Ontario's minimum wage hike too much for auto parts manufacturers, industry group says

Automotive parts manufacturers are sounding the alarm about the proposed increase to Ontario's minimum wage and other changes to employment and labour rules.

• Ontario becomes 2nd province to go ahead with $15 an hour minimum wage

• Ontario businesses want corporate tax cut to offset $15 minimum wage

The proposed changes will make auto part suppliers less competitive and will make it more expensive to attract and retain workers, according to Canada-wide industry group that is lobbying the province. 

Flavio Volpe, president of the Automotive Parts Manufacturers' Association (APMA) sent a letter to Labour Minister Kevin Flynn this week, outlining his member's concerns with the Fair Workplaces, Better Jobs Act.

When contacted by CBC News, Volpe was quick to point out, while auto parts manufacturers already pay more than the minimum wage, increasing the amount to $15 an hour by 2019 will make it more expensive to attract and retain workers.

"As an employer, I'm going to have to create a delta between the new minimum (wage) and my current starting salary to be able to get people to convince them to come in with us," he said. "It raises the floor for everybody."

Killing competitive edge

Donald Rodzik Jr., corporate manager for The NARMCO Group, an auto parts manufacturer in Windsor, said the starting wage under their current collective agreement is less than $15 an hour. He is concerned his company's bids on future work will no longer be competitive once the minimum wage increases, especially compared with firms in the United States.

• Why Ontario asparagus is at risk if minimum wage goes up

"We will not be able to replace work which is leaving, resulting in layoffs and job losses for employees," Rodzik wrote in a letter to the government.

Jonathon Azzopardi, president and CEO of Laval International, a tool and mould maker in Tecumseh, said because his company performs highly skilled work and supports a living wage, an increase to $15 would not have a major affect on his operations. 

He does, however, think the government is increasing the cost of doing business too fast, mentioning other changes such as the cap-and-trade program and rising electricity prices.

"Doing business in Ontario is getting to be more and more difficult because of all of the things on top of each other," he said. "If it was just the minimum wage, you probably wouldn't get such a negative reaction."

More than minimum wage increase

While the minimum wage increase is the most discussed element of the Fair Workplaces, Better Jobs Act, a number of other changes are proposed.

These include:

• After five years with the same employer, the minimum vacation entitlement for workers would rise to three weeks per year.
• All workers would also be given 10 personal emergency leave days a year, and a minimum of two of those days must be paid.
• Employers would not be allowed to request a sick note from an employee taking personal emergency leave. 
• Equal pay would be mandated for part-time workers doing the same job as a full-time workers.
• Employers would be prohibited from misclassifying employees as "independent contractors."

Other changes address shift work. The legislation proposes that:

• Employers would be required to pay three hours of wages to an employee whose shift is cancelled with less than 48 hours notice.
• Employees would be able to refuse shifts without repercussion if given less than four days notice.

'An unworkable requirement'

Rodzik says the requirement to give employees four days notice before assigning work would be particularly detrimental to the very nature of the automotive industry, due to its fast-paced model that delivers products just-in-time for larger assembly.

"Overtime can be required on short notice, and if the just-in-time schedule is not met, there are significant financial penalties imposed on the company by its customers," he wrote. "Requiring 96 hours notice is simply an unworkable requirement."

• Could $15 minimum wage and paid sick days eliminate jobs? Yes, say small business stakeholders

Rules surrounding the unionisation of workplaces are also relaxed in the proposal. Volpe thinks making these changes at a time when the North American Free Trade Agreement is being renegotiated is a bad idea.

"It creates a perception that we have an issue with labour — inflexibility with labour — and we don't," he said. "This isn't the right time to do it, especially because we're now opening negotiations with those two trading partners on the new terms of business."