5th Session - 42nd Legislature

TIME – 6 p.m.

LOCATION – Winnipeg, Manitoba

CHAIRPERSON – Mr. James Teitsma (Radisson)

VICE-CHAIRPERSON – Ms. Janice Morley-Lecomte (Seine River)

ATTENDANCE – 6 QUORUM – 4

Members of the committee present:

Hon. Messrs. Helwer, Smith

MLA Lindsey, Ms. Morley-Lecomte, Messrs. Teitsma, Wasyliw

PUBLIC PRESENTERS:

Kevin Rebeck, Manitoba Federation of Labour

Niall Harney, Canadian Centre for Policy Alternatives, Manitoba

MATTERS UNDER CONSIDERATION:

Bill 4–The Minimum Wage Adjustment Act, 2022 (Employment Standards Code Amended)

* * *

Clerk Assistant (Ms. Katerina Tefft): Good evening. Will the Standing Committee on Social and Economic Development please come to order.

Before the committee can proceed with the business before it, it must elect a Chairperson. Are there any nominations?

Hon. Reg Helwer (Minister of Labour, Consumer Protection and Government Services): I nominate Mr. Teitsma.

Clerk Assistant: Mr. Teitsma has been nominated. Are there any other nominations?

Hearing no other nominations, Mr. Teitsma, will you please take the Chair.

Mr. Chairperson: Sorry–our next item of business is the election of a Vice-Chairperson. Are there any nominations?

Mr. Helwer: I nominate Ms. Morley-Lecomte.

Mr. Chairperson: Ms. Morley-Lecomte has been nominated. Are there any other nominations?

Hearing no other nominations, Ms. Morley-Lecomte is elected Vice-Chairperson.

This building has–or, this meeting has been called to consider the following bill: Bill 4, The Minimum Wage Adjustment Act, 2022 (Employment Standards Code Amended).

I would like to inform all in attendance of the provision in our rules regarding the hour of adjournment. A standing committee meeting to consider a bill must not sit past midnight to hear public presentations or to consider clause by clause of a bill except by unanimous consent of the committee.

Prior to proceeding with public presentations, I would like to advise members of the public regarding the process for speaking in committee. In accordance with our rules, a 10-minute time limit has been allotted for presentations, with another five minutes allowed for questions from committee members. Questions shall not exceed 30 seconds in length, with no time limit on answers.

Questions may be addressed to presenters in the following rotation: first, the minister sponsoring the bill, second, a member of the official opposition and third, an independent member.

If a presenter is not in attendance when their name is called, they will be dropped to the bottom of the list. If the presenter is not in attendance when their name is called a second time, they will be removed from the presenters' list.

The proceedings of our meeting are recorded in order to provide a verbatim transcript. Each time someone wishes to speak, whether it be an MLA or a presenter, I first have to say the person's name. This is the signal for the Hansard recorder to turn the mics on and off.

Thank you for your patience, and we will now proceed with public presentations.

Bill 4–The Minimum Wage Adjustment Act, 2022
(Employment Standards Code Amended)

Mr. Chairperson: I will now call on Mr. Kevin Rebeck from the Manitoba Federation of Labour.

Mr. Rebeck, welcome to committee. I see you have some material to hand out, so we will distribute that to the members of the committee. And whenever you're ready, you can proceed with your presentation. You have up to 10 minutes.

Kevin Rebeck (Manitoba Federation of Labour): Great. The Manitoba Federation of Labour is Manitoba's central labour body. We represent the interests of over 30 affiliated unions and over 125,000 unionized workers in the province. The MFL advocates for increased economic security for all workers in Manitoba, both unionized and non‑unionized.

The MFL and Manitoba's unions have long advocated for our provincial minimum wage to be a living wage because of a very simple principle: no one should work full-time and still live below the poverty line.

I have to admit, if you told me back in 2016 that your government was going to make significant increases to the minimum wage over one year, to increase it to $15 an hour, I would've been in full support. But in 2016, your government froze the minimum wage instead, leaving workers who are in it worse off. Fifteen dollars is what the MFL was calling for back then because $15 was a living wage six years ago, but we all know life has only gotten more expensive since then. With the crushing increase at the gas pumps, grocery stores and the cost of housing, a living wage in Manitoba is trending closer to $20 now, than it is to $15.

