TVO: Five things business wants from the Ontario government

Bill 148 — the Fair Workplaces, Better Jobs Act — has Ontario businesses worried. Here’s what they want the Liberals to do about it

  Karl Baldauf of the Ontario Chamber of Commerce appeared on The Agenda in June to discuss labour reform.

Karl Baldauf of the Ontario Chamber of Commerce appeared on The Agenda in June to discuss labour reform.

Ontario’s standing committee on finance and economic affairs criss-crossed the province in July, hearing out labour groups, businesses, and other interested parties on Bill 148 — the Fair Workplaces, Better Jobs Act. The bill includes a $15 minimum wage, more personal leave and vacation time, and measures to prevent employers from changing or cancelling shifts on less than 48 hours’ notice.

But some businesses are wondering how they’ll manage to deal with the changes. “Bill 148 is ill-advised,” says Karl Baldauf, vice-president of policy and government relations at the Ontario Chamber of Commerce. “The government has not provided for the kind of economic analysis that you would expect from a piece of legislation that’s going to have such profound impact as quick as it will on the Ontario economy.”

Earlier this summer, we asked labour groups what they wanted the government to add to Bill 148. So what do businesses want the government to do?

Conduct an economic analysis of the proposed changes

The OCC says the government failed to analyze the potential economic impact of Bill 148’s proposed reforms. “Such broad reforms must be evidence-based,” the group wrote in a letter to Premier Kathleen Wynne in May. “Workplace law reform conducted in absence of an economic risk assessment will discourage investment and compromise the competitiveness of businesses in the province which are already struggling to maintain profitability amidst rising input costs.”

Asked whether the government had, in fact, conducted an analysis, Michael Speers, spokesperson for Labour Minister Kevin Flynn, said, “An expert economic analysis from Morley Gunderson, professor in the Department of Economics and the Centre for Industrial Relations and Human Resources at the University of Toronto, was done as part of the Changing Workplaces Review. His analysis, coupled with a broad range of earlier expert reports analyzing the minimum wage, show that increasing it to $15 is good for workers and can be good for business, too.”

Pressed as to whether the government had considered the impact of Bill 148 on the economy as a whole, Speers stated only that Gunderson’s work “encompassed a wide variety of topics related to employment standards and labour relations, and were utilized by the authors of the CWR and also Bill 148.”

The OCC commissioned a report of its own, published Monday, from the Canadian Centre for Economic Analysis. It found that the new legislation would put 185,000 Ontarians at risk of losing their jobs — that’s 2.4 per cent of the province’s working population. It also predicted 83 per cent of those job losses would affect workers 25 and older. The sectors at the greatest risk, the report states, are manufacturing, accommodation and food services, retail, and wholesale trades.

(Responding to the report Monday afternoon at the Association of Municipalities of Ontario conference in Ottawa, Flynn said, "What isn’t being discussed ... is the huge advantage to 30 per cent of the population of Ontario receiving increased spending. And this goes right back into the economy. This doesn’t go into trust funds. This is an injection into the economy.")

Raise the minimum wage slowly, and make it location-dependent

Bill 148 calls for the minimum wage — currently $11.40 — to hit $14 by January 1, 2018, and $15 the following year.

“We’re increasing [the minimum wage] by 32 per cent in 18 months,” says Baldauf, who adds that measuring the impact of the hike will be difficult. “Such a swift increase is unprecedented, and we cannot find other jurisdictions that have moved this fast.”

Some employers recommend instead raising the minimum wage more slowly, over the course of five or six years, as California and New York have done. “This gives employers time to adjust,” Brian Kingston, vice-president of international and fiscal issues at the Business Council of Canada, told Ontario’s standing committee on finance and economic affairs in mid-July.

Kingston also argued the minimum wage should vary based on location. In New York, he said, “state legislators there understood that local economic conditions in Manhattan aren’t the same as in Rochester. So, while the minimum wage is going to rise to $15 by 2019 in New York, in the suburbs it won’t reach that level until 2021, and in the rest of the state the wage will go up to $12.50. So it depends on regional economic conditions.”

(Disclosure: the reporter worked for the Business Council of Canada for four years, ending in 2015.)

Maintain the secret ballot system for certifying unions

In Ontario, union certification is a two-step process: first, interested workers sign cards allowing the union to register with the province’s labour relations board; then, about a week later, employees vote on whether to unionize. Originally, only the first step was necessary (as is still the case in the construction industry). Bill 148 will return three industries to the one-step system: temporary help agencies, building services, and home-care and community services (three particularly precarious sectors).

Card-based certification allows unions to certify “on the basis of cards collected, without a show of hands, without a vote — which is what we have now, a secret ballot vote — and without the opportunity for a discussion of the merits,” David Law, a partner at Gowling WLG LLP, told the committee. “[The voting system] provides employers, on average, about three days to give a controlled message to their workforce about why they might not want to certify a union before a secret ballot vote.”

(Labour groups argue the interval between the card signing and the vote merely gives businesses the opportunity to convince employees not to unionize.)

And, Law points out, it’s difficult to de-certify a union once it’s in place: “A trade union is, as far as I can tell, the only provider of a service that I can think of that — after it gets the job, if you will — is not subject to review. The rest of us can get fired or hired.”

Exempt some industries from the scheduling rule

Bill 148 stipulates that workers must be paid three hours’ wages if their employer changes or cancels their shift on less than 48 hours’ notice. But the tourism, manufacturing, and construction industries argue the rule is too restrictive and doesn’t account for the unpredictable nature of their businesses.“We don’t want our unionized employers … to be punished for things that they have no control over,” Mark Lewis, general counsel for the Carpenters’ District Council of Ontario, told the standing committee. “For example, if there’s an accident on a job site that has nothing to do with one of our employers … the entire site might be shut down; everybody’s workforce gets sent home.”

Lewis notes that there are already exceptions in the bill for bad weather and power outages. He wants the government to make exceptions for other “reasonable causes beyond the employer’s control,” and to allow collective agreements to take precedence in such situations.

Dianne Hounsome, president of Resorts of Ontario and owner of Bayview Wildwood Resort in Port Stanton told the committee her industry is “very dependent on last-minute bookings. We’ll project ahead, but if the weather all of a sudden decides that it’s not going to be a great weekend coming up, then all of those last-minute bookings do not come forward.”

Canadian Manufacturers and Exporters also took issue with the scheduling provision, stating in a release that the change would make Ontario manufacturers less nimble than their international competitors.”

Cut corporate taxes

Some businesses want the Ontario government to cut the corporate tax rate to 10 per cent from 11.5 per cent, as it had originally promised to do by 2013.

Kingston says energy prices, the cap-and-trade system, and now Bill 148, though well-intended, have increased the cost of doing business and have made Ontario less competitive as an investment destination.

“One simple way that would benefit all businesses is to continue with the tax cut to 10 per cent that was committed to by this government once the budget was balanced. The budget is now balanced. So that would be a natural, fair, equitable way, across the business sector.”

Updated with files from John Michael McGrath.