Manitoba Committee Hansard — 23 May 2017 (Social and Economic Development Committee, Sitting 7, 41st Legislature, 2nd Session)

41-2-sed7

Manitoba — Debates (Hansard)

Second Session – Forty-First Legislature of the Legislative Assembly of Manitoba Standing Committee on Social and Economic Development Chairperson Mr. Doyle Piwniuk Constituency of Arthur-Virden Vol. LXX No. 7 - 6 p.m., Tuesday, May 23, 2017 ISSN 1708-6698

MANITOBA LEGISLATIVE ASSEMBLY Forty-First Legislature Member Constituency Political Affiliation ALLUM, James Fort Garry-Riverview NDP ALTEMEYER, Rob Wolseley NDP BINDLE, Kelly Thompson PC CLARKE, Eileen, Hon. Agassiz PC COX, Cathy, Hon. River East PC CULLEN, Cliff, Hon. Spruce Woods PC CURRY, Nic Kildonan PC DRIEDGER, Myrna, Hon. Charleswood PC EICHLER, Ralph, Hon. Lakeside PC EWASKO, Wayne Lac du Bonnet PC FIELDING, Scott, Hon. Kirkfield Park PC FLETCHER, Steven, Hon. Assiniboia PC FONTAINE, Nahanni St. Johns NDP FRIESEN, Cameron, Hon. Morden-Winkler PC GERRARD, Jon, Hon. River Heights Lib.

GOERTZEN, Kelvin, Hon. Steinbach PC GRAYDON, Clifford Emerson PC GUILLEMARD, Sarah Fort Richmond PC HELWER, Reg Brandon West PC ISLEIFSON, Len Brandon East PC JOHNSON, Derek Interlake PC JOHNSTON, Scott St. James PC KINEW, Wab Fort Rouge NDP KLASSEN, Judy Kewatinook Lib. LAGASSÉ, Bob Dawson Trail PC LAGIMODIERE, Alan Selkirk PC LAMOUREUX, Cindy Burrows Lib. LATHLIN, Amanda The Pas NDP LINDSEY, Tom Flin Flon NDP MALOWAY, Jim Elmwood NDP MARCELINO, Flor Logan NDP MARCELINO, Ted Tyndall Park NDP MARTIN, Shannon Morris PC MAYER, Colleen St. Vital PC MICHALESKI, Brad Dauphin PC MICKLEFIELD, Andrew, Hon.

Rossmere PC MORLEY-LECOMTE, Janice Seine River PC NESBITT, Greg Riding Mountain PC PALLISTER, Brian, Hon. Fort Whyte PC PEDERSEN, Blaine, Hon. Midland PC PIWNIUK, Doyle Arthur-Virden PC REYES, Jon St. Norbert PC SARAN, Mohinder The Maples Ind. SCHULER, Ron, Hon. St. Paul PC SELINGER, Greg St. Boniface NDP SMITH, Andrew Southdale PC SMOOK, Dennis La Verendrye PC SQUIRES, Rochelle, Hon. Riel PC STEFANSON, Heather, Hon. Tuxedo PC SWAN, Andrew Minto NDP TEITSMA, James Radisson PC WHARTON, Jeff Gimli PC WIEBE, Matt Concordia NDP WISHART, Ian, Hon.

Portage la Prairie PC WOWCHUK, Rick Swan River PC YAKIMOSKI, Blair Transcona PC Vacant Point Douglas

149 LEGISLATIVE ASSEMBLY OF MANITOBA THE STANDING COMMITTEE ON SOCIAL AND ECONOMIC DEVELOPMENT Tuesday, May 23, 2017 TIME – 6 p.m. LOCATION – Winnipeg, Manitoba CHAIRPERSON – Mr. Doyle Piwniuk (Arthur-Virden) VICE-CHAIRPERSON – Mr. Blair Yakimoski (Transcona) ATTENDANCE – 11 QUORUM – 6 Members of the Committee present: Hon. Messrs. Cullen, Fielding Messrs. Allum, Helwer, Ms. Lamoureux , Mr. Lindsey, Mses. Marcelino, Morley -Lecomte, Messrs. Nesbitt, Piwniuk, Yakimoski PUBLIC PRESENTERS: Mr. James Rilett, Restaurants Canada Mr. Kevin Rebeck, Manitoba Federation of Labour Ms.