Not long after government announced its plans to get Manitoba's minimum wage to or around $15 an hour by October 2023, the Canadian Centre for Policy Alternatives, Manitoba released new data showing that a living wage for Winnipeg is now $18.34 an hour. That means that workers earning a minimum wage in our capital city next October will still fall over $3 an hour short of what they need to meet their basic needs.

The CCPA's living wage calculation is calculated as the hourly rate at which a household can meet its basic needs once government transfers have been added to the family's income and deductions have been subtracted, such as income taxes and employment insurance premiums.

It's important to note that the living wage calculation is based on a bare-bones budget and does not include things like credit card, loan or interest payments, savings for children's future education, retirement savings or the costs of caring for a disabled, sick or elderly family member–things that are arguably necessities but have been excluded from the living wage calculation.

I do want to acknowledge that this minister and this government finally recognized early this year that something needs to be done to raise the minimum wage far beyond the nickels and dimes it's been raised in recent years.

But I also have to note that it took the utter embarrassment of the prospect of Manitoba having the lowest minimum wage in the tire–entire country, even less than Saskatchewan, for this government to act. And the larger-than-normal increases to the minimum wage government's making is really just to play catch-up with other provinces after we let minimum wage workers languish for the last six years.

There are two major problems with the way in which Manitoba's minimum wage is currently set. First, the base rate adopted and legislated by the former premier Pallister in 2016 at $11 an hour was well below the poverty line. As a result, and despite the fact that minimum wage has been indexed to inflation since then, Manitoba's minimum wage remains well below the poverty line and will never rise above it unless it's significantly rebased.

The legislation government created keeps people in poverty and will never lift them out. It's an insult to basic human decency to have Manitobans working full time and still living in poverty, unable to meet what society agrees are the basic necessities of life. This should not be possible in a modern, caring, developed society like Manitoba.

The second issue is that Manitoba's particular indexing formula ensures a very long lag between the level of inflation currently being experienced by Manitoba workers and the indexing rate applied to the minimum wage. As a result, when inflation spikes, as it has this year, Manitoba's minimum wage workers see prices go up immediately but their wages still lag behind.

The government recognized this problem this summer when it was clear that a minimum wage indexed to the previous calendar year was going to lead to a totally inadequate minimum wage of $12.35, and you took steps to amend the legislation to allow for increases based on a high in-year inflation.

If government has concerns with the particular CCPA formula for calculating a living wage, we're open and supportive of the idea of government establishing an annual process to engage labour, management and other stakeholders in the calculation of a living wage level for Manitoba's minimum wage going forward.

We understand there might be slight differences in opinion on how to calculate a living wage, but we firmly believe that most Manitobans support the principle that the minimum wage should be a living wage and having a yearly process would help government avoid problems like the ones created by current–the current indexing formula.

As I think we're all aware, the rising cost at the gas pumps, the grocery store and in the cost of housing are making it harder for working families to make ends meet. According to a recent Statistics Canada survey, nearly three in four Canadians report that rising prices are affecting their ability to meet day-to-day expenses such as transportation, housing, food and clothing. The same survey shows that those with the lowest incomes are the most concerned and directly affected by rising prices. Simply put, rising prices are hitting the lowest wage earners hardest.

Solidifying the economic security of low wage workers should be a primary focus of any increase to the minimum wage. Younger Canadians aged 15 to 29 make up 53 per cent, and ages 30 to 39, 39 per cent, were more than twice as likely as those 40 and above to report being very concerned about their ability to afford housing or rent.

Contrary to the myths about substantial increases to the minimum wage causing job losses, there's mounting evidence that boosting the minimum wage has positive economic impacts. For instance, Ontario increased its minimum wage to $14 an hour on January 1st of 2018 as part of the then-provincial government's commitment to reach a $15 minimum wage by 2019.

Despite concerns raised by business lobby at the time about a higher minimum wage impacting job growth, between 2017 and 2019, employment grew, unemployment fell and wages increased in Ontario. Total employment increased in 2018 and even more in 2019, and the average annual unemployment rate fell from 6 per cent to 5.7 in 2018 and 5.6 in 2019.

