The New Year brought with it new challenges for owners of small and medium-sized businesses across Ontario.

On January 1st, The Fair Workplaces, Better Jobs Act—better known as Bill 148—came into effect. The legislation makes significant changes to Ontario’s labour and employment law landscape, from extending paid vacation for qualifying employees, to making it easier to unionize. Other new compliance requirements will be rolled out this year and next.

But there was one major amendment that sent shockwaves across the province’s entrepreneurial community: an increase of the minimum wage to $14 per hour from $11.60, with another $1 jump slated for Jan. 1, 2019.

Almost immediately, business owners took action to protect their bottom lines. Some laid off workers, while others eliminated paid breaks and rolled back some paid benefits. The latter was the case at several Tim Hortons franchises in Cobourg, Ont., owned and operated by Ron Joyce Jr. and his wife, Jeri Horton-Joyce—the son and daughter of company founders Ron Joyce and Tim Horton, respectively.

In response to the Joyce’s cost-saving moves, Premier Kathleen Wynne decried the actions of the Tim’s franchisees and cautioned others who might consider similar changes in future. The Ministry of Labour promised to crack down on any organization that violated the Employment Standards Act to protect its profit margins in the wake of the minimum wage increase.

Labour Minister Kevin Flynn followed by saying this: “The problem with the minimum wage was that the baseline was too low. We were doing it the right way, but we started from too low a place. So, what we don’t want to do is we don’t want to politicize this issue again.”

He’s right. ‘Politicizing the issue’ is exactly what should be avoided.

To be clear, our organization stands firm in its support for a strong living wage for our employees—many of whom earn at or near the minimum. In our view, providing adequate pay helps our staff make ends meet, helps ease the many financial stresses they might encounter, and helps them be better, more productive employees—not to mention engaged members of society who don’t have to struggle simply to put food on the table. That’s a win-win for our province and everyone across the political spectrum.

The challenge with raising the province’s base salary by nearly 30 per cent literally overnight is that it created an unbearable burden for entrepreneurs. And no, most business owners are not multimillionaires who can afford to shoulder the burden of such a rapid increase in overhead costs.

According to the Great White North Franchisee Association, which represents more than 50 per cent of Tim Hortons franchisees, the new minimum wage will cost the average Tim’s franchise $243,889.10 per year. Those numbers are staggering. Worse, they could send some franchises into bankruptcy. But the ripple effect doesn’t end with restaurants and food services companies. Other, far larger, firms such as Wal-Mart announced layoffs soon after the wage spiked.

I think we can all agree that our small and medium-sized business owners contribute a great deal to Ontario’s economy, including innovative new products and services, all while driving economic activity and helping to create jobs that fuel our province’s growth. A simple compromise—namely, a more gradual increase in wages—would have helped mitigate the impact of these changes.

It’s important to remember that entrepreneurs are not bullies. We’re simply trying to earn a living ourselves, while also keeping our staff employed in the face of crippling changes to the provincial business landscape. That’s not an easy task at the best of times—less so in the face of sweeping amendments to employment standards laws and compliance requirements.

Winston Stewart, founder

Wincon Security

 

 

When the Ontario government announced plans earlier this year to increase the province’s minimum wage, many small and medium-sized business owners like you were stunned by the pace of change being proposed by the current Ontario government. I shared in your disbelief.

The minimum wage hike is contained in Bill 148, the Fair Workplaces, Better Jobs Act 2017, which increases the rate from the current $11.40 per hour to $14 per hour on Jan. 1, 2018. It will jump again, to $15 per hour, on Jan. 1, 2019. In addition, the new law is introducing a host of legislative amendments including increasing the minimum paid vacation time for employees, increasing paid emergency leave entitlements, banning sick notes and amending employee scheduling rules under the Employment Standards Act.

That’s only the tip of the iceberg in terms of Bill 148’s potential impact on Ontario businesses.

Leading the way with a winning team 

To be clear, Wincon Security is a proud employer to more than 300 Ontarians on a full- and part-time basis. We believe that everyone deserves a fair living wage and good working conditions. In our 25th anniversary year, we’re proud to have earned a reputation as one of the Greater Toronto Area’s finest security firms, not to mention one of its best employers.

Our employees are the backbone of our business. They are the reason we’ve achieved success and continued to grow. As our expansion continues and as we complete our transition to being a full-service integration solutions company, we’re finding creative new ways to celebrate our workforce. That’s why we’re making new investments in employee training and career development, optimizing our technology offering and integrating new globally-sourced security solutions.

None of that would be possible without our dedicated team leading the way.

Headwinds for Ontario’s business community

The unfortunate aspect of Ontario’s minimum wage increase is that it will force organizations such as ours to adjust client rates to account for a measure that will undoubtedly have a negative bottom-line impact on not only our company, but thousands of others across the province.

Do workers in Ontario deserve a modernized Employment Standards Act that better serves their interests at a time when external factors such as globalization and automation potentially threaten their livelihoods? Absolutely. Do they deserve an even playing field that allows workers to better market their skills and services and negotiate higher wages with employers? Without a doubt.

But the reality is that Bill 148 goes too far, too fast.

Good intentions, unintended (job-killing) consequences

A recent Fraser Institute study confirms the harsh impact the minimum wage increase will have on SMEs, particularly those outside of the GTA. Researchers found that because more organizations outside of major centres such as Toronto rely on workers who earn at or near the minimum wage, smaller towns and cities will struggle to keep pace with the increase. The study’s authors predict that employers will be forced to lay off workers or resort to further automation to accommodate the increase.

Indeed, even the Financial Accountability Office of Ontario predicted that the hike would cost Ontario approximately 50,000 jobs, largely concentrated among teens and young adults. “The government’s proposal to raise Ontario’s general minimum wage to $15 per hour will dramatically increase the number of minimum wage workers from just over 500,000 currently to 1.6 million in 2019,” the report stated, further underscoring the unintended consequences that are likely to emerge from the government’s otherwise well-intentioned decision.

Fully committed to customer service excellence

Small and medium-sized business across the province simply can’t absorb the cost of these legislative changes without cutting staff, increasing prices or curbing further expansion—maybe all of the above. In our case, we will not compromise our service standard by slashing headcount or taking any action that could affect the safety and security of the properties and assets we protect. Service excellence is our top priority, and on that front, we simply will not waiver.

But the minimum wage increase will prove challenging for our business going forward. With a proactive management approach and smart decision-making, we’ll find ways to thrive under this new minimum-wage structure. I worry that others may not be as lucky.

Winston Stewart, founder

Wincon Security