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Protesters demonstrate outside the Tim Hortons coffee shop on Division St. in Cobourg, Ont., in January 2018.Fred Lum/the Globe and Mail

Ontario Premier Doug Ford’s government is increasing the province’s minimum wage to $15 an hour on Jan. 1, in a policy reversal that earned it praise from union leaders but alienated some business groups.

Calling low-wage workers in factories and grocery stores the “unsung heroes” of the pandemic, Mr. Ford made the announcement on Tuesday outside a Unifor local office in Milton, Ont., west of Toronto.

He was flanked by Unifor national president Jerry Dias and the head of the Ontario Public Service Employees Union (OPSEU), Warren (Smokey) Thomas – an unusual speakers’ list for the traditionally business-friendly Progressive Conservative government.

The minimum-wage hike is a major reversal for Mr. Ford. In 2018, he condemned a bill passed by the preceding Liberal government that would have granted the province’s lowest-paid workers $15 an hour as a “job-killer,” quickly scrapping it along with provisions guaranteeing paid sick days and other worker protections.

The reinstated wage hike is the latest in a series of moves that Mr. Ford’s Labour Minister, Monte McNaughton, has made in recent days aimed at lower-paid workers, including a crackdown on temp agencies and legislation guaranteeing delivery drivers access to washrooms.

The change announced on Tuesday means those earning minimum wage will see a boost to $15 an hour from $14.35, starting next year. That puts Ontario behind B.C., where minimum wage is $15.20, and on par with Alberta, where it is also $15. It is lower in other provinces, including Quebec.

Ontario’s increase will also apply to the special $12.55 liquor servers’ minimum wage now paid to bartenders and wait staff who earn tips. Lower rates for students under 18 and some other groups such as wilderness guides will remain but see increases.

More details are expected to be revealed in Thursday’s fall economic update from the government.

Asked why he now supports the very minimum wage increase he scrapped back in 2018, Mr. Ford primarily blamed the pandemic, as well as other factors such as the federal carbon tax.

“That’s like comparing apples and oranges,” the Premier said of his decision. “We didn’t have ... a worldwide pandemic [back then]. Everyone’s been facing a challenge over the last 20 months.”

Mr. Dias called the announcement an important day for Ontario’s 760,000 minimum-wage earners, as well as tens of thousands of his union members who work in grocery stores whose contracts guarantee them a paycheque that is a certain amount higher than minimum wage, meaning they will also see an increase.

But he was frank that he has been frustrated with the government on other issues, such as its 1-per-cent wage-hike caps for nurses and other public servants and its refusal to bring in permanent paid sick days.

Mr. Dias called the called the $15 minimum wage a good start. But he said he would push for further increases to make it a “living wage,” which is as high as $22 an hour in Toronto.

Mr. Thomas, who said 15,000 of his members make minimum wage, said while he has had “some bumps” with Mr. Ford’s government, the Premier reached out to him at the onset of the pandemic and offered to put partisanship aside. Mr. Thomas said the government was “listening and and actually doing some very positive things for working people.”

Some of the Progressive Conservatives’ traditional allies in the business world criticized the sudden minimum-wage hike, saying they were not consulted and now have just two months to adjust. The Canadian Federation of Independent Business said the increase comes at the “worst possible time,” with many of its members still losing money and struggling with debt.

Rocco Rossi, president and CEO of the Ontario Chamber of Commerce, urged the government to reconsider its timeline for the hike and look at offering more aid to businesses, warning of the potential for job losses or rising consumer costs. But the Retail Council of Canada noted that the $15 minimum wage hike, at 4.5 per cent, was not far off from the rate of inflation – unlike the previous Liberal government’s larger increases.

Many struggling restaurants will be reeling from the surprise news they must hike paycheques for liquor servers by $2.45 an hour – or almost 20 per cent – in just two months, said John Sinopoli, owner of Toronto’s Ascari Hospitality Group and the founder of advocacy group

“It’s unfortunate that they just kind of sprung it on us,” Mr. Sinopoli said, arguing the province should do more to help the industry recover, such as cut Ontario’s provincially controlled wholesale prices for alcohol.

The opposition at Queen’s Park dismissed the move as a ploy ahead of next June’s election. Opposition NDP Leader Andrea Horwath, who had previously called for a $15 minimum wage, said that workers deserved at least $17, given the Mr. Ford’s delay to the original increase three years ago.

“I am so sick and tired of watching Liberals and Conservatives use minimum-wage workers as political pawns on the eve of an election where they’re concerned about losing power,” Ms. Horwath said.

Liberal Leader Steven Del Duca concurred, accusing the Premier on Tuesday of being desperate for votes.

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