On October 1, Prince Edward Island’s minimum wage went up from $16.00 to $16.50 an hour, with another increase to $17.00 set for next April. These increases do little to improve affordability for the people they’re meant to help. At the same time, they place extra pressure on small businesses. Every minimum-wage hike ripples through payrolls: 84% of small businesses report being affected, even though only 38% hire minimum-wage workers directly.
Entrepreneurs already strive to pay fair wages and retain good employees. In fact, 90% of small businesses pay above the minimum wage for most positions, showing how much they value experience, loyalty, and a skilled workforce. But when broad, government-mandated wage increases come into play, costs go up without boosting productivity, making it harder to sustain jobs, especially during slower economic times.
The good news is there’s a smarter way to support workers without adding strain on small businesses. Policies like increasing the basic personal amount and adjusting tax brackets let people keep more of what they earn. These measures help low- and modest-income Islanders without creating extra costs for employers, a clear win-win.
For the households that truly need help, targeted income supports are far more effective than blanket wage hikes. Using minimum-wage increases to fight poverty is like trying to fix a leak with a hammer. By focusing on evidence-based, market-linked policies, PEI can help workers afford everyday life while keeping small businesses strong and competitive.
At CFIB, we want PEI to build on the tax reforms that already work and explore more efficient approaches to setting wages. Small businesses need policies that help them grow, create jobs, and support their employees, not ones that add costs without real benefits.
Interested in learning more? Join CFIB as a member today to get support, savings, and resources to help your business be successful.
Print Article
Share Article
