a business that has implemented "extraordinary" measures to cut costs, but he said he knows of a Cambridge computer assembly company, with 48 employees, whose monthly payroll has increased by $16,000 due to the wage increase.

The company has served notice to its workers that, in three months or by the end of March, it needs either to make more money or to cut costs or else it will have to reduce the number of its employees. 

'Should have engaged with small businesses'

Durocher said members of the chamber of commerce at the breakfast listened politely and respectfully to the minister, but many have a different view on the issue.

"We sympathize with actually what he had commented on. We understand that. From our perspective, though, we simply say: 'Okay, your government is honourable with its voiced intentions, However, we think we should have engaged with small businesses in order to implement this properly without any disruption to the economy,' " he said.

Durocher said the chamber is urging the province to seek ways to offset the impact of the increase.

Del Duca also said the province will continue reminding U.S. officials of the important of U.S-Ontario trade, in light of NAFTA talks, and is looking at the effect of recent U.S. tax cuts on the Ontario economy.