Michelle Gawronsky, Manitoba Government and General Employees' Union Mr. Bob Moroz, private citizen Ms. Molly McCracken, (by leave) Canadian Centre for Policy Alternatives Mr. Josh Brandon, Make Poverty History Manitoba Mr. Jonathan Alward, Canadian Federation of Independent Business Mr. Darcy Penner, Canadian Community Economic Development Network Ms. Lynne Fernan dez, Canadian Centre for Policy Alternatives Mr. Loren Remillard, Winnipeg Chamber of Commerce Mr. Cory Kolt, Manitoba Chambers of Commerce Mr. Michael Chin, private citizen Mr. Scott Jocelyn, Manitoba Hotel Association Mr. Paul McKie, Unifor Ms.

Nicole Dvorak, private citizen Mr. Matt McLean, Canadian Union of Public Employees Mr. Carlos Sosa, private citizen MATTERS UNDER CONSIDERATION: Bill 33–The Minimum Wage Indexation Act (Employment Standards Code Amended) * * * Mr. Vice- Chairperson: 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 new Chairperson. Are there any nominations for this position? Mr. Reg Helwer (Brandon West): I nominate Mr. Doyle Piwniuk. Mr. Vice- Chairperson: Mr. Piwniuk has been nominated.

Are there any other nominations? Hearing no other nominations, Mr. Piwniuk, will you please take the Chair. Mr. Chairperson in the Chair Mr. Chairperson: This meeting has been called to consideration the following bill: Bill 33, The Minimum Wage Indexation Act, employment standards code amendment–amended. I would like to inform all in attendance of this provision in our rules regarding the hour of adjournment. The standing committee meeting is considered bill –must not sit past midnight to hear public presentations or consider clause by clause of a bill, except for unanimous consent of the committee.

We have a number of presenters registered to speak tonight as noted on the list of presenters before you. On the topic of determining the order of public presentations, I will note that we have some out of–present–out-of-town presenters in attendance, marked with an asterisk on the list. With the consideration in mind, in what order does the committee wish to hear the presentations? Mr. Helwer: Mr. Chair, I suggest we hear the out - of-town presenters followed by the list in the order as presented. Mr. Chairperson: Is it agreed by the committee to listen to the out- of-town presenters first? Agreed? [Agreed]

150 LEGISLATIVE ASSEMBLY OF MANITOBA May 23, 2017 Before we proceed with the presentations, we have a number of other items and points of infor - mation to consider. First of all, if there is anyone else in the audience who would like to make a presentation this evening, please register with the staff at the entrance of the room. Also, if –for the information of all presenters, while written versions of the presentations are not required, if you are going to ac company your presentation with written materials, we ask that you provide 20 copies. If you need help with photocopying, please speak to one of our staff.

As well, in attendance with our rules, the time limit is 10 minutes and will be allocated for presentations, with another five minutes allowed for questions from the committee members. If a presenter is not in attendance when their name is called, they will be dropped to the bottom of the list. If a presenter is not in attendance with –their name is cal led a second time, they will be removed from the presenters' list. Prior for proceeding with public presentations, I would like to advise members of the public regarding the process of speaking to–in committee.

In proceeding with your –our meeting–are recorded in order to provide a verbatim transcript. Each time everyone wishes to speak, whether it is an MLA or presenter, I first have to say the person's name. This is a 'singal' that–for Hansard recorder to turn the mic on and off. Thank you for your pati ence and we will now proceed with public presentations. Bill 33–The Minimum Wage Indexation Act (Employment Standards Code Amended) Mr. Chairperson: So we'll start with the out- of-town person on the list, and first person, comes–is James Rilett from Restaurants Canada. Good evening, Mr. Rilett.

Do you have any written materials? Mr. James Rilett (Restaurants Canada): No, I'm just going to have remarks and keep it short for you. Mr. Chairperson: Okay. Please proceed with your presentation, Mr. Rilett. Mr. Rilett: Honourable members, legislative officers and staff, my name is James Rilett. I'm the vice-president, central Canada, for Restaurants Canada. I'm always humbled presenting before a legislative committee and to be an active part of the law-making process. I want to thank you for affording me this opportunity, and I will try to repay you by keeping my remarks brief.

