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CFIB warns B.C. against any potential $20/hour living wage legislation

Mandatory living wage of $20 per hour could cost province $4.3 billion in extra wages, says Canadian Federation of Independent Business.
While some groups lobby for a living wage, the Canadian Federation of Independent Business suggests income-based tax cuts.

Minimum wage earners in B.C. will get a four per cent hike as of June 1, when the mandatory minimum wage goes up from $16.75 to $17.40 per hour.

But the Canadian Federation of Independent Business (CFIB) is warning against mandatory minimum wages going too high, saying it would be bad for the economy and small businesses if governments were to implement living wage standards.

In a new report, the CFIB warns that if B.C. were to mandate a $20 per hour living wage, it would cost the provinces $4.3 billion in extra wages and put 75,500 small businesses at risk of becoming unprofitable.

Not that the B.C. government is currently planning to implement a living wage. But a number of organizations have been pushing for a living wage and a number of municipal governments have flirted with it.

There may be increased pressure to adopt legislated living wage standards, as inflation has reduced Canadian's buying power.

But the CFIB warns against relying on living wage laws as a way to address inflation and poverty.

"Minimum wage and living wage policies often miss the mark when it comes to truly supporting the most vulnerable workers,” CFIB policy analyst Beatrix Abdul Azeez said in a news release.

“Governments should shift away from relying on these blunt tools and instead adopt a new approach to ensure workers can cope with the rising cost of living, while also guaranteeing that small businesses aren't unfairly burdened.” 

The CFIB report recommends addressing affordability by reforming personal income taxes to allow low-income earners to retain more income, and providing housing subsidies and reducing fuel and carbon taxes for low income earners.

The report notes that most people who earn minimum wages are young people just entering the workforce, with a high school education or less, and that most minimum wage jobs are “transitional, often serving as a starting point for young workers.”

As of 2023, there were 17 million working Canadians, the CFIB report said, of which 6.5 per cent — about 1.1 million people—were minimum wage workers.

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