Some Castlegar business owners have concerns about minimum wage increase

Some Castlegar business owners have concerns about minimum wage increase

Castlegar business owners generally support the increases to the minimum wage, but have questions.

Castlegar business owners generally support the increases to the general minimum wage, but also have questions and concerns, according to the Chamber of Commerce.

Tammy Verigin-Burk, executive director of the Castlegar & District Chamber of Commerce, explained the feedback she has received from the chamber’s members since the government of B.C. announced its plan to increase the general minimum wage to $15.20 by 2021: “It’s really interesting because I’m getting lots of feedback from chamber members and everybody is in support of people making a higher minimum wage. There’s a lot of concern for small business, hospitality sector, fast food restaurants, as an example, that will be drastically impacted by the minimum wage,” she said. “Their concern is that they have such a limited time.”

The timeline recommended by the Fair Wages Commission, whose report to government is informing changes to the minimum wage, is to increase the general minimum wage to $12.65 an hour on June 1 of this year, to $13.85 an hour on June 1, 2019, to $14.60 an hour on June 1, 2020 and finally to $15.20 on June 1, 2021.

Verigin-Burk explained that, for example, fast food restaurants in areas like Castlegar don’t necessarily have the high volume of locations in bigger centres, so absorbing the extra cost is a big concern for business owners.

“Some of the chamber members are saying, and this is across the province as well, their concern is that they’re going to have to probably increase their costs for the consumer, they may have to look at layoffs or they may have to lessen the hours that people are working,” she said.

“So it’s kind of a Catch-22 because of course everyone wants the quality of life for people and for their wages to increase, it’s just going to be a real challenge and they’re hoping that there are some government subsidies to support small business with this turnover,” Verigin-Burk added.

But the government is making it clear that there will be no subsidies.

Under a section on the Minimum Wage page of its website (gov.bc.ca/minimumwage) called “Information for Employers,” the government answers the question “Are there any subsidies available to help me absorb the cost of raising wages?” with the following: “Measured and predictable wage increases over four years allow employers time to plan and absorb additional labour costs.

“While there are currently no minimum-wage related subsidies, B.C. businesses are seeing savings through recent tax cuts, such as the 20 per cent reduction in the small-business corporate income tax rate, and the 50 per cent cut to Provincial Sales Tax (PST) on non-residential electricity, a tax that will be eliminated by April 1, 2019.”

But since the first increase is planned for June 1, businesses will need to revisit their annual budgets, which they’d likely completed prior to the government’s announcement on Feb. 8.

Verigin-Burk said that chamber members are also concerned about summer students.

“One of the calls I’ve been getting consistently has been from all those people who just applied for summer students. It’s $11.35, what was the minimum wage was the compensation and so then all of a sudden what is going to happen? Is the government going to give the jump or is everyone who just applied with $11.35, is that all they’re going to get?”

Contacted for comment about whether or not the government would help make up the difference for summer students’ wages, a representative of the Ministry of Labour reiterated that there would be no subsidies offered and that the government’s timeframe would provide regular and predictable increases so that businesses can plan ahead.

When we pointed out that that businesses had likely already planned 2018 budgets and had definitely already applied for 2018 summer students prior to the June 1 increase being announced, the representative again said there would be no subsidies and said that the government was following the timetable recommended by the Fair Wages Commission, which had consulted with business groups, employers, workers, labour groups, academics, economists, etc.

Bob Saari, the owner of Canadian Tire, is one of the local business owners who supports a higher minimum wage.

“I truly believe that the provincial government of British Columbia has taken the right moves in terms of growth in earnings for our employees, our managers and I truly believe that this initiative, its timing is certainly correct, it’s right,” he said.

Saari said in terms of his business’s response to the increase, they need to improve on their productivity “across the board within our business to ensure that our employees are looked after properly and that they’re earning the respectful dollar for the work that they are doing and I support the minimum wage increase.”

Verigin-Burk said some local businesses are also concerned about wages for servers.

In B.C., liquor servers, farm workers, live-in camp leaders, live-in home support workers and residents caretakers are not paid the general minimum wage.

Liquor servers are currently paid $10.10 per hour and Verigin-Burk said business owners in the hospitality industry wanted to know if the increase would apply to liquor servers as well.

It will not.

The changes announced by the government apply only to the general minimum wage, but the Fair Wages Commission will be providing recommendations on how to deal with alternate minimum wages by March, so an increase to the minimum wage for liquor servers could also be in the future.

A brief and recent history of minimum wage increases in B.C.

“For too long, the lowest-paid workers in our province have been left to fall behind, with their wages frozen for a decade at a time. That’s not fair and it’s not right. Like all British Columbians, our lowest-paid workers deserve a fair shake and a fair wage,” Premier John Horgan said when making the recent minimum wage announcement.

The nearly decade-long freeze on the B.C. general minimum wage was between Nov. 1, 2001, and May 1, 2011.

On Nov. 1, 2001, the minimum wage was raised from $7.60 per hour to $8.00 per hour, and that’s where it stayed until nearly 10 years later when it was raised to $8.75.

Both before and after the increase, it was the lowest minimum wage in the country at the time.

Following the increase in May, there was a second 2011 increase in November, when the wage was raised to $9.50.

It was raised again on May 1, 2012, to $10.25 and then wasn’t raised again until Sept. 15, 2015, when it increased to $10.45.

On Sept. 15, 2016, it increased to $10.85 and on Sept. 15 last year it increased to the current rate of $11.35.

B.C. minimum wage is currently the fifth highest in the country, with higher minimum wages in the Northwest Territories ($12.50), Nunavut ($13), Alberta ($13.60) and Ontario ($14).

The Yukon is only three cents behind us at $11.32 per hour.

For a look at minimum wages across Canada dating back to 1965, visit srv116.services.gc.ca/dimt-wid/sm-mw/rpt2.aspx.

The included graph shows the increase in B.C.’s general minimum wage over time since Nov.1, 2001 and includes the schedule of increases recommended by the Fair Wages Commission leading up to 2021.