I'm here to support –speak in support of Bill 33, The Minimum Wage Indexation Act on behalf of Manitoba's restaurant industry. Manitoba's restaurant industry is comprised of over two hundred and– 2,500 restaurants, bars, and caterers in cities, towns and villages, and communities across the province. Our industry employs directly 43,000 people and contributes $2.2 billion to the economy. The industry purchased three hundred and –$730 million worth of 'frood' products, mostly from local suppliers and farmers.

More than that, we employ youth and people new to the job market more than any other industry; 22 per cent of Canadians say their first job was in the restaurant industry. In the industry, the biggest single cost is labour; 36 per cent of the yearly unit volume is paid back to the community in the form of salaries and wages. As we are an industry that gives youth the opportunity for the all -important first time job, minimum wage is an important factor for us.

While most employees make well above the minimum wage, the cascading effect of increases are significant to operators, whose profit margins are well below four per cent. Large, unexpected increases in costs can have a crippling effect on business that may already be experiencing problems with profitability. To illustrate this point, our senior economic – economist ran a model using statistically average restaurant. Say Jill's café is your statistically average restaurant. Jill's yearly volume –sales volume is $660,000. She pays 36 per cent of that to her employees as salaries and wages.

Jill has a pre- tax profit or three per cent, or $19,800. A 10 per cent increase in minimum wage w ould have a cascading effect and cost $12,700, representing an erosion of her profits by 64 per cent. It is with this in mind that we–it is important that we keep control of minimum wage and that we don't have huge increases. That being said, our operator s understand that wages rise and their employees should get regular increases. We understand that the government has a responsibility to raise the minimum wage. What we look for from the government are three things: responsible increases, the ability to plan for

May 23, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 151 increases, and to take the politics out of the decision- making process. With Bill 33, we believe the government has met these goals. By indexing the minimum wage to consumer price index, the government has ensured minimum wage will rise naturally with inflation. By going further and guaranteeing there will be no reduction, the government has protected employees from deflationary cycles.

By announcing the upcoming increases six months prior to imple - mentation, it gives companies, especially small businesses, the opportunity to plan for the increase and to make adjustments to their business plans without any drastic measures such as employee cutbacks or reduction in hours. Finally, we believe the government has met the goal of taking the politics out of the process. For years and in many jurisdictions we have seen workers used as a political pawn to curry favour with the electorate.

Minimum wage is something that should be determined by a formula which balances the needs of the employees with the ne eds of the businesses that employ them. I would also like to point out that minimum wage as a social justice equalizer is a very blunt instrument that should never use–be used to–in place of social welfare projects. It is something that reflects the cost to business and the ability of them to pay and the ability of employees to get decent increases. Finally, I want to thank Minister Cullen for bringing forth this bill, and I want to thank you again for allowing me the time to address you.

As I said, I would be brief, and I'll take questions if you'd like. * (18:10) Mr. Chairperson: Thank you, Mr. Rilett, for your presentation. Any questions from the committee? Hon. Cliff Cullen (Minister of Growth, Enterprise and Trade ): Mr. Rilett, thank you very much for your presentation tonight, and certainly thank you for the work that, you know, your organization does through your members. It's a real training ground for many Manitobans, and, as you say, it's their first exposure to the workplace, so we appreciate what you're doing.

Obviously, we've tried to strike a balance in this legislation, and, obviously, with the indexing component, we think it sends a message and talks about predictability. Could you talk about how important pre - dictability is to your sector? Mr. Rilett: Sorry, thank you. Predictability is everything, especially in a small business where, if you can't predict what your costs will be from month to month, you end up cutting back hours, you end up cutting back on food supplies, maybe running out of food, maybe having to close a day a week, and that all has a cascading effect on your business model.

So what we've seen in the past is other jurisdictions that raise minimum wage without giving any hint of –or any time to adopt to that, we see–the first thing you usually do is cut back on hours. Say, we can do with three servers instead of four. Maybe we won't keep as many people as late at night. The hours are cut back. The –you–maybe not hire that young person that doesn't have any experience, and you don't want to take a chance on them because you just can't afford to. Your margins get so tight, you just can't afford it.

