The Greater Charlottetown Area Chamber of Commerce acknowledged the positive step by the provincial government Thursday concerning the timeliness of their announcement of the next increase to minimum wage, adding that more must be done to improve the fairness and predictability of the rate increases. The provincial government announced today that minimum wage will increase by 30 cents to $11.55 per hour on April 1, 2018.
During the Employment Standard’s Board annual Minimum Wage Rate Review in September, the Chamber made a series of recommendations to improve the minimum wage review process in PEI.
“It’s challenging for business owners to adapt to a wage increase which is why the Chamber has recommended at least six months notice on increases,” said Chamber President, Rory Francis. “Today’s notice is a positive step toward a more timely minimum wage process.”
The Chamber adds that opportunities remain to improve the predictability of the minimum wage process for both employers and employees. With this, the Chamber repeated the call to tie minimum wage increases to the previous year’s Consumer Price Index (CPI), which is an indicator of changes in consumer prices for goods and services in the province. Since October 2008, PEI’s minimum wage increased by 41%, while the increase to CPI was just over 12%. The government of Nova Scotia follows a CPI-based approach while the government of New Brunswick has committed to implementing this approach in 2018.
“The pace of minimum wage increases has far exceeded any increases to CPI,” said Francis.“This has put extra pressures on business owners who, due to competition, must maintain competitive prices despite the rising costs of doing business.”
To encourage fairness for employees and allow more dollars to circulate through the economy, the Chamber also reiterated their recommendation to increase PEI’s basic personal tax exemption which remains the lowest in Canada at $8,160. PEI is also one of the few provinces that do not automatically increase the basic personal tax exemption at the rate of inflation.
“The Chamber supports a living wage for Islanders and a minimum wage system that is predictable, transparent and fair. When the system lacks these elements, the financial impact is felt by workers in the forms of reduced staff hours or delayed hiring plans,” said Francis. “Decisions around minimum wage increases must support investment, economic growth, and job creation.”
The Greater Charlottetown Area Chamber of Commerce serves as the voice of business on economic issues for close to 1000 members, representing more than 18,000 employees in small, medium and large enterprises in the capital region.