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Executive Summary

  • Issued: January 27, 2014
  • Content last reviewed: January 2014

The Ontario Minimum Wage Advisory Panel (MWAP or the Panel) was established by the Government of Ontario in June 2013 by an Order-in-Council (OIC), number 757/2013, to conduct an independent review of the process of setting the minimum wage in Ontario.

The Panel was given the following mandate:

"The Minimum Wage Advisory Panel will examine Ontario's current minimum wage policy and provide advice on an approach for determining the minimum wage in the future. It will examine the effectiveness of other jurisdictions' minimum wage models."

Public consultations were invited through multiple complementary channels of communication between the public and the Panel. In-person submissions were invited from the public in ten cities across the province. The Panel also invited the public to make submissions through its dedicated webpage, via email, by fax, by mail and through a toll-free phone number. Before reaching out to the public, a Consultation Paper on Ontario's Minimum Wage was posted on the Ministry of Labour's website. Members of the public were encouraged to address the questions in the Consultation Paper in their submissions to the Panel. The Panel heard from over four hundred individuals and organizations: 92 in-person presentations and 340 submissions received through all the channels described above (see Appendix 5a and 5b for details).

The Chair also met, by invitation, with two task groups set up by the Ministry of Labour whose work touches on the work of this Panel: The Vulnerable Workers Task Group and Small Business Task Group.

An in-house research team from the Ministry of Labour and the Ministry of Finance provided information on and analysis of the profile of minimum wage workers and trends in the minimum wage relative to other wages over time.

It should be noted that in the public feedback received by the Panel there was near universal agreement on making the process of revising minimum wages more transparent, predictable, fair and arms-length from government's own near-term concerns.

There was broad agreement within the Panel that the basis for revisions to the minimum wage should be easy to understand and administer. The Panel also identified strongly with the public input that the revision process should be predictable, fair, transparent and somewhat removed from government's near-term concerns. With these criteria in mind, our Panel has reached a consensus around four recommendations, listed below, which are offered for the Government's consideration.

  • Recommendation #1: Minimum wages should be revised annually by a percentage equal to the percent change in the Ontario Consumer Price Index.
  • Recommendation #2: Minimum wages should be revised annually, and a minimum of four months' notice of any wage change should be provided. The effective date of minimum wage changes should be April 1 of the following year. This would result in notification by December 1 of the previous year.
  • Recommendation #3: The Government should undertake a full review of the minimum wage rate and the revision process every five years. This review should be conducted by a panel of stakeholders and a neutral chair. The mandate of this Panel would be to review Ontario's past experience with minimum wage revisions within the context of Ontario's social and economic progress and prevailing practices in other jurisdictions to recommend changes that could better serve Ontario's future needs.
  • Recommendation #4: To aid the full review process, and to ensure that Ontario's minimum wage policies are in step with the needs of its citizens, the Government should establish an ongoing research program for data and information gathering and its subsequent analysis to address policy-relevant minimum wage issues.

As can be expected from such an exercise, the Panel's deliberations went well beyond these basic recommendations on a wide range of issues concerning the minimum wage. This was also true of public input, which extended frequently beyond the limited mandate of this Panel.

Aside from the consensus reported above, there were differences among Panel members about the scope of the Panel's mandate. Several members supported a broad interpretation of the Panel's mandate, in that the Panel should be recommending not only a mechanism for minimum wage revisions but also setting benchmarks that would relate more directly to the level of the minimum wage. Other Panel members took the view that it was outside the Panel's mandate to consider any recommendation that would lead to the determination of a specific level for the minimum wage. As Chair, I have interpreted the mandate, based on clarifications sought from and provided by the Government, as focusing on how the minimum wage rate should be set in the future. Accordingly, this report does not include any recommendation, which would effectively set a specific level for Ontario's minimum wage.

From our consultation with the public, it became apparent that various stakeholders expected that the mandate of the Panel would include a determination and/or recommendation of the minimum wage rate being set at a specific level. This was made clear by the amount of time and materials devoted to addressing this issue, in contrast to the attention paid to the set of questions set out in the Consultation Paper. Clearly, this is an issue of great significance and importance to Ontarians, and accordingly, public feedback on this issue is summarized for the Government to consider in determining the level of minimum wages.

One of the issues that surfaced is the question of the baseline for minimum wages in Ontario to which further revisions should be applied. An inflation adjustment to the minimum wage could be applied retroactively to the 2010 level to account for the increase in the cost of living since then. Some Panel members and submissions from the public expressed strong support for this idea. On the other hand, a number of public submissions and some Panel members were opposed to any retroactive adjustment.

Another key issue that emerged from public feedback concerns the inadequacy of the current minimum wage to generate an income that would allow people to escape poverty. Several Panel members expressed the belief that the Panel was established, at least in part, because of the Government's poverty reduction strategy and has recognized that many minimum wage earners are living below the poverty line. A recommendation to tie the minimum wage to a low income measure such as Low Income Cut-Off (LICO) or Low Income Measure (LIM) was made repeatedly.

The Government will need to consider whether it wishes to implement an increase in the minimum wage that would bring full-time, full year minimum wage workers above the poverty line. For the record, these proposals were strongly opposed by business groups and individuals who stressed the importance of two factors in any future revision to the level of Ontario's minimum wage. First, increases can be planned for and absorbed by business if they come in small, incremental steps. Second, Ontario's minimum wage should be in line with other Canadian provinces, the U.S. and other jurisdictions of relevance to the Canadian economy.

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