Business, labour groups clash at Senate committee over $15 federal minimum wage

OTTAWA — The head of the country’s largest private-sector union says Parliament should raise the federal minimum wage to $15 per hour, and possibly put future increases into the hands of an independent commission.

Unifor president Jerry Dias said an independent commission could be comprised of key stakeholders to research the effects of minimum-wage policy in Canada and tone down the politics involved.

Dias made the comments during a Friday morning appearance before a Senate committee reviewing parts of the government’s sweeping budget bill, including the provision around the minimum wage in federally regulated industries.

If passed, C-30 would raise the federal minimum wage to $15 per hour, or to the provincial rate if it is higher, and peg annual increases to the rate of inflation.

While Dias argued the increase won’t have a negative economic or employment impact, a business group appearing alongside him warned otherwise.

The Canadian Federation of Independent Business said small- and medium-sized companies may be unable to cover increased payroll costs while revenues remain low, which could result in fewer entry-level hires for young workers, or fewer hours for existing staff.

Setting the federal minimum wage at a stand-alone rate of $15 per hour has been recommended in two separate consultations on labour standards the Liberals have run since coming to office in late 2015, and both times it divided labour and business groups along the same lines as it did Friday at the Senate committee.

“I’ve never seen any of the business federations ever say, ‘Hey, this is a good idea,'” Dias said. “There’s always Armageddon if we raise the minimum wage. ‘Thousands and thousands of jobs will be lost’ — we always hear it. And it’s nonsense because the numbers show the opposite.” 

It’s why Dias suggested the government look at creating a minimum-wage panel similar to one in the U.K. that could make recommendations, with governments having the final say, and “eliminate a lot of the myths and the BS that comes out of these types of debates.”

A 2017 research paper by the Bank of Canada that looked at minimum wage increases suggested what was planned at the time provincially could lead to a  0.3 per cent decline in hours worked, but noted that overall labour income would go up.

But that was before the pandemic.

CFIB vice-president Jasmin Guénette said the government should look at the measure through the lens of the pandemic to see how raising the federal minimum wage might affect businesses who have taken on debt to survive,  and workers trying to find jobs.

“We are not out of the pandemic yet and now is not the time to increase costs on businesses, and government should first focus on reopening the economy and making sure that businesses can survive the pandemic,” he said during his opening remarks. 

“Even if the government legislates a $15 minimum wage, it will do little to help workers if they don’t have a job to return to.”

Senators were told about 26,200 federally regulated workers earn less than $15 per hour as it stands, among them airline ticket and service agents, transport truck drivers, and customer service representatives at banks or telecom companies. The vast majority are located in Ontario and Quebec.

The small number of workers affected was among the reasons why the Liberals panned the idea of raising the minimum wage when the federal New Democrats proposed doing it as part of that party’s 2015 election platform.

However, the Liberals changed their minds during the pandemic.

Senators were told by officials at Employment and Social Development Canada, which oversees labour standards, that the cost for companies to raise wages to the new minimum would be about $44.1 million in the first year.

The Senate committee was also told there could be spillover effects where workers earning just above $15 per hour may want, and see, a raise that could add to overall payroll costs, but the actual impacts are difficult to estimate.

This report by The Canadian Press was first published May 14, 2021.

Jordan Press, The Canadian Press