Ontario to raise minimum wage to $15 an hour on Jan. 1

Ontario Premier Doug Ford announced Tuesday that the province will increase its minimum wage to $15 an hour starting Jan. 1.

The current minimum wage in the province is $14.35 an hour. The government will also eliminate the special minimum wage for liquor servers, boosting their pay from $12.55 an hour to $15 an hour, an increase of 19.5 per cent. Wages for students under 18, homeworkers, as well as hunting, fishing and wilderness guides will also rise.

The announcement marks a shift for the Ford government, which had cancelled a previously planned minimum wage hike introduced by Kathleen Wynne's Liberal government after the Progressive Conservatives were elected in 2018.

"For many Ontarians, wages haven't kept up with increasing cost of living, making it harder than ever to make ends meet," Ford said at a press conference Tuesday.

"Workers deserve to have more money in their pockets, because they earned it. They've worked hard and put in long hours. The least the government can do is ensure we're making life more affordable for them by putting real dollars in their pockets."

Ford was joined at the press conference by Unifor president Jerry Dias and Ontario Public Service Employees Union president Smokey Thomas, who expressed support for the increase.

"Today is an incredibly important day, not only for the 760,000 workers in Ontario that will see their minimum wage increase, but also for the tens of thousands of unionized workers in the grocery store industry who will see their wages increase as well as a result of clauses in their collective agreements that talk about minimum wage," Dias said.

"So do I think $15 is wonderful? The answer is no. But do I think it's a good start? The answer is yes."

Business groups react

Groups representing businesses in Ontario criticized the timing of the announcement, which comes as many companies continue to struggle and grapple with the impact of the COVID-19 pandemic.

Ontario Chamber of Commerce president Rocco Rossi released a statement saying the group was "disappointed in the lack of consultation on such a significant policy shift and departure from the scheduled wage increases."

"Many businesses are still grappling with the ongoing impacts of the pandemic, including cashflow constraints and the increased cost of doing business; this is no time to add to their costs," Rossi said.

"It is dangerous to bring in major new labour reforms without addressing or protecting against unintended consequences, such as job losses, rising consumer costs, service cuts, and economic hardship for businesses and our greater economy."

The president of the Canadian Federation of Independent Business (CFIB) says the group is concerned about the timing of the hike, which comes a few months after the minimum wage increased from $14.00 an hour to $14.35 an hour.

"Small firms are facing massive cost pressures on virtually every line of their budgets – fuel, insurance goods and services. They face a CPP hike on Jan. 1. A surprise additional minimum wage hike is about the last thing they need," CFIB president Dan Kelly said on Twitter.

"CFIB's major concern is the timing of this policy. Employers will see two minimum wage hikes within three months – one of which was unplanned and a surprise for their 2022 budgets. To date, there is no offsetting financial support to pay for this hike."

In a statement, the Retail Council of Canada (RCC) says the minimum wage hike is "a very different proposition" from what the previous Liberal government was proposing, and that the 4.5 per cent increase "is not vastly above the current rate of inflation."

"We know that today's announcement could be challenging for those retail businesses that are struggling to recover from the pandemic, and would have preferred more notice," the RCC said.

"But the key issue from our perspective has always been predictability and lead time so that businesses can plan accordingly."

Alicja Siekierska is a senior reporter at Yahoo Finance Canada. Follow her on Twitter @alicjawithaj.

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