So, unfortunately, labour is usually the first thing that's cut when you have unexpected and unanticipated expenses. Mr. Chairperson: Any other questions? Mr. James Allum (Fort Garry -Riverview): Mr. Rilett, thanks for coming tonight. Don't you think that those earning minimum wage have increased purchasing power when they get a raise that's actually of an acceptable amount and that they spend it in the very restaurants that you're representing here tonight? Mr. Rilett: Well, that's a theory I've seen forwarded. I've never seen anything that proves that it goes directly–you can make it work directly.

If we wanted to take that to extremes, if that was the case, that increase–simply increasing it will increase your customers, then why not increase it to $20 or $30? It just doesn't work. [interjection] Yes, it just–it simply–you have small businesses that have to pay this amount, and they just –they can't afford to continually be increasing it because of political will. Mr. Tom Lindsey (Flin Flon): You talked in your presentation about how the minimum wage workers are young people or first job.

Could you give me some statistics, pe rhaps, on how many minimum wage workers in the –well, in your industry are not just kids with their first job? How many of them are single parents? How many of them are long -term

152 LEGISLATIVE ASSEMBLY OF MANITOBA May 23, 2017 wait staff that depend on these wages to support their family? [interjection] Mr. Chairperson: Mr. Rilett. Mr. Rilett: Sorry, I can't get used to that. I can't give you–in our industry, I know, Canada- wide was–Stats Canada data shows about 10 per cent are single wage earners that are making minimum wage. The vast majority are people that –it's the second job or a part -time job or an earning job during high school or college. So –but I can't give you for our industry.

As I said, most people that are full -time in the industry make well above minimum wage, but the cascading effect that I talked about was, if you raise minimum wage by $2 and I'm making–I've worked– been there for years, so I'm already making $3 above minimum wage, I say, well, I also want a $2 increase. So it cascades up; so, even somebody making $18 to $20 wants that $2 increase. So it's not simply the people that are making minimum wage; it's everybody else that wants it. And some contracts are tied. Your minimum –your wage is tied to what minimum wage is, and it goes up commensurately.

So that's when we talk about the cascading effect. It's not just the people that are making minimum wage and the slim minority of people that are only making minimum wage to employ their –or to support their families. Ms. Flor Marcelino (Leader of the Official Opposition): Thank you, Mr . Rilett, for your presentation. I just have a question, maybe you could respond with your personal view, or your business view.

Would you prefer a person receiving a decent minimum wage or a living wage over a person who– because if it's, the minimum wage is too low, it's not–he or she's not able to subsist by it –would prefer to be recipient of social assistance? Which would you prefer: a higher minimum wage that the person is able to be self -sustaining in, still living very simply, or someone who just give up, it's not–he or she's not able to subsist with that low minimum wage, so I'll just take welfare? Mr.

Chairperson: Before we can continue, I just wanted to let everyone know that –the committee – that we actually went over the five minutes. So is it up to–is it up for the committee–does the committee want to extend the question time to permit Mr. Rilett to answer that question? [Agreed] Mr. Rilett: It's hard to answer a hypothetical question like that, but I guess what I would reinforce is that anyone in our industry anyway, and most other industries that are making minimum wage, it's usually a training wage.

So it's in that period of time where you're not–where you're learning the industry, you're learning the job, you're just getting your feet wet, and then your salary increases commence really. Yes, we would all like to have employees that can support whatever they want. The problem with the minimum wage as a blunt instrument is, you have to pay the same minimum wage to a 14-year-old high school student that wants to buy a snowboard as a single mother that has three kids to support. So, unfortunately, it's a very blunt instrument to use as a social justice tool. Mr. Chairperson: Well thank you very much, Mr.

Rilett, for your presentation. And now–I will now call on Mr. Kevin Rebeck, Manitoba Federation of Labour, to come up to do his presentation. Mr. Rebeck –I mean, Mr. Rebeck, do you have any materials that you want to hand out to the committee members? Mr. Kevin Rebeck (Manitoba Federation of Labour): Yes, I do. Mr. Chairperson: Okay, we'll get somebody to hand them out for us. You can please proceed with your presentation, Mr. Rebeck. Mr. Rebeck: Thank you and good evening.

