Ontario’s new labour legislation, which included a spike in the minimum wage, is costing companies more money, but concerns that it would lead to a summer hiring freeze appear to be unwarranted, at least so far.
Employment agencies and student organizations say they haven’t noticed a pullback in summer hiring as a result of the changes, which also includes new calculations for statutory holiday pay and equal pay for casual, part-time, temporary and seasonal staff.
Ontario’s economy is on an upswing of late: Employment in Ontario increased by more than 10,000 jobs in March and the unemployment rate remained unchanged at 5.5 per cent, the lowest it has been since July, 2000. While some companies may be cutting back, job boards are still full of postings for part-time and casual summer work.
Timothy Lang, president and CEO of Youth Employment Services (YES), which offers career counselling and job placement services, was worried the Fair Workplaces, Better Jobs Act (Bill 148) would curtail summer hiring. “So far, we’ve seen no negative impact,” Mr. Lang says.
He says the number of summer job postings is similar to this time last year. He’ll have a better picture of the hiring trends as summer gets closer and more students finish the school year. “We’re hopeful that it will be like the current situation and there’s no impact,” Mr. Lang says.
In fact, he says there has been a slight increase in job openings in the province so far this year, which could be attributed to a stronger economy.
Ontario’s unemployment rate was 6 per cent in 2017 and is expected to drop to an average of 5.6 per cent in 2018, according to forecasts from CIBC World Markets. That compares with an unemployment rate of 6.3 per cent across Canada in 2017 and an expectation of 5.8 per cent in 2018. Both are below the average unemployment rate of 7 per cent in 2016 for Canada and 6.5 per cent in Ontario.
Ontario’s youth unemployment rate (those between the ages of 15 and 24) was 11.2 per cent in March, down from 14.4 per cent for the same month last year, according to Statistics Canada. That compares with a national youth unemployment rate of 10.9 per cent last month and 12.5 per cent in March, 2017.
“There is no question the labour market in Canada in general and Ontario, in particular, has been on fire,” says Benjamin Tal, deputy chief economist at CIBC World Markets.
Mr. Tal says it’s too soon to say what the impact of Bill 148 will be on overall employment levels in the province, but believes job creation in the near term should remain strong.
“Given where we are in the cycle and given the strong economic growth that we are seeing, this summer should be a relatively good summer for students,” Mr. Tal says. “I see no reasons whatsoever why employers would slow down [on hiring]. I am more concerned about next summer and the summer after that,” he says, citing global economic factors that could have a negative impact on Canada’s economy.
Nour Alideeb, chairperson of the Canadian Federation of Students in Ontario and a student majoring in economics at the University of Toronto, says she hasn’t noticed a slowdown in hiring for summer students. “We’re seeing jobs pop up everywhere, which is great,” she says.
It is possible that businesses are hiring more students because they are paid a lower wage. The student minimum wage, which applies to students 18 years old and younger who work 28 hours a week or fewer during the school year or work during a school break or summer holidays, rose to $13.15 an hour on Jan. 1 from $10.90. That compares with the general minimum wage, which went to $14 an hour from $11.60.
“It’s really unfair for individuals to be doing the exact same job and be getting paid less for it,” says Ms. Alideeb, whose organization is lobbying the government to pay students the same wage as their peers over the age of 18.
Mathias Memmel, president of the University of Toronto Students’ Union (UTSU), hasn’t heard concerns about students not able to find jobs for the summer, which he says could be in part because they’re in a large city with more opportunities.
That said, the UTSU will be hiring two or three fewer people this summer because of the higher wage costs. “We’re less able to hire than we were last summer, but that’s an acceptable trade-off,” Mr. Memmel says. “A summer job isn’t worth very much if it doesn’t pay a living wage.”
He says the UTSU has been gradually increasing its minimum wage in anticipation of the change. In 2016-17, it paid $13 an hour and increased it to $14 in the 2017-18 school year and will rise to $15 this summer for the 2018-19 school year.
Julie Kwiecinski, director of provincial affairs for Ontario at the Canadian Federation of Independent Business, says it’s too soon to tell the full impact that Ontario’s new labour law will have on summer hiring, with some changes still to take effect. These include new scheduling and on-call policies and a minimum wage hike to $15 from $14 ($14.10 from $13.15 for the student minimum wage), starting in 2019.
The CFIB surveyed about 2,900 small business owners in December about changes they made to prepare for a $15 minimum wage in 2019, and half said they had already reduced or eliminated plans to hire young workers.