Jock Finlayson, Executive Vice President and Chief Policy Officer of the Business Council of British Columbia (submitted)

COLUMN: B.C.’s labour minister should look at COVID-19 financial carnage amid minimum wage increase

The timing couldn’t be worse for any government decision that drives up costs for business, writes Jock Finlayson

Minister of Labour Harry Bains recently confirmed that B.C.’s minimum wage will climb by 75 cents to $14.80 per hour on June 1. This is in keeping with a schedule of planned increases announced by the NDP government a couple of years ago.

Many people will welcome the prospect of the lowest-paid workers earning more. When the NDP government started down the road of boosting the minimum wage, the Business Council of B.C. supported the policy.

In normal economic times, most organizations that employ relatively low-paid workers can adjust to modest increases in labour costs associated with a higher minimum wage, without necessarily dampening overall job growth in the process. And this is more or less what happened amid the buoyant job market the province enjoyed from 2017 until mid-2019.

READ MORE: B.C.’s minimum wage to go up 75 cents in June

The government’s latest move on the minimum wage, however, is problematic. Businesses across B.C. have been hit with the biggest shock in decades as large swathes of the economy were shut down to help manage the COVID-19 pandemic. At the same time, the province’s export-oriented industries have been hammered by the sudden onset of a deep global recession together with disruptions to international supply chains and the virtual cessation of cross-border travel and tourism.

In truth, the timing couldn’t be worse for any government decision that drives up costs for business. In March and April, B.C. lost a staggering 400,000 jobs as tens of thousands of businesses and non-profits were compelled to shut their doors and laid off huge numbers of staff. Many self-employed and “gig” workers have also seen their incomes shrivel. When earlier minimum wage increases were implemented, B.C.’s unemployment rate was around 5 per cent. Now, it is above 11 per cent and still rising.

How bad are things for the private sector? A new survey conducted by the Business Council, the Greater Vancouver Board of Trade, and the B.C. Chamber of Commerce tells the story of a business community in distress.

Almost 80 per cent of the firms surveyed report dwindling revenues. Many have furloughed staff. Almost four in ten say they have deferred or cancelled capital projects since February. And while the B.C. government is re-opening the economy by gradually easing social distancing restrictions, barely one-quarter of the companies directly impacted by COVID-19 believe they are ready to restart and operate profitably.

Of interest, about one-third of B.C. firms have increased their digital or e-commerce presence in the past three months, a step that may allow them to run their businesses with fewer workers once the pandemic has passed.

A key question is how many of the 400,000 jobs lost in B.C. since February will “come back” as the economy wakes up over the coming months. Some undoubtedly will, as more companies re-open and ramp up activity. But thousands of small and mid-sized businesses are likely to close for good, either voluntarily or due to insolvency. Many others will resume operations but with fewer employees.

Restaurants and retail stores, for example, have been ordered to reduce capacity and limit the number of customers served; this will assuredly translate into less need for employees. All segments of B.C.’s large tourism sector will struggle to survive through the end of 2020 as visitor numbers plummet. More generally, shifts in consumer behaviour due to worries over the virus will weigh on the demand for some goods and services, depressing employment in certain industry sectors.

In this challenging economic environment, governments at all levels should be doing everything possible to encourage companies to re-hire and retain workers. This requires a concerted focus by policy-makers on containing costs, including labour costs. Unfortunately, B.C.’s ill-timed increase in the minimum wage will work against this objective by making it harder for many businesses to rehire and retain employees.

Instead of aggravating an already difficult situation, the Minister of Labour should take an honest look at the carnage befalling large parts of our business community during this economic calamity and recognize the overriding need to get people working again.

Jock Finlayson is the Executive Vice President and Chief Policy Officer for Business Council of British Columbia

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Legion president Al Casswell hands a poppy to Pitt Meadows Mayor Bill Dingwall. (Special to The News)
Legion poppy campaign will start Nov. 1

Maple Ridge’s Legion branch has been raising more than $72,000

Mario Palcich sits atop his 161 pound pumpkin and enjoys a glass of wine. (Special to THE NEWS)
88-year-old Pitt Meadows farmer grows 161-pound pumpkin

Granddaughter goaded Mario Palcich into growing giant gourds

One of the options city council is looking at to reduce greenhouse gases is strengthening development requirements for electric vehicle charging infrastructure. (The News files)
New net zero greenhouse gas emission target for Maple Ridge

City voted to change the target on Oct. 20

There is a case of COVID-19 at Baillie House, located on the grounds of Ridge Meadows Hospital. (Google)
COVID-19 case at Baillie House in Maple Ridge

Seniors facility at Ridge Meadows Hospital one of five with new cases in region

Curtis Sagmoen
Vernon RCMP warn sex workers to stay away from Curtis Sagmoen

RCMP warns workers to stay away from Salmon River Road area

Provincial health officer Dr. Bonnie Henry presents modelling of COVID-19 spread in B.C., March 25, 2020. (B.C. government photo)
B.C. sets another COVID-19 record with 203 new cases

up to 1,766 active cases in B.C., two more deaths

Jordan Naterer, an electrical engineer from Vancouver, was last seen Saturday Oct. 10. (Facebook photo)
Search efforts to resume for missing Manning Park hiker; Trudeau speaks on case

PM says he’ll do what he can to ‘nudge’ efforts to find Jordan Naterer, yet has little leverage locally

Smartphone showing various applications to social media services and Google. (Pixabay photo)
National media calling for level playing field with Google, Facebook

In Canada, Google and Facebook control 80 per cent of all online advertising revenues

Is it time to start thinking about greener ways to package cannabis?

Packaging suppliers are still figuring eco-friendly and affordable packaging options that fit the mandates of Cannabis Regulations

Join Black Press Media and Do Some Good

Pay it Forward program supports local businesses in their community giving

Swimco announced recently it is shutting all of its stores in Canada, including in Langley. (Swimco website)
Canadian-owned swimsuit chain bankrupt

Swimco had been in creditor protection for several months

École de L’Anse-au-sable. (Google Maps)
B.C. records first COVID-19 outbreak at school, six weeks after students return to class

Three cases of the virus have been identified at École de L’Anse-au-sable

Green Party leader Sonia Furstenau is seen as she leaves media event during a campaign stop in West Vancouver, B.C., Tuesday, October 20, 2020. THE CANADIAN PRESS/Jonathan Hayward
B.C. Green leader hopes voters see value in minority government

The Greens received nearly 17 per cent of the popular vote in 2017 yet received just three seats

Most Read