Every province in Canada is trying to find the right balance with the minimum wage, but the issue particularly challenging for Atlantic Canada.
This region has long suffered high unemployment and low wages, a combination that cripples efforts to keep young people at home.
Meanwhile, Ontario, Alberta and British Columbia intend to raise the minimum wage to $15 an hour in the next two to three years. It’s seen by many as a reasonable living wage.
But it creates a major concern in this region for governments and businesses.
In Nova Scotia, the issue is before the legislature, where the NDP has presented a private member’s bill proposing the minimum wage move to $15. It’s sent Premier Stephen McNeil scurrying for cover because Nova Scotia currently has the lowest hourly minimum wage in the region — $10.35 for inexperienced workers and $10.85 for experienced ones. New Brunswick and Newfoundland and Labrador have reached $11, while P.E.I. is at $11.25.
The Canadian Federation of Independent Business warns that a $15 minimum wage is a job killer that could result in 29,000 jobs lost among young people in the Atlantic region. To their credit, most CFIB members pay above minimum wage, but certain sectors that employ large numbers of young people — such as retail and hospitality — say they can’t afford large increases.
The CFIB estimates that if all provinces adopted a $15-an-hour minimum wage, between 185,000 to 422,000 youth jobs would be at risk.
What businesses don’t like are surprise increases. Most provinces planning to move towards $15 an hour at least have signalled their intentions and established timelines. Others, not so much.
This spring, for example, the P.E.I. government announced plans to increase its minimum wage to $11.25 on April 1. Businesses had little more than a month to prepare, and there was widespread criticism. The Greater Charlottetown Area Chamber of Commerce — which represents more than 1,000 businesses — was quite vocal because there had already been two wage increases in 2016.
If provinces are going to legislate increases in the minimum wage, they must consult businesses well in advance.
The lesson was learned in P.E.I., with the province agreeing that any future increases to the minimum wage would be announced well in advance and will always occur on April 1.
Nova Scotia’s government says it wouldn’t raise the minimum wage this year and argues that a $15 rate would have a devastating effect on its business sector. But it may not have a choice. If it wants to keep young people at home, they will have to be paid a competitive wage.
Finding a balance in Atlantic Canada will become an increasing challenge.
If parts central and west offer jobs for $15 an hour, will young people stay here for $11 or $11.25?