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Minimum wage hike: The new higher cost of doing business

Businesses cry foul at provincial legislation to increase minimum wage
Radical Gardens owner Brianna Humphrey

Currently in its fourth year of operation, Timmins’ Radical Gardens was just starting to hit its stride, doing a brisk business at its restaurant, and earning rave reviews for its events and catering services.

And then came Bill 148, the Fair Workplaces, Better Jobs Act, 2017, new legislation which, owner Brianna Humphrey said, will have a devastating impact on her business.

"At this point, we have to restructure to the point where I don't actually know what Radical Gardens is going to look like come the new year, which sucks because our sales are up, and we're on a nice curve upwards; costing is down, everything's looking super good, we can see paying down some debt pretty soon, and we can actually see turning a profit,” Humphrey said.

“And boom! We’re hit with this whole slew of labour laws.”

Introduced by the provincial government on June 1, Bill 148 proposes to update current labour laws to increase Ontario’s minimum wage — from $11.40 to $14 per hour in 2018, and up to $15 per hour in 2019 — equalize pay among workers, and amend scheduling guidelines, among other changes.

The legislation is still at the proposal stage and would need final approval before becoming law.

Humphrey, who employs just under a dozen people at her farm, in the restaurant, and during catering events and festivals, said the changes amount to a 30 per cent wage increase.

Add to that a rise in costs for goods and energy, and Humphrey said she’s looking a 40 per cent increase in operations. Meanwhile, government subsidies to help farmers and agri-food producers have been cut.

The collective result will be a drastic change in how she operates. The legislation calls for $15-an-hour-wages, plus five paid sick days, five paid personal days, and she would have to give employees five days’ notice before changing the schedule — something that’s impossible to do when she relies on a daily weather forecast to plan planting and harvesting at her farm.

Humphrey said she will have to cut staff, will no longer be able to employ students during the summer months, and will likely go back to working 20-hour days just to get the work done and make ends meet.

She fears this could be the end of young, startup farms and agri-food businesses, and the stifling of growth of what was a promising Northern Ontario agri-food sector.

“Most farmers I know have no idea how the hell they’re going to do it,” she said. “They basically have to go back to family-run farms or sell their property to whoever the large companies are these days.”

Her concern is being echoed by the Ontario Chamber of Commerce, which, in August, released an independent economic analysis of Bill 148, in conjunction with the Keep Ontario Working Coalition.

The study suggests that the bill will put 185,000 jobs at risk over the next two years and trigger an increase in consumer goods and services of $1,300 per household starting in 2018.

“The changes presented in Bill 148 will have dramatic unintended consequences that include putting close to 200,000 jobs at risk, and seeing everyday consumer goods and services increase by thousands of dollars for each job at risk, and seeing everyday consumer goods and services increase by thousands of dollars for each and every family in Ontario,” said Karl Baldauf, the Ontario chamber’s vice-president of policy and government relations, in an Aug. 14 news release.

“We’ve run the numbers and it’s clear that this is too much, too soon. If the Ontario government chooses to proceed with these sweeping reforms too quickly, all of us will be affected, and the most vulnerable in our society chief among them.”

The overall cost to the Ontario economy could be $23 billion, the study concludes.
Humphrey said aside from her business, she’s already seeing the impacts on fellow small business owners.

In southern Ontario, her source for tomatoes — one of the largest greenhouses in Ontario — has closed and move its operations to the U.S. where labour and energy costs are cheaper. And a friend and fellow restaurateur in North Bay has pre-emptively closed his restaurant in anticipation of the changes.

“The Liberal government basically just stifled innovation, really,” Humphrey said. “It’ll be really hard for a new business, unless it’s super service-based, only dealing in high-skilled, high-paid workers.”


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Lindsay Kelly

About the Author: Lindsay Kelly

Lindsay Kelly is a Sudbury-based reporter who's worked in print and digital media for more than two decades. She joined the Northern Ontario Business newsroom in 2011.
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