22 September 2020
Dan Mills, Deputy Minister
Department of Post-Secondary Education, Training and Labour
Chestnut Complex
P. O. Box 6000
Fredericton, NB E3B 5H1
Via email: labour-travail@gnb.ca
Re: Minimum Wage Consultation
Dear Mr Mills:
I am writing today in response to your request for feedback on the minimum wage rate in New Brunswick, as part of the 2020 statutory review of minimum wage launched on 31 July 2020. The chamber, our board of directors, and members thank you for the opportunity to give feedback and contribute to the discussion.
As per our 2018 minimum wage consultation submission, the Fredericton Chamber of Commerce and our members support the system currently in place – namely, that the New Brunswick minimum wage be adjusted annually based on the consumer price index (hereinafter “CPI”). This provides both balance and predictability to employers and workers alike. The minimum wage rises according to our member’s ability to pay —as the economy grows.
Correspondingly, a minimum wage adjusted with the CPI is beneficial to employees, ensuring that wages adjust to the changes in prices of goods. Adjusting for inflation is also beneficial, because changes in wages are produced gradually and are predictable. It is extremely important for our members to know of a change for a minimum wage (or any ongoing cost) well in advance — so that they can adjust their business plan accordingly.
This is particularly important now that businesses are dealing with the ongoing consequences of the COVID-19 pandemic. Businesses have been hard hit and must reconcile both these expected and unexpected costs with their financial plans; as a result, the costs of goods and services have risen, and in some cases, employers have had to limit or reduce their staffing. These challenges, in combination with a slow economy, place additional stress on the already complex and multifaceted endeavor of running a business.
Changes in consumer behavior, the supply chain, among others, will affect businesses not only now, but in the long term. It is a crucial time to not increase costs to businesses substantially and risk their survival after the pandemic. Over the past few years, businesses have seen increases in personal income tax rates, gas and diesel tax rates, a new statutory holiday, HST, corporate tax, WorkSafeNB premiums, a carbon tax and a generational hike to Canada Pension Plan premiums. Burdening businesses further – beyond CPI-based increases would be a major blow to the competitiveness, and in some cases existence, of New Brunswick businesses.
Notably, an annual-adjusted, CPI-based system is currently being employed in Nova Scotia, Newfoundland & Labrador, as well as other Canadian provinces.
In summary, we submit that minimum wage should not be looked at in a vacuum, but should be considered with the perspective of:
- the total cost burden on employers and their ability to absorb an increase. Employers must always consider their overall cost burden and every increase – in particular those not predicted – will force some to make tough cost-controlling decision such as reducing hours or employees – hurting workers, employers and the economy;
- the current system is currently providing predictability and reasonable increases; and
- the efforts for regulatory alignment amongst the Atlantic provinces.
We therefore submit that no changes should be made to the current process of establishing the minimum wage in New Brunswick.
Sincerely,
Krista Ross
CEO, Fredericton Chamber of Commerce