Three industries known for low wages and precarious employment also saw sharp increases in earnings: accommodation and food services; retail and wholesale trade; and businesses and building and other support services.

* (18:10)

For over 20 years now, many highly credible studies have found that the jobs lost due to higher minimum wages are generally close to zero. A multi-decade study of over 138 state-level minimum wage changes in the United States found that between 1979 and 2016, the overall number of low-wage jobs remained essentially unchanged. Over the five years following the minimum wage increases, Canadian-born economist David Card won the 2021 Nobel Prize in economics, partially for his detailed research on the impacts of minimum wage increases on employment in the fast-food industry.

Between jurisdictions that increased the minimum wage and jurisdictions that did not increase the minimum wage, the Nobel Prize economist found that while the fast-food industry commonly has high turnover rates, as wages increased, more people were willing to take the jobs, employment didn't fall and, in some cases, it rose.

Household spending accounts for 56 per cent of Canada's gross domestic product. Ask almost any small business owner what they need to grow their business, and most will say they need customers with money to spend in their shop. Low-wage workers spend the largest proportion of their take-home pay on consumer goods and services.

When lower income households see a sustained rise in incomes, they spend virtually all of it. Much of it goes to food, rent, and to other areas of the local economy. In fact, many minimum wage earners, such as those working in grocery stores and food services, spend a considerable amount of their earnings at the very businesses they work at. Adding money to their pockets means they will have more money to spend there.

It's also important to look at the types of workers who would benefit from substantial increases in the minimum wage. According to Stats Canada, here in Manitoba, 56 per cent of minimum wage earners are women; the majority are adults, and 62 per cent are 20 years or older; 63 per cent are not students; 58 per cent work for firms that employ more than 100 people; and more than half have worked in the same job for over a year.

These statistics clearly counter the common misconception that most minimum wage earners are young students living rent-free in their parents' basement and working for fun money, rather than living expenses.

These numbers also dispel the myth that most minimum wage earners work for small mom-and-pop shops and that minimum wage is just a starting wage that workers quickly transition above.

Most minimum wage workers work for big employers and have the same job for over a year.

In closing, I want to acknowledge that your government, after six years, has recognized the minimum wage workers need a significant increase. They've fallen so far behind because of government legislation and inaction in previous years, and the significant rise over the next year will still not be enough for minimum wage workers to live above the poverty line, even with full-time work.

We believe it's time to rethink the way that minimum wage increases happen in our province, and for government, labour, business and others to come together with a made-in-Manitoba solution, one that makes sure the minimum wage becomes a living wage.

Thank you.

Mr. Chairperson: All right. Thank you very much, Mr. Rebeck, for your presentation.

Do members of the committee have questions for the presenter?

Hon. Reg Helwer (Minister of Labour, Consumer Protection and Government Services): Thank you, Mr. Rebeck, for coming tonight and presenting. There's always interesting information in your presentations, I find, and thank you for your advice to government. We've asked you on short notice sometimes, and we appreciate the turnaround time and more advice, and here I see the offer to calculate a living wage. So, thank you for your time tonight, and I'm sure we'll talk about some other issues in the future as we move things ahead.

K. Rebeck: Thank you, Minister. I'm glad we have a Minister of Labour to talk to about these things once more. It's been a long time since we've been able to even be consulted and talk about minimum wage, since government had introduced a law that really dismisses that discussion and doesn't allow it to occur. What we're really calling for is for that to occur on an annual basis, and we hope that you will help make that happen so that we can make sure that we're serving Manitobans well.

Mr. Chairperson: Further questions?

MLA Tom Lindsey (Flin Flon): Thank you for your presentation, Mr. Rebeck. It's always a pleasure to listen to you put some facts on the record about things like minimum wage.

What do you think, or what does your studies, your science, show that a minimum wage should be at today in Winnipeg, and is it the same level that it should be somewhere outside of Winnipeg, say, in the North?

