CFIB Statement: Unexpected minimum wage increase coming at the worst time for small firms | CFIB
Toronto, November 2, 2021—The Ontario government’s surprise decision to increase the minimum wage without consultation comes at the worst possible time for small businesses. Today, only 37 per cent of Ontario’s small businesses are at normal revenues. Many are operating at a loss every single day they are open. The average COVID-19-related debt is a whopping $190,000, and small business owners report it will take two-plus years to get out of that hole.
It is particularly concerning that the government has chosen to give restaurants – one of the hardest-hit and longest-shuttered sectors during the pandemic – 60 days’ notice of a 20 per cent increase ($2.45) to the liquor servers’ wage.
Small business owners heeded the call and understood when they were asked to close their doors to protect Ontarians’ health and safety. The pandemic has taken its toll, but it is not the only factor. The Ontario government chose to funnel shoppers to big box stores last holiday season while limiting small retailers to curbside only. The Ontario government chose to end its flagship small business support program one day before entering its third lockdown that lasted up to 200 days for some sectors. The Ontario government chose to allow big sports venues full capacity before local restaurants.
Today, fewer than one in five Ontario small business owners would advise someone to start a business.
In CFIB’s most recent survey, the increasing cost of doing business was the top concern of small business owners at 76 per cent, followed by supply chain challenges at 64 per cent. This move will not help to address Ontario’s labour challenges and will put more pressure on the wage scales for employers already paying above the minimum wage. January is usually the slowest month for many retailers. Commercial insurance rates are skyrocketing. The largest Canada Pension Plan (CPP) rise to date under the federal government’s CPP increase plan will take effect at the same time. Many businesses will lose their commercial eviction protection in mid-January and be asked to make up immediately for months of unpaid rent.
We urge the Ontario government to reconsider the timing of its proposal, conduct an economic impact analysis and consult with the small business community on the best path forward, potential cost offsets and mitigation strategies as our economy looks to recover.
-Dan Kelly, President, Canadian Federation of Independent Business (CFIB)
-Ryan Mallough, Senior Director of Provincial Affairs, Ontario
-Julie Kwiecinski, Director of Provincial Affairs, Ontario
For media inquiries or interviews, please contact:
Milena Stanoeva, CFIB
The Canadian Federation of Independent Business (CFIB) is Canada’s largest association of small- and medium-sized businesses with 95,000 members across every industry and region, including 38,000 in Ontario. CFIB is dedicated to increasing business owners’ chances of success by driving policy change at all levels of government, providing expert advice and tools, and negotiating exclusive savings. Learn more at cfib.ca.