Significantly higher payroll costs for small businesses comes at a price
VANCOUVER, February 8, 2018 – The Canadian Federation of Independent Business (CFIB) expressed major disappointment that the BC Government has announced it will hit small business with a series of substantial hikes in the minimum wage with little to no transition support or mitigating measures.
“The decision to front load an 11.5 per cent increase this June is going to do serious harm to those small businesses that have entry-level jobs. But the biggest losses will be felt by young people trying to gain a foothold in the working world, and new Canadians looking to gain valuable work experience. The politicians shouldn’t kid themselves, the list of impacts will be long and serious”, said Richard Truscott, CFIB Vice President, BC and Alberta.
Recent survey data reveals that increasing the minimum wage to $15 an hour by 2021 will put the financial health of 52 per cent of small businesses in jeopardy. To ease the burden, the province could introduce mitigating options such as setting a longer phase-in for small businesses (83 per cent support) or providing a tax credit to help absorb the costs (77 per cent support).
Truscott added: “Sadly, this is not the only aggressive policy change small businesses are facing. Add in the additional hikes to the carbon tax, looming changes to the labour code and employment roles, the fear of possibly replacing MSP revenue with a payroll tax, property tax increases, proposed federal tax changes, and planned CPP and EI increases, and governments are creating a near perfect storm that will simply swamp many entrepreneurs.”
“Perhaps the most important questions of all: Where is the economic impact analysis that goes along with such radical change in government policy? And what sort of mitigating measures will they implement to try to offset the huge increase in payroll costs this aggressive policy will no doubt cause?” asked Truscott.
“Ultimately, we need to move beyond the politicking and the sloganeering. We need to look at more effective and meaningful ways to help people advance to better paying jobs and find new employment opportunities, through improved training programs, tax reforms, and information and guidance about how to make it happen,” concluded Truscott.
The CFIB survey findings are based on two surveys; the first: 726 responses, collected from a stratified random sample of CFIB members, to a controlled-access web survey. Data reflects responses received in January, 2018. The second: 735 responses, data reflects responses received September 29th to October 17th, 2017. Findings are statistically accurate to +/- 3.4 per cent 19 times in 20.
To arrange an interview with Richard Truscott Vice-President, BC and Alberta, please call 604-684-5325 or email [email protected].
CFIB is Canada’s largest association of small- and medium-sized businesses with 109,000 members across every sector and region, including 10,000 in B.C