Tag Archives: NDP

Why Small Business is Concerned About the 15 Dollar Minimum Wage

Atlantic Canadian small business owners should start bracing themselves for the 15 dollar minimum wage campaign. The governments in Alberta and Ontario have both bought into the idea, and now British Columbia’s new ‘GreeNDP’ coalition is putting it on the table. It’s being driven principally by Canada’s largest labour unions and a coalition of the federal and provincial NDP and social activists.

Let’s be clear, the Canadian Federation of Independent Business (CFIB) is responsible for advancing the interests of our members, small- and medium-sized, independent businesses. Firms ranging in size from your mom and pop shop to companies with up to 500 employees. CFIB has led awareness on this 15 dollar minimum wage issue because these are the businesses who will suffer, shrink or die with such a sudden spike in labour costs.

Because of their size, the Loblaws, Walmart and Shoppers Drug Marts of the world will be much better positioned to absorb this shock, but make no mistake, they will also be shedding staff, cutting hours and eliminating opportunities for young, entry-level workers, who make up the vast majority of those who are earning a minimum wage.

Most CFIB members already pay well above minimum wage for employees as most small businesses understand the importance of valuing and retaining staff. CFIB certainly has no argument with improving pay and benefits for employees when appropriate and our members support these efforts.

Our argument is with a government mandated spike in the wage floor which will put the sustainability of small business in peril. Remember, this is not just about entry level workers, a 32 per cent increase in the wage floor will put enormous pressure on employers to increase the wages of all staff.

Armine Yalnizyan, a principal advocate for the 15 dollar minimum wage and an author of the Canadian Centre for Policy Alternatives’ (CCPA) Inequality Project, clearly stated this week, “Yes there will be a reduction in some hours, some jobs, some businesses. No argument there. And most vulnerable workers (teenagers and newcomers) will bite the bullet first, particularly when there’s a downturn in demand.”

Her comments are remarkable unto themselves, but I would also ask, what is the acceptable casualty rate? How many hours should be cut and how many young workers should lose their first jobs? How many businesses are they prepared to sacrifice to hit this arbitrary target?

And where will this new money for wages come from? Will it come from increased profitability? That seems unlikely in light of increased labour costs. Will it come from stronger employment? That’s not happening as, it seems everyone agrees, these higher wages will inevitably lead to reduced hours and/or job losses. Will minimum wage workers suddenly become 32 per cent more productive? Unlikely.

Finally, our region’s economy is far more fragile than Alberta, Ontario or BC. If there are politicians musing about this here, we would ask they understand the repercussions of this kind of wage spike before we even think about such a move in Atlantic Canada. We’ll have the opportunity to watch how this experiment plays out in those other province’s economies first. Fortunate for us, not so much for them.

This originally appeared in the Chronicle Herald, June 9, 2017

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Winter is Coming

Game of Thrones

Nova Scotia’s electoral Game of Thrones is in full swing and while it may lack the dramatic flair of the HBO series, it has one thing in common, winter is coming. Unfortunately, the parties are either unaware of it or are seemingly oblivious to a stark reality.

All of the parties have launched their offensives by flinging open the doors to the treasury, each with new and creative ways to spend our tax dollars with the greatest political efficiency.

The number one priority for CFIB’s 5,200 members in Nova Scotia, consistently, is a reduction of the overall tax burden and the clearest path to this is through alignment of public sector wages and benefits to private sector norms and an overall reduction of the size of the public service. In other words, reduce the cost and the size of government.

For those who argue we have already been dealing with austerity budgets, here’s the reality. Since 2007 Nova Scotia government spending has risen from $7.3 billion to $10.5 billion, an increase of 43 per cent. Additionally, we’ve seen a whopping 22.5 per cent increase in our debt from $12.4 to $15.2 billion over the same time period. All this with an increase of only 16 per cent in the CPI (inflation) and our population flat-lining at 1.5 percent. This is not restraint and certainly not “austerity” by anyone’s definition.

Spending restraint is becoming more important than ever before. Perhaps because the weather is warming our politicians are floating sunny prognostications but there is an inevitable, relentless sociological cold front headed our way. Stretching our Game of Thrones metaphor, let’s call it “The Wall”.

According to Statistics Canada, that “wall” can be found in baseline population predictions. In 20 years, those over 65 years of age will make up fully 30 per cent of our population. A great majority of those will be out of the workforce and needing higher levels of healthcare. Keep in mind, in 2013, that same cohort made up only 17 per cent of Nova Scotia’s population.

By 2038, the forecasts indicate our median age will be nearly 50 and our overall population is expected to decline to under 934,000.

So who will carry additional tax load? If you’re a voter in your 20’s and 30’s, have a look in the mirror.

While efforts are being made to increase immigration, and claims are being made about having the largest population “ever”, the fact remains, unless we make some fundamental and dramatic changes to the way our government spends, we will be faced with some very, very difficult decisions indeed.

Absent in all of the spending promises in this election is a discussion of any long-term fiscal planning to deal with this issue. By long term, we don’t mean 4 years out, we mean 25 years out. Intergenerational forecasts which will set sustainable spending patterns.

Where are the real plans to deal with the inevitable decline in revenues from a shrinking and aging workforce? While some creative gains are being made through immigration, they are incidental and the problem is not getting people to Nova Scotia, it’s keeping them here. More than half of those who arrive leave within five years.

It’s not much wonder as we’ve been struggling with economic growth and carry the some of the highest tax burdens in the country. Our public service is nearly 5 points larger than the national average and their salaries and benefits are completely out of whack with private sector norms. Is anybody connecting the dots?

Meanwhile, the front pages are littered with political spending sprees.

Small business owners want politicians to have the courage to not just stop the bleeding, but begin to fix the problem through an actual reduction in the size of government, lowering the costs of doing business and a putting laser-like focus on better regulation and more efficient service delivery.

If not, we are sentencing our next generation to a cold, bleak future, on the other side of the wall.

This originally appeared in the Chronicle Herald, May 13, 2017