Alberta's New Democrats are pushing forward with plans to hike the province's minimum wage to $15 per hour by 2018, despite warnings from businesses that the increase will lead to higher prices on store shelves and possible layoffs.
The first increase will come on Oct. 1 when Alberta vaults from Canada's lowest minimum wage to the second highest among provinces. Currently tied with neighbouring Saskatchewan at $10.20 per hour, Alberta's minimum wage will rise to $11.20. The province will also phase out the lower minimum wage for liquor servers over the next two years.
On Monday, Labour Minister Lori Sigurdson was categorical that the new NDP government would not be swayed from its goal of increasing the minimum wage to $15 per hour by 2018. However, she could not provide details on what future increases are planned between October and 2018.
"By keeping Alberta's minimum wage as low as possible, many people and their families had no choice but to resort to food banks and social support programs to make ends meet," she said. "Paying people a decent minimum wage will translate into a better life."
The New Democrats had discussed increasing the wage more quickly according to Ms. Sigurdson, but decided to go slower. She dismissed warnings of mass layoffs due to the 47 per cent hike in the minimum wage over three years as "fearmongering."
"We believe in social justice and we know that Alberta has the greatest inequality of any province in Canada, so anything we can do to raise the floor is based on our values," she said.
Ken Kobly, president of the Alberta Chambers of Commerce, said that while he was relieved the government didn't push through an immediate $2 hike in the minimum wage, the rapid increase will amount to an "experiment" conducted by the province.
"Businesses are very anxious," he said. "The experiment is where we are going to be anywhere from 40 to 50 per cent – depending on what the other provinces doing – over the other provinces."
The decision to push for an increase to $15 was as much about politics as economics, Ms. Sigurdson said. When asked how the government had come to $15 per hour as its target, her office responded that the wage represented the median from a number of studies published by groups locating Alberta's living wage in a range from $13 to $17 per hour.
The province's opposition parties have questioned the government's thinking.
"Many Alberta small businesses, service and community organizations will have to cut their hours of operation or pass on their higher costs of doing business to their clients," wrote interim Progressive Conservative leader Ric McIver in a statement.
"We have continued to press the government for answers about how a $15 an hour minimum wage is going to improve our economy. It seems to be a number pulled out of the air with no basis in fact."
Since the NDP first announced its intention to hike the minimum wage, the debate in the provincial legislature has been dominated by duelling research on the expected impact of the increase. On Monday, representatives from groups in favour of the hike and against it conceded that there was little clarity in the studies.
"Depending on which economists you listen to, there will be a big difference in the impact," said Mr. Kobly.
Premier Rachel Notley has previously said that more jobs could be created as a result of the hike, while the Canadian Federation of Independent Business has warned that as many as 183,000 jobs could be lost or never created in the province.
Nearly 62 per cent of minimum wage earners are female, making the fight for a higher minimum wage a women's issue, according to Sue Tomney, CEO of the Calgary YWCA. "An adequate income is critical for women to live with dignity and maintain their wellness."
Her non-profit pays a living wage of at least $16.14 per hour to each of its 300 employees.
Restaurant operators could be some of the hardest hit businesses due to the decision to end the lower wage for liquor servers – in theory those workers are supposed to be compensated with higher tips.
Mark von Schellwitz, vice-president of Restaurants Canada, said that the average restaurant with 25 employees would cut three jobs as a result of the higher wages.
"This is going to end up hurting the very people it's supposed to help. It'll put those entry level jobs at risk and hurt them in terms of purchasing power," he said. "The timing of this is very bad."
List of minimum wage rates across Canada
- British Columbia: Currently $10.25 for most workers and $9 for those serving alcohol; increasing to $10.45 and $9.20, respectively, in September.
- Alberta: $11.20 on Oct. 1. Liquor server minimum wage to rise to $10.70 from $9.20 per hour.
- Saskatchewan: $10.20.
- Manitoba: $10.70.
- Ontario: Currently $11; $10.30 for students under 18 and $9.55 for workers serving alcohol; increases to $11.25, $10.55 and $9.80, respectively, in October.
- Quebec: $10.55 or $9.05 for workers who receive tips.
- New Brunswick: $10.30.
- Nova Scotia: $10.60 an hour for most workers and $10.10 for “inexperienced” workers.
- Prince Edward Island: $10.35, increasing to $10.50 in July.
- Newfoundland and Labrador: $10.25, increasing to $10.50 in October.
- Yukon: $10.86.
- Northwest Territories: $12.50.
- Nunavut: $11.
The Canadian Press