BALSOM: Tackle our biggest problems, but use reliable data
(Mike Groll/AP file photo)
At Greater Niagara Chamber of Commerce, our message has always been that policy needs to be carefully crafted and be based on reliable research, stakeholder consultation and diligent analysis.
Our objection to the recommendations of Ontario’s Changing Workplaces Review is partly about the effects that the recommendations will have upon Ontario’s businesses, labour market and our long-term economic prosperity, and partly about the absence of an economic impact analysis.
Take the $15 an hour minimum wage proposal as an example.
In 2014, the government committed to increasing the minimum wage annually in line with inflation. We applauded this decision. It was fair to employees and employers, it was predictable, and it de-politicized minimum wage.
Now the Changing Workplaces Review is recommending we undo that — despite the fact that they initially stated they would not touch minimum wage, since it was outside the scope of their review. We are now barely a year away from a provincial election, which changes everything.
The 2014 decision was a reasonable, fair and evidence-based approach to minimum wage. We are concerned that these decisions are being made without any thought for the long-term consequences.
A minimum wage increase will increase the wages of many earning above minimum wage, as they will expect a similar bump. This will most likely all be lost in inflation — higher wages across the economy will mean rent increases, utility bill hikes, more expensive food, pricier household goods, and everything else besides.
A wage hike this large and this fast will result in only nominally higher earnings. Nobody will actually be able to buy any more than they could before.
When the government announced a 25 per cent hydro rate cut in Budget 2017, we cautioned that simply paying down hydro bills by adding to the debt is bad business practice. Recent documents indicating that hydro bills will begin to skyrocket again in 2022 proved us right. That policy was a Band-Aid solution designed for short-term gains, but what we needed was a long-term, sustainable plan.
The review recommendations also remove many of the exemptions made for small businesses. These exemptions existed for a reason. Businesses with hundreds of employees may absorb these changes, but most of Niagara’s businesses have fewer than five employees. They don’t have HR or legal departments to help them. What consideration has been given to them in these policies?
The impact of these changes on small businesses will be especially marked. Small businesses do not have the cash reserves or the resources of larger firms to absorb sudden and drastic changes. Almost three-quarters of Ontarians work for a small business, and 88 per cent of new jobs are created by small businesses. As a province, we gamble with the health of small business at the risk of our own prosperity.
Business in Ontario has taken a lot of hits in recent years. Promised reductions in small business taxes from both the provincial and federal governments were cancelled, but what was delivered were sky-high hydro bills, cap-and-trade, new development charges, new excise taxes, maxed-out hikes to EI premiums, more expensive pension contributions, and more.
Government must think long term and commit to planning with evidence, data and sound analysis. We need a prosperous Ontario not just for ourselves, but for our children and our grandchildren.
We do believe in tackling our biggest challenges, and we support forward-thinking reform where reform is needed, as long as it includes a sound and publicly-reported economic impact study. Our worry is what will happen in years to come when, as with hydro rate cuts or the ballooning provincial debt, the short-term solutions run out and we are left with even bigger problems and even fewer tools to deal with them.
— Mishka Balsom is CEO and president of Greater Niagara Chamber of Commerce and can be reached at Mishka@gncc.ca