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Lynn O’Neill prepares a sub at the Subway restaurant on University Avenue in Charlottetown. The Employment Standards Board has completed a review over the province’s minimum wage and sent its recommendations to cabinet.
CFIB wants more predictability with wage increases
Islanders will find out later this month whether they can expect an increase in the province’s minimum wage any time soon.
The Employment Standards Board has completed a review over the province’s minimum wage and sent its recommendations to cabinet.
A spokesperson for the Department of Environment, Labour and Justice said those recommendations will likely be brought before cabinet sometime this month. The spokesperson could not say whether the recommendations include an increase on minimum wage, which is now $10 an hour.
WIth a spike in Ontario’s minimum wage announced last week, anti-poverty groups on P.E.I. have also been calling for an increase to better reflect the cost of living.
Small businesses, on the other hand, find unpredictable spikes like Ontario’s worrisome.
Erin McGrath-Gaudet of the Canadian Federation of Independent Business (CFIB) said while the CFIB expects minimum wage to increase as cost of living rises, quick rises can be tougher for businesses to absorb and often lead to price increases or staffing cuts.
“Similar to any household, if something goes up in price you’ve got to make adjustments for it,” she said. “If it’s something businesses can’t absorb through price increases, they usually have to cut through staffing … Maybe it means they don’t hire that part-time student this summer. Typically it’s a reduction in hours.”
With minimum wage increases on P.E.I. outpacing inflation in recent years, McGrath-Gaudet said the group would like to see a timeline or formula created as a more predictable guide.
This could include picking a specific date each year to announce whether there’s an increase, a government guarantee of six months notice before any changes or directly tying in minimum wage with inflation.
“There would be a lot of predictability, accountability and transparency… so it’s not a political process ,” she said. “It would be tied to something. You would know minimum wage is going to go up next year with inflation so you’d know what’s happening.”
While Ontario had a four-year freeze on minimum wage, it was announced last week that as of June 1, the hourly minimum wage will rise from $10.25 to $11 an hour. The student minimum wage and liquor servers’ wage will also increase.
McGrath-Gaudet said her group would also like to see P.E.I. adjust the personal income tax system.
“A lot of people don’t feel income has been increasing. It’s not the minimum wage side, it’s the tax side. We’re one of three provinces that doesn’t adjust income tax to inflation,” she said.
The personal income tax rate on P.E.I. has almost doubled in the past 10 years from 3.4 per cent to 5.6 per cent, said McGrath-Gaudet.
“If government wants to help low-income earners, they should also be adjusting personal income tax system,” she said. “Those low-income earners are getting hit quite hard.”