With the PEI inflation rate. the highest in Canada, what should happen to the minimum wage?

Islanders have until Thursday, July 14 to submit submissions for the Employment Standards Commission’s minimum wage review.

The council makes recommendations to the province on changes to the minimum wage based on public input.

This year, the review comes at a pivotal time for the province’s economy, as energy prices soar and push the inflation rate to 11.1% in May, the highest rate raised in the country.

Although the P.E.I. increased by 70 cents on April 1 to reach $13.70 per hour, this 5.4% increase was not enough to keep up with inflation. In real terms, $13.70 in May this year had the same value as $12.33 in May 2021.

While business groups say they would be fine with a moderate wage increase, they say they fear that if the province raises the minimum wage too much right now, it could jeopardize a post-pandemic economic recovery.

“I don’t think the small business community should shoulder the burden [of inflation] alone,” said Robert Godfrey, CEO of the Greater Charlottetown Area Chamber of Commerce.

“We are all trying to rebuild,” he said.

“We’re trying to take advantage of the strong tourist season, we’re trying to leverage what we can to meet what has largely been three years of challenges. So to have a substantial increase in the minimum wage would be very detrimental.”

According to Statistics Canada, the average weekly earnings in PEI. for the month of April was $968.92 per week, 17% below the national average. Assuming a 40-hour work week, that works out to about $24.22 per hour.

In the chamber’s submission to the Employee Standards Council, it recommends raising the province’s basic personal amount instead of the minimum wage to bring it in line with the national average of $13,092.

“We charge low-income Islanders a higher rate than anywhere else in Atlantic Canada. And our basic personal amount. I mean, I tip my hat to the government this year, they honored a campaign pledge to raise it to $12,000. But they are still well below the Canadian average. »

But Ann Wheatley, program coordinator at the Cooper Institute, said doing something like this would be a “regressive move” because it would benefit higher-income people more while cutting funds that would go to public services.

The institute usually submits a submission to the Employment Standards Board through the PEI Living Income Task Force, a network of community organizations.

“Obviously the minimum wage has to go up. I think it has to sort of strive for a living wage,” she said.

“There was an amendment [to the Employment Standards Act] in 2019 which talked about the considerations that should go into setting the minimum wage. That’s what the cost of living increases have been since the last time the salary was determined. And now we know…in 2022, how much the costs of housing, transportation, food, everything have increased so much.”

“A Decent Life”

A report by the Canadian Center for Policy Alternatives determined that in 2020, the living wage for someone living in Charlottetown was $19.30 per hour, well above the current minimum wage.

Wheatley also pointed to a Statistics Canada report that showed the proportion of employees earning minimum wage in Prince Edward Island increased from 4.9% to 7.5% between 1998 and 2018. Nationally, it rose from 5.2 to 10.4% over the same period.

“Minimum wage workers are not a huge sector of the workforce, but they are important,” she said.

“We saw during the pandemic… There were workers who were earning, if not the minimum, just above the minimum wage, selling our groceries and doing the work that can really keep us all healthy,” said said Wheatley.

“So I think if employers can offer better salaries to attract employees, they could also offer better salaries just to keep employees and keep them in positions where they can afford to live decently.”

Businesses need predictability, says Retail Council

Jim Cormier, Atlantic director of the Retail Federation of Canada, said his organization is not opposed to raising the minimum wage. But he said salary increases must be predictable.

He said the province should commit through legislation to raise the minimum wage to keep up with inflation, as is the case in the rest of the Maritimes.

He also cited Nova Scotia’s schedule for minimum wage hikes as an example to follow. This province will gradually increase the minimum wage until it reaches $15 an hour in 2024.

“We understand that they [minimum wage hikes] Need to be done. But we ask that they be done responsibly,” Cormier said.

“If you know the process will generally be the same year-over-year, you can plan ahead.”

But Cormier said members, especially independent retailers, worry that if payroll costs rise too much, they may have to cut hours, retain new hires or even raise prices.

“A fragile economy”

“Inflation is going up, taxes never go down, your energy costs are going up, your transportation costs are obviously skyrocketing. Most retail products have to be trucked into a province like PEI, so all those costs keep going up,” he said.

“We are still in a fragile economy.”

Wheatley said as things stand there would definitely have to be an increase to keep up with inflation. But that a “fairly substantial increase” and a plan for additional increases are still needed to bring the minimum wage above what would be considered poverty income.

“[Workers’] purchasing power is increased by supporting local businesses that buy things locally. So the money is not really coming out of our economy,” she said. “Bringing wages in general to decent incomes could benefit not only the workers, which is essential, but also the companies that employ them. .”

The deadline for submission is July 14.