K. Rebeck: Thanks. Well, right now we believe the principle that anyone who works full-time shouldn't have to live in poverty. CCPA does a living wage calculation. They do it community-based. In Winnipeg that means a little over $18 an hour. That changes in some different jurisdictions, and we recognize that as a guiding principle that there may be a need for us to come together and bring the right folks to discuss what that would mean on a provincial basis to make sure that everyone who works doesn't have to live in poverty and that we need to make that adjustment, but we would say that we're talking in the $18.50 range to make sure that we're covering everyone in the province, would be a living wage for people to–who work full time not to have to live in poverty.

MLA Lindsey: Thank you again for your presentation and look forward to hearing more from you in the future on meeting with the Minister of Labour and coming to some, hopefully worthwhile conclusions as to things about the minimum wage and what it should be.

So, thank you.

Mr. Chairperson: Mr. Rebeck, you're free to respond if you like.

K. Rebeck: Yes, well, thank you for that. And I think it is important that these dialogues happen more frequently and, as I said to the minister, that the importance of having this discussion on an annual basis can't be underscored enough, that it's great that we're making a special bill here to help try and correct something that's problematic and that many Manitobans are struggling with. They'll continue to struggle with that until we achieve a living wage rate and that won't change unless there's further legislation dealing with minimum wage that brings it up.

Mr. Chairperson: All right, we thank you very much for your presentation and for taking time to answer the questions from members of the committee.

And we'll now move to the next presenter. And I'll call on Mr. Neil [phonetic] Harney from the Canadian Centre for Policy Alternatives, Manitoba.

And I hope I said your name correctly.

Niall Harney (Canadian Centre for Policy Alternatives, Manitoba): It's Niall.

Mr. Chairperson: Niall. All right, Mr. Niall Harney, welcome. I see you have some material for distribution. We'll get that out to the members of the committee.

And you can begin your presentation whenever you're ready. You have up to 10 minutes.

N. Harney: Okay, thank you very much. So, my name is Niall Harney. I'm a senior researcher at the Canadian Centre for Policy Alternatives, Manitoba, where I hold the Errol Black Chair in Labour Issues. The Canadian Centre for Policy Alternatives is Canada's leading progressive research institute with offices across the country. We publish independent research on a wide range of policy topics, in particular on issues related to labour, employment policy, economic development and poverty.

I'm making this presentation today in response to Bill 4, the minimum wage adjustment act, 2022. Bill 4 brings in a welcome boost to the minimum wage during a difficult period for workers in Manitoba. Increasing the minimum wage to $14.15 per hour on April 1st will certainly help the thousands of Manitobans working on minimum wage deal with the sharp increase in the cost of living experienced across the country over the last 18 months.

While the minimum wage increase proposed in Bill 4 is a welcome step forward towards raising the minimum wage to $15 an hour in 2023, this bill does not raise the minimum wage sufficiently to ensure that all Manitoba workers can afford the basic necessities and escape poverty.

The Canadian Centre for Policy Alternatives publishes an annual calculation for the living wage in Manitoba. The living wage is the hourly rate at which a family of four with two parents working full time at 35 hours a week and two children below age 10 can meet their basic needs once government transfers have been added to the family's income, including the child–Canada Child Benefit, the GST credit, Rent Assist and child subsidies–child-care subsidies, sorry–and deductions have been subtracted, including income taxes, EI premiums and CPP contributions.

The calculation covers 10 categories of household expenses, including food, clothing, shelter, transportation, child care, basic health insurance, a small fund for parents' education, a small contingency fund to cover illness or job loss and other household expenses, such as cellphone, Internet and household supplies.

We use local cost‑of‑living figures from Winnipeg, Thompson and Brandon to calculate the living wage for each of these cities. We calculate that in 2022, the living wage in Winnipeg is $18.34 an hour; in Brandon, it's $15.66 an hour and in Thompson, it's $16.25 an hour.

Across the province, the wage that is required to cover the basic costs of a household and to ensure that workers and their children are not living in poverty is above the proposed minimum wage outlined for April 1st and October 1st, 2023. This means that although the minimum wage is set to increase significantly in 2023, many working families in Manitoba are likely to remain living in poverty.

For a single parent supporting a child here in Winnipeg, the living wage is $25.28 per hour. In Brandon, it's $14.44 an hour and in Thompson, it's $15.77 an hour. Given this calculation, it does not seem possible for a single parent in Winnipeg working full time to make ends meet at the current minimum wage or the future minimum.

