Businesses see red as B.C.’s minimum wage climbs, but labour says it’s not enough

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What B.C.’s increasing minimum wage could mean for consumers
WATCH: B.C.'s minimum wage has gone up, and is now one of the highest in the country. – Jun 1, 2023

British Columbia’s lowest-paid workers are getting a raise of more than $1 per hour starting Thursday, as the province’s minimum wage climbs yet again.

Over the last six years B.C.’s minimum wage has increased by more than four dollars, following the NDP government’s pledge to tie annual hikes to inflation.

Click to play video: 'What B.C.’s increasing minimum wage could mean for consumers'
What B.C.’s increasing minimum wage could mean for consumers

Surging inflation this year has meant the minimum wage climbed 6.9 per cent from $15.65 per hour to $16.75.

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The BC Federation of Labour has hailed the increase as good news for workers, but said it still doesn’t come close to matching the “living wage” in parts of the province.

The Canadian Centre for Policy Alternative’s latest calculation for the living wage for Metro Vancouver — a measure that calculates what two parents must earn to support a family of four — pegged it at $24.08 per hour.

“It gets us a bit closer of course, and there’s been lots of programs like child care and things that have helped bridge the gap a little bit,” federation president Sussane Skidmore told Global News.

“But the reality is the minimum wage doesn’t keep up with the living wage, it doesn’t keep up with the extreme unaffordability of living in so many cities in this province.”

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British Columbia’s minimum wage increasing to $16.75

But while labour groups say the wage hike is good for workers, business groups say it’s one more cost dragging down balance sheets.

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Ian Tostenson, president and CEO of the B.C. Restaurant and Foodservice Association, said he had hoped for an increase closer to three per cent, and argued the minimum wage should potentially be calculated differently for the hospitality sector.

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“Most of the people who make minimum wage in our industry, in full-service restaurants, they’re also tipped employees,” he said.

According to Restaurants Canada, the food service industry has seen bankruptcies increase by 116 per cent since 2022 amid rising costs and pandemic after-effects.

“You have to make sure the business has the ability to actually pay that minimum wage, otherwise you end up increasing your prices, then you’re going to get a problem with your consumer saying ‘hold on’. Do we really want an era of $25 hamburgers?” Tostenson asked.

“This is not going to take the industry over the edge, but for some people, it will be the last straw, they’ll just say, ‘You know what, it’s not worth it because I’m not making any money.'”

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B.C. minimum wage increasing on June 1st

At Surrey’s Morgan Creek Golf Course, about a third of workers are currently making minimum wage, according to Tom Doull, director of golf operations.

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That means a significant increase to the business’s bottom line — in part because workers earning slightly more than the minimum will also need pay hikes to match those below them.

That’s on top of other inflationary pressures, including the cost of food and things like fertilizer, fuel and grass seed.

“It’s affecting our payroll in a dramatic way,” he said.

“We try to manage our business and keep our customers happy, but we are raising prices.”

Surrey Board of Trade president and CEO Anita Huberman said the wage hike comes on top of significant property tax increases for businesses in that city — in some cases topping 150 per cent for commercial enterprises.

“They’re going to have to take a look at their whole business model if they haven’t already, in terms of passing off that additional cost to their consumers, in terms of automation, in terms of reducing the amount of time they are open,” she said.

“That’s simply unsustainable. So they have looked at colocation opportunities in Washington state, in Alberta where the tax climate is much more attractive.”

Click to play video: 'How businesses feel about B.C.’s minimum wage going up in June'
How businesses feel about B.C.’s minimum wage going up in June

Skidmore responded to those concerns by arguing every dollar given to the province’s lowest-paid workers quickly makes its way back into the economy as essential spending, boosting local economies.

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“We see small business owners all over this province who give decent wages, they provide benefits for their employees, and they’re doing OK,” she said.

“The reality is if your business model is built on the backs of keeping people in poverty, maybe that’s not the best model to be working on. There’s got to be a way.”

The province estimates the wage hike will affect about 150,000 people. The increase makes B.C.’s minimum wage the second-highest in Canada, behind Yukon.

– with files from Janet Brown

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