I'm president for the Manitoba Federation of Labour and I'm here tonight not only on behalf of a hundred thousand unionized workers we represent, but also in solidarity with all working families, including almost 30,000 minimum wage earners in our province. Manitoba's labour movement joins with any poverty activists, commun ity organizations, eco- nomic and social academics, and experts in families living near or below the poverty line to condemn Bill 33, The Minimum Wage Indexation Act.

The bill entrenches working poverty in our province, ensuring that working poor are kept below the poverty line with no path out. It's absolutely shameful that this government wants to legislate the paying of poverty wages. One year ago, the government suspended the regular process of the reviewing of the minimum

May 23, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 153 wage level, a process with a long history in Manitoba dating back several decades and over several different governments. They then proceeded to freeze the minimum wage for an entire year, leaving Manitobans as one of only two provinces in Canada– along with Newfoundland and Labrador –to not raise the minimum wage in 2016. Well , the term freeze would seem to imply to at least keeping minimum wage earners whole; that's regrettably not the case.

Due to the well- known effects of inflation, we all know that freezing the minimum wage actuall y sets minimum wage earners back financially. It erodes their purchasing power. This years' minimum wage freeze leaves full -time minimum earners some $400 worse off. How does this government justify taking $400 away from every working poor family in our province? It's disgraceful. Manitoba's minimum wage falls far short of what working families need to meet their basic needs and to rise above the poverty line.

Statistics Canada most recent 2014 calculation of the low -income cut- off, or LICO, a commonly use d measurement of the poverty line, reveals that Manitoba's current minimum wage falls $4.53 an hour short of even the poverty line, never mind a wage above the poverty line. That means we need a 40 per cent increase in the minimum wage to just boost minimum wage earners to the poverty line, to say nothing of a more comfortable wage level. * (18:20) This confirms that Manitoba's current minimum wage is not a living wage; it's a poverty wage.

Families working full time for minimum wage do not earn enough to escape poverty despite having a job and despite working full-time hours. The labour movement's position on minimum wage is premised on the simple principle that no Manitoban working full time should have to live in poverty. We would hope this is something we could all agree on, regardless of political stripe. Having a job and working full time should allow Manitobans to live above the poverty line, plain and simple. Full-time work should be a pathway out of poverty, not a poverty trap.

Minimum wage jobs may not afford a generous lifestyle or even a common middle-class lifestyle, but no full-time worker should be trapped living below the poverty line. All workers should earn a living wage and employers should not be permitted to pay poverty wages. It's important to recognize that minimum wage earners are moms and dads, everyday people who are working to make ends meet. A poverty -level minimum wage forces low -income working families like these to make impossible choices between paying rent or buying groceries, school supplies, bus fare, or other essentials.

Minimum wage opponents have sought to perpetuate stereotypes about minimum wage earners that simply aren't true. They would have us believe that minimum wage earners are mostly teenagers living at home in their parents' basement, free of rent, food and utility expenses, and working for weekend fun money at small mom and pop shops that can't afford to boost their wages. Nothing could be further from the truth. In actuality, most minimum wage earners are adults. More than two- thirds are age 20 or over.

Women, not men, make up the majority of mi nimum wage earners, which not only leaves more women living in poverty, but also worsens Manitoba's serious child poverty problem. Only 37 per cent of minimum wage earners are students, many of whom work more than one job to not only pay their bills, but also afford tuition costs, which we all know this government wants to raise significantly. Fifty-six per cent of minimum wage earners work for firms with more than 100 employees, and just over half of all minimum wage earners have been in the same job f or over a year, still making minimum wage.

Raising the minimum wage also has a positive stimulus effect on the local economy because low-income workers have the highest marginal propensity to consume. That is to say, they spend the greatest portion of their income on consumer goods and services, rather than diverting their income into savings, and most of that spending happens here in our local economy. A growing economy, in turn, supports healthier government revenues and a better overall fiscal position. Ask almost any small business owner what they need to grow their business and most will say they need customers with money in their pockets to spend.

