VICTORIA, BC: On June 1, 2023, B.C.’s lowest-paid workers will get a pay raise with the general minimum wage increasing from $15.65 to $16.75 an hour.
“The 6.9% increase in minimum wage rates reflects B.C.͛s average annual inflation rate in 2022. The adjustment reflects government’s commitment to tie annual minimum wage increases to inflation. The same increase will apply to wages for residential caretakers, live-in home-support workers and camp leaders. On Jan. 1, 2024, piece rates for 15 hand-harvested crops will also increase by 6.9%,” said Harry Bains, Minister of Labour.
The increase will positively affect approximately 150,000 workers who earn less than $16.75. Many are food service staff, grocery store workers, retail workers and others who were essential workers during the pandemic.
Overall, B.C.͛s minimum wage has increased from one of the lowest in the country to one of the highest. The minimum wage was $10.45 per hour in 2015.
The 6.9% increase to the minimum wage puts small businesses in a difficult position because they don’t have the ability to absorb higher costs. According to Canadian Federation of Independent Business (CFIB), “over half of the province’s small businesses are still experiencing below-normal sales and are carrying an average of $85,000 in pandemic-related debt.”
“Cost pressures from the government are at an all-time high, including employer-paid sick days, the Employer Health Tax, WorkSafeBC premiums, skyrocketing property taxes, rising carbon taxes, and a new statutory holiday. This new 6.9% increase for a small business with 10 minimum wage employees will add nearly $20,000 of additional payroll costs,” CFIB said in a statement.
While businesses understand the provincial government’s efforts to keep up with the rising cost of living but urged the Province to provide a corresponding offset for businesses in navigating this increase in labour costs.
It’s time the BC government acts to help businesses manage these costs by increasing the Employer Health Tax’s payroll exemption threshold, balancing the cost burden of paid sick days, and rebating some of WorkSafeBC’s $3.4 billion surplus back to employers. To address rising affordability challenges without imposing more costs on small businesses, the BC government can use other policy tools in its toolkit. For example, they can raise the province’s basic personal amount, which is currently the lowest in Western Canada.
“A 6.9% increase to labour costs is a large burden with less than 60 days notice. Most employers I speak to are in favour of regular increases to the minimum wage, but more time and a graduated approach would help them adjust accordingly” said Shaena Furlong, President and CEO of the Chamber of Commerce.
Furlong emphasizes the challenge this sudden and significant minimum wage increase presents to local employers. “Many employers consider it important to set their base pay above the mandated minimum wage and will be adjusting their own pay scales accordingly to stay competitive in this tight labour market. Furthermore, for some businesses, this increase may put them over the threshold for the Employers Health Tax, meaning additional costs.”
“The Surrey Board of Trade is disappointed that such a significant minimum wage increase was announced today, leading to further unsustainable cost increases for businesses,” said Anita Huberman, President & CEO, Surrey Board of Trade. “Such a significant increase in minimum wage should have been discussed last year with the business community, especially in the face of other unprecedented increases in taxes and fees from other levels of government.”
“It is imperative that the BC Government focus on reducing costs to businesses by committing to convening a commission to review taxes and red tape impacting businesses.”
