How a $15 minimum wage could impact B.C.’s economy

There is both growing support and deepening concern over the coalition government’s proposed plan on a $15 minimum wage in B.C.

Small business owner Kristina Sonney says she wholly supports paying people a fair wage and does so for her employees. However, she says a sudden increase to $15 could cripple business at her small cafés.

“I think we need to talk about it some more,” she said. “We need to look at what works in other cities doesn’t necessarily work here and understand the situation in Vancouver
far greater than it already is being understood.”

Sonney said a boost to the minimum wage is especially challenging for Vancouver-based businesses that also have to contend with high turnover, rising rents and hydro bills.

“And unfortunately, they keep going up,” she says. “I understand labour has to go up, but the well runs dry. There’s no more water at the end of the day.”

The New Democrats and Greens now appear poised to raise the base rate from $10.85 to $15. A move to $11.25 in the fall had already been in the works. The proposed increase follows similar moves by Alberta and Ontario.

WATCH: Low-income Ontario workers rejoice, small businesses concerned as $15 minimum wage announced

2:13 Low-income Ontario workers rejoice, small businesses concerned as $15 minimum wage announced

Ian Tostenson of the B.C. Restaurant & Foodservices Association is urging caution.

“What’s happening in Ontario now is chaos,” Tostenson said. “You have a lot of small businesses that are saying they probably can’t afford that kind of increase so quickly.”

Both Tostenson and Sonney are hopeful government will work with businesses and not against them.

“What we hope the government does is make something that’s predictable and something that the business can plan for,” Tostenson said.

The coalition says it’s going to set up an arm’s-length Fair Wages Commission aimed at charting a path to a $15 minimum wage. The plan is for the commission to make recommendations focused on closing the wage gap. However, it’s still unclear who the commission’s members will be.

“We’re not the government and at that point people will be selected,” Vancouver-Hastings NDP MLA Shane Simpson said. “We’ll be looking for a commission that clearly broadly covers the interests around these issues.”

In the meantime, wage-watchers like Mark Thompson, a professor emeritus at UBC’s Sauder School of Business, says any significant increase to the minimum wage in B.C. is long overdue.

“We have the highest rates of child poverty in Canada, we have a lot of low wage jobs… in this city,” he said, rejecting the arguments from industry that a wage increase would stunt growth.

“They don’t have any data. The data that have been collected by neutrals shows that increases in the minimum wage in the order of 10 or 15 per cent — which is how these
stages go — have almost no effect on employment,” he says.

Tostenson disagrees.

“Academically, you can make those arguments, but practically, if you’re a business owner and you have a bank loan and employees, you have very slim margins which are traditional in the restaurant industry. Those are facts,” he said.