* (18:20)

It's important to emphasize that the living wage merely covers the basic necessities for a household. A worker earning the living wage likely will not be able to cover items many take for granted, such as paying off credit cards, loans or other debt payments; saving for retirement; owning a home; saving for children's future education; recreation, entertainment or holiday costs; costs of caring for a disabled, seriously ill or elderly family member; or a cushion for emergencies and tough times.

Full-time work should always provide a decent quality of life for workers in Manitoba and should be a ladder out of poverty. Bill 4 should be amended to ensure that the minimum wage is raised to $18.34 an hour in line with the living wage.

Studies from across the country are clear–studies from across North America are clear: that increases to the minimum wage do not produce a net reduction in employment. The composition of employment does shift, however, the net boost to incomes and spending that results from increasing the minimum wage overall boosts economic development.

Further, a society in which all workers can afford the basic–at least the basic necessities of life tends to be healthier. When the minimum wage provides workers with an income that forces sacrifices to be made between food, shelter and other basics, these workers and their children take on greater stress, which results in health complications and other social issues.

We as a society end up taking on the cost–this cost through higher spending on health care, education and other social services, effectively subsidizing the social costs of low wage work.

These days, many Manitobans can relate to the frustration of working harder, only to fall further behind. Our research reveals that minimum wage workers in Manitoba are increasingly educated, established in their jobs and supporting families. Surviving on the minimum wage was untenable before the pandemic and is certainly unsustainable now.

Thank you.

Mr. Chairperson: Thank you, Mr. Harney, for your presentation.

Are there any questions?

Mr. Helwer: Thank you, Mr. Harney, for joining us this evening and congratulations on holding the Errol Black Chair in Labour Issues. I knew Professor Black, both as a university professor and as a counsellor. And he was always–dynamic discussions with him and certainly somebody that added a lot to Manitoba.

I'm interested in your calculations of the regions, the–Winnipeg, Brandon and Thompson–we are often–look at a northern allowance. Can you work me through how Thompson is lower than Winnipeg when we usually assume that living in the North is more expensive?

N. Harney: Certainly, living in the North is more expensive. The reason for the discrepancy is mostly a result of rent costs. Rent is the biggest increase in costs for household budgets across the province and in Winnipeg, the cost of rent has been increasing faster than in other regions.

This is something–we take this data from the Canadian Mortgage and Housing Corporation, which produces annual statistics on average rent. But that's the main contributor to differences between regions in terms of the income required for a living wage.

The other thing that's important to note is when you have a slightly lower cost of living, there's a really close edge between where you make an income that's high enough that you support your–or you cover your basic needs versus when you make an income that disqualifies you from benefits like Rent Assist or the child-care subsidy.

So many working families have to negotiate this fine line between making an income that allows them to support themselves while also not losing some of the benefits that would put them below poverty–or below the poverty line. And in Brandon and Thompson specifically, because there is a slightly lower cost of rent, the families in those jurisdictions qualify for Rent Assist and for other subsidies, which brings their total costs–or the total wage that they need to make ends meet lower.

MLA Lindsey: I want to thank you for your presentation; certainly, some interesting things in there and I'm glad the minister asked about some of the costs in the charts that you've provided.

I'm curious about the food costs that shows cost of food being higher in Winnipeg than it would be in Thompson. And has your group looked at anything in the North, outside of Thompson, for example, fly-in communities and communities that aren't on a main road that are serviced probably by one grocery store, and what those costs might mean as opposed to just in Thompson.

N. Harney: Certainly, we'd love to get those statistics on what the cost of food is in northern communities and get a more holistic statistic.

The issue there is always availability of data. We have to rely on national data for the most part to produce our calculations, and that's usually only produced at the level of large urban centres. And so, to get that data on the average cost of food and specific smaller communities, we would have to do that ourselves, which we unfortunately don't have the time for, but maybe could look into that in the future.

MLA Lindsey: I thank you for explaining that.

