Ontario businesses want predictable, transparent minimum wage

Linking minimum wage increases to CPI a good solution: Ontario Chamber of Commerce
|hrreporter.com|Last Updated: 09/12/2013

Ontario businesses want the government to adopt a more predictable and transparent method of determining the minimum wage, the Ontario Chamber of Commerce (OCC) said.

A new report released by the OCC urges the government to develop a new process for determining the minimum wage that is linked to the consumer price index (CPI).

Linking changes to the minimum wage to the CPI would enable government to better relate minimum wage to changes in the cost of living, the study said.

At this point, the minimum wage in Ontario is determined on an ad hoc basis, and without any clearly defined criteria, the report said. Creating clearly defined criteria that are linked to the CPI would serve to create a more transparent process.

“We’ve considered all the options at Ontario’s disposal,” said Allan O’Dette, president and CEO of the OCC. “Tying the minimum wage to the CPI will bring predictability to the process. It will allow businesses to plan for increases in their labour costs and protect the long-term purchasing power of workers earning minimum wage.”

The OCC consulted 1,200 of its members from across the province to gather information for the study.

Ontario’s current minimum wage of $10.25 is the highest in the Great Lakes region and falls above the national average. The minimum wage in Ontario has increased by 50 per cent over the last decade.

The OCC said while it supports regular increases to the minimum wage, it is cautious against any formula that would lead to increase that outpace inflation.

“We’ve seen convincing evidence that major hikes in the minimum wage will have adverse effects on employment levels, particularly among youth and in Ontario’s retail, hospitality, and leisure sectors,” O’Dette said.

A recent Chamber survey found 60 per cent of retail, hospitality and leisure sector employers felt an increase in minimum wage would hurt their business and force layoffs.

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