Result of Ontario’s minimum wage hike? Job losses, says FAO report

Ontario’s proposed minimum wage hike could result in more than 50,000 job losses, says the Financial Accountability Office (FAO) of Ontario in a new report.

As part of Bill 148, the Fair Workplaces, Better Jobs Act, 2017, says the FAO, the government proposed in July to raise Ontario’s general minimum wage from its current rate of $11.40 per hour to $14 per hour on January 1, 2018 and $15 per hour the following year.

The problem, says Financial Accountability Officer Stephen LeClair, is that could result in job losses that are concentrated among teens and young adults. As the report notes, the minimum wage increase might provide greater incentive for businesses to “reduce costs more aggressively.”

The report says the new policy would increase the number of minimum wage workers in Ontario from “just over 500,000 to 1.6 million in 2019.”

It could “also lead to ‘spillover’ effects that would result in higher wages for workers earning just above the new minimum wage,” the report adds, citing FAO assumptions and a paper from 2000 called The Effects of Minimum Wages Throughout the Wage Distribution.

Groups representing both small and large businesses across Ontario have said the minimum wage increase would lead to layoffs.

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Staff, with files from The Canadian Press

The Canadian Press is a national news agency headquartered in Toronto and founded in 1917.