While opponents have tried to suggest that minimum wage increases will force employers to 'dramastically' reduce hours or even lay off staff causing the economy to contract, there's strong

154 LEGISLATIVE ASSEMBLY OF MANITOBA May 23, 2017 evidence to the contrary. In a letter calling for a higher federal minimum wage in the United States, a group of over 600 economists have stated that the weight of the evidence now shows that increases in the minimum wage have little or no effect on the employment of minimum wage workers even during times of weakness in the labour market. Research suggests that a minimum wage increase could have a small stimulative eff ect on the economy as low-wage workers spend their additional earnings, raising demand and job growth and providing some help on the jobs front.

It's time for Manitoba to chart a path forward towards a living wage for all. We call on government to legislate a

schedule of increases to raise the minimum wage to achieve the LICO level of $15.53 an hour –2014 LICO. Indexing minimum wage to LICO will at least allow full-time workers to get out from under the poverty line and earn a decent wage sufficient to meet their basic needs. A pre -set

schedule of increases will give employers and workers certainty while providing adjustment time and affirming a commitment to the principle that full -time work should lift you out of poverty. Economists, social policy exper ts and politicians of all political stripes have long argued that good jobs are the best social program, the best ticket out of poverty, but this is only true if work pays a living wage. Government invests significant resources towards supporting low -age 'werners'–low-wage earners in Manitoba, in effect subsidizing the wages paid by minimum wage employers.

Programs like Rent Assist, maximum parent fees for child care, and a host of other important programs subsidize the wages working families have to earn in order to make ends meet. And, of course, even with these investments far too many full -time workers still live in poverty. Wages need to be a bigger part of the solution and employers must do their part. Raising the minimum wage has the potential t o have an enormous positive effect in reducing Manitoba's poverty rates without requiring additional government expenditures and, in fact, providing major savings to government.

Instituting a policy of annual indexation, using Manitoba's current minimum wage of $11 an hour as the base rate as per Bill 33 , will not only fail to address the significant gap between the current rate and what's needed to lift full -time workers and families out of poverty, but it will ensure that mini - mum wage is locked in at a rate that's significantly below the poverty line on a permanent basis. Annual indexation is only good policy if applied to a base minimum wage that's a living wage to begin with.

We're additionally alarmed by Bill 33's allowance for government to arbitra rily cancel minimum wage indexation at any time for any year. The bill makes no provision for the possibility of higher than inflationary increases, irrespective of the socio-economic needs of working families or our provincial economy. But, inexplicitly , the bill allows Cabinet, at its discretion, to cancel indexation and freeze the minimum wage with a stroke of a pen, with no consultation with the public and no consultation with the Legislative Assembly.

Not only is this government failing to do the ri ght thing for hard- working Manitoba families, legislating the payment of poverty wages, but they're even giving themselves permission to do even less. They want to be able to strip away current purchasing power from our lowest paid workers and leaving mini mum wage workers work off–worse off. That's shameful. In lieu of meaningful increases in the minimum wage, the government has talked a lot about how – about somehow addressing poverty through tax reductions and specifically through increases to the basic personal amount.

But the reality is that when compared with increasing the minimum wage, increasing the BPA provides significantly less benefit to minimum wage earners and does so at a major cost to the provincial Treasury, which ultimately puts downward pre ssure on the public services that low -income workers depend on disproportionately. Approximately 80 per cent of the $11.6 million in reduced taxation that resulted from this government's first indexation of the BPA will accrue to Manitobans earning more t han minimum wage.

On an individual basis, the average minimum wage earner will benefit by only $17 for the entire year from the BPA indexation, far short of anything resembling– Mr. Chairperson: Mr. Rebeck, you have one more minute. Mr. Rebeck: –meaningful improvement. By contrast, a modest 50 cent increase would provide a benefit of $742 for a full-time worker.

May 23, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 155 Bill 33 not only does nothing to address poverty in Manitoba or provide support to working families, working-poor families in our province, but it actually legislates the perpetuation of working poverty. We condemn this bill in the strongest terms and urge the government to amend its indexation plan to start from a living wage base. Let's make work a true path out of poverty. Mr. Chairperson: We thank you, Mr. Rebeck, for your presentation. Any questions from the committee? Mr. Cullen : Thank you, Mr. Rebeck. Good to see