I think it would be a very worthwhile exercise to look into some of those costs, particularly when it comes to food, because coming from the North, I recognize the disparity. When I go from Flin Flon, there's a certain cost that I know for groceries. But, when I look on the store shelves in some of those northern communities–and not necessarily ones that are fly-in, but just ones that are at the end of the road, if you will–those costs are dramatically higher than what we would see in Flin Flon or Thompson. So I think it'd be a worthwhile exercise.

I'm not sure how we could go about making that happen, but it's an important piece of the puzzle for people in the North, for sure.

N. Harney: Certainly, I'm with you on that, and it's something that we'll look into in the future.

Thank you.

Mr. Chairperson: All right, seeing no further questions then, we'll thank you very much for your presentation and for being willing to interact with the committee on the questions that they had.

And that concludes the list of presenters I have before me.

* * *

Mr. Chairperson: So, we will now proceed with clause by clause of Bill 4.

Does the minister responsible for Bill 4 have an opening statement?

Mr. Helwer: So, in brief, we chose, as a government, of course, to raise the minimum wage, but to do it as a two-part increase to, I guess, buffer the effects on business and on wage earners.

We are in–living in interesting times that continue to be very dynamic, and we'll continue to watch that.

And as we move through this, of course, in the–after this legislation, we will return to the calculations in the bill–the original bill–of how we will calculate increases in minimum wage. That consistency is important, not to–not only to people that are earning salaries, of course, but also to business, to have some predictability.

Mr. Chairperson: We thank the minister.

And does the critic from the official opposition have an opening statement?

MLA Lindsey: I would certainly want to thank folks for coming out and making the presentations tonight.

I think they've presented some pretty solid evidence that where this government has landed for the minimum wage and where they've landed for when it actually should increase, the government should be able to see that people that are working for minimum wage are still going to continue to fall far behind where they need to be, because they were already behind to start with.

It's concerning when I hear the minister say that, at the end of this term to October 2023, when the final raise that gets us hopefully close to $15, that we'll revert back to the previous way of calculating it, which left people so far behind already that to revert back to that system, in my opinion, would be unacceptable.

And I would hope the government would be–take Mr. Rebeck up on his offer to sit down and really have meaningful discussions on where that minimum wage should be and how it should go about being raised.

And we've certainly heard tonight from presenters who laid it out very clearly that raising the minimum wage to $15 a number of years ago in other jurisdictions didn't lead to mass layoffs. It didn't lead to greater unemployment. It actually–employment levels stayed consistent or actually went up.

And Mr. Rebeck, quite rightfully, pointed out in his presentation that people that are working for wages, even if it's minimum wages, when they get a raise, the majority of that goes back into circulation for basic foodstuffs. The kids maybe get a new bike one year that they couldn't get for quite a while; maybe they get some new shoes as opposed to hand-me-downs.

* (18:30)

So these things are really important, and I want to thank Mr. Harney for his presentation that talks about the different levels that a minimum wage should be in different areas, and I think it would be a worthwhile exercise for the government or somebody to look at what the lowest cost would be outside of an urban centre, particularly in the North where freight costs and everything else make things exponentially higher; that without having the scientific proof to back it up, I know that the cost of groceries in a lot of those communities is just astronomical, and just the distances folks have to travel–I know there's people from Lynn Lake, for example, drive to Leaf Rapids because groceries are so much cheaper in Leaf Rapids because they have a Co‑op and it's closer access to sort of less shipping costs.

I just really want to impress upon the minister that raising this minimum wage to the level he's proposed by April 1st is going to leave people working for minimum wage that much further behind, and not raising it to somewhere close to 15 until October of 2023, when in fact, it was recommended that 2016 it should be $15 an hour, is going to leave a lot of those folks unable to support themselves. And, certainly, they're never going to get out of poverty with it at the levels that the government has proposed.

Thank you.

Mr. Chairperson: We thank the member.

During consideration of the bill, the enacting clause and the title are postponed until all the other clauses have been considered in their proper order.

Clause 1–pass; clause 2–pass; clause 3–pass; enacting clause–pass; title–pass. Bill be reported.

The hour being 6:33 p.m., what is the will of the committee?

Some Honourable Members: Committee rise.

Mr. Chairperson: Committee rise.

COMMITTEE ROSE AT: 6:33 p.m.