Burnaby Board of Trade Statement on Provincial Minimum Wage Increase
LARGE INCREASE TO MINIMUM WAGE REQUIRES GOVERNMENT SUPPORT FOR BUSINESS IMPACTED BY RISING COSTS
Burnaby, April 5, 2023 – Today’s minimum wage announcement by the provincial government is a double-edged sword for small and medium-sized businesses struggling to weather the persistent rise in the cost of doing business. While the latest minimum wage increase, set to take effect on June 1, 2023, is tied to inflation, any predictability this might provide business is outweighed by the size of the increase due to inflation that is far beyond the normal target.
“Our businesses have long asked for predictability when it comes to minimum wage increases, but when the consumer price index is three times the standard target for inflation, the question begs to be asked, how sustainable are these increases for our businesses who are facing increasing cost pressures beyond their control?” asked Burnaby Board of Trade president & CEO Paul Holden. “When we see these increases far outside the norm, it’s imperative for the government to find other ways to help offset the cost this will increase will have on business.”
While today’s announcement will hit many businesses hard, the Burnaby Board of Trade is encouraged by the provincial government’s commitment to review the need for legislation to enshrine future minimum wage increases to CPI before next year’s increase. Given the current conditions facing our provincial economy, the Burnaby Board of Trade suggests future legislation includes the following:
- When CPI far exceed the standard target of inflation, usually defined by the Bank of Canada at 2%, a tax relief mechanism should kick in to offer financial support to SMEs, and
- Any minimum wage increases need to be announced with at least 6 months lead time before it goes into effect, similar to the Province of Ontario.
“Businesses will understand why the minimum wage increase is so large; many businesses are seeing those same increases on many of the inputs it takes to run their business,” says Holden. “And while business owners can appreciate the predictability the government is trying to implement here by tying these increases to inflation, the provincial government should be ready to support our business community with corresponding tax relief when runaway inflation hits 6% or higher.”
Overall, the government must strive to reduce the cost burden facing business that will allow our businesses to succeed in order to support our fellow citizen and their communities alike.
For more information, contact:
President & CEO
Burnaby Board of Trade