Evidence of meeting #44 for Finance in the 43rd Parliament, 2nd Session. (The original version is on Parliament’s site, as are the minutes.) The winning word was program.
A recording is available from Parliament.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Thank you very much.
Are there any provisions for making the rise in the minimum wage quicker than the six months after royal assent?
Director, Workplace Information and Research Division, Labour Program, Department of Employment and Social Development
No. Right now in the legislation, the $15 minimum wage would come into force six months after royal assent, and then it would be adjusted in April of the year after the provisions come into force.
NDP
Peter Julian NDP New Westminster—Burnaby, BC
Thank you for that.
I have just a brief comment, Mr. Chair, if you'll permit me. That was in the NDP's election platform for the last two elections, so it's good to see it there.
Liberal
The Chair Liberal Wayne Easter
I will not mention what other party's platform it was in.
Ms. Jansen.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
I was wondering, first, if I could get a list again of who you are saying this is applying to—which jobs? I know you're saying it's federally regulated private companies, but what was the list that you gave us?
Director, Workplace Information and Research Division, Labour Program, Department of Employment and Social Development
What I can say is that part III of the Canada Labour Code applies to federally regulated companies, and that includes industries such as banking, telecommunications, interprovincial and international transport and federal Crown corporations. I could also just add that I mentioned that 26,200 employees making less than $15 per hour would likely be impacted by this change. They work in industries like road transportation, non-road transportation, postal and courier, banking, telecom and broadcasting.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
You're suggesting that this minimum wage is tacked closely onto the inflation rate. What if inflation becomes exorbitant over the next little while under the impact of COVID?
Director, Workplace Information and Research Division, Labour Program, Department of Employment and Social Development
As you mentioned, the new minimum wage will be indexed based on the CPI, in April of the year after these provisions come into force. There is a provision in the amendment whereby if the CPI goes down there would be no adjustment, so the minimum wage couldn't go down, but there is no provision in these amendments related to exorbitant inflation.
Conservative
Tamara Jansen Conservative Cloverdale—Langley City, BC
If we would have, say, 10% inflation, then the wages would go up that much, and they would never come back down from that.
Director, Workplace Information and Research Division, Labour Program, Department of Employment and Social Development
At the moment, the way the legislation is drafted, there's no provision to not have an adjustment, were inflation to be high.
Conservative
Ted Falk Conservative Provencher, MB
Thank you, Mr. Chair.
Your team has obviously done a SWOT analysis on this program. Do you have any numbers at all as to how many of those 26,000 jobs would no longer exist if this happens?
Director, Workplace Information and Research Division, Labour Program, Department of Employment and Social Development
I can answer that question for you if you'll bear with me.
It is possible that there could be some disemployment effects related to putting in place a federal minimum wage, which would have a negative impact on either employment or on hours worked, especially potentially for those who are lower skilled or who have less experience, maybe for young people, but there's growing international research suggesting that the disemployment effects such as these are not as high as previously thought.
Depending on assumptions, looking at different elasticity rates that my team looked at, our estimates are that it could range anywhere from say 162 to maybe to 800 jobs that could be impacted by disemployment effects where there might be a reduction in hours, or other impacts on employment as a result of this.
Conservative
Ted Falk Conservative Provencher, MB
Thank you.
You've probably also heard the adage that a rising tide lifts all boats, and if we're going to increase the bottom end of the wage structure, everything else will increase proportionateley. At the end of the day, there won't be a net benefit because costs are going to rise. This is actually going to fuel inflation. What is your study on that showing you as a result?
Director, Workplace Information and Research Division, Labour Program, Department of Employment and Social Development
I think what you're asking about is spillover effects from this minimum wage, and it is true that it is possible that there could be some spillover effects like wage adjustments for employees who are making $15 or slightly above $15. Employers might do this in order to retain or attract employees. What I would say is that the size of the spillover effect or that impact is somewhat uncertain, and it's kind of difficult to estimate, but it's not likely to impact anyone making more than about $2 over $15 or $2 over that minimum wage rate.
Liberal
Liberal
Julie Dzerowicz Liberal Davenport, ON
Thank you, Mr. Chair.
Mr. Charter, thank you for your presentation. I have four tiny questions for you. They're so small I'm sure you'll be able to respond very quickly.
You had mentioned there are 26,200 federally regulated employees who would benefit. How many in total do we actually have? How big is the bucket? Could you start off with that?
Director, Workplace Information and Research Division, Labour Program, Department of Employment and Social Development
Certainly. I'm just scrolling down my list. It's roughly 919,900 employees.
Liberal
Julie Dzerowicz Liberal Davenport, ON
Thank you.
In terms of the cost-of-living increase, Ms. Jansen had asked about inflation. Hopefully this never gets to 10%, but the way the legislation is written the increase would go to 10%. How is it different? As members of Parliament, we actually get an automatic cost-of-living adjustment every year as well. Is it written differently, or is it the same?
Director, Workplace Information and Research Division, Labour Program, Department of Employment and Social Development
The way it's written in the amendments, the minimum wage will be set at $15 per hour, and then on April 1 the year after these provisions come into force, the minimum wage will be adjusted. It will be based on the increase in Statistics Canada's consumer price index for that year. Whatever percentage that increase was for the previous year, that will be the rate at which the minimum wage is adjusted upwards.
Liberal
Julie Dzerowicz Liberal Davenport, ON
Do you know if that's the same as how it's written for members of Parliament in our annual increases?
Director, Workplace Information and Research Division, Labour Program, Department of Employment and Social Development
I'm afraid I'm not aware of how the increases for members of Parliament are calculated.
Liberal
Julie Dzerowicz Liberal Davenport, ON
Thank you.
What do you think the impact would be? I actually agree with this $15 minimum wage, which to Mr. Julian's comment was a promise in our Liberal platform and I'm glad that the NDP has followed us along.
What do you think the impact could be on other provinces that might have a minimum wage below $15?
Director, Workplace Information and Research Division, Labour Program, Department of Employment and Social Development
What I can say to that is, of course, that these changes will put in place a federal minimum wage. They're amending part III of the Canada Labour Code, which applies just to the federally regulated private sectors, and the provinces and territories will continue to set their own minimum wage rates. I can't speak to whether the provinces or territories might choose to raise their rate or not, but what I can tell you is that right now the rates in the provinces are between $11.45 and $16 per hour and that this federal rate will be equal to or on par with all jurisdictions with the exception of Nunavut, whose rate is set at $16 per hour.
As I mentioned in my remarks, these provisions include a provision whereby if the provincial or territorial rate is higher, that rate will prevail. There's also a trend in provinces and territories to automatically adjust their minimum wage rates based on indexing formulae. Quite a number of provinces and territories already regularly increase their minimum wage rates based on either the provincial or the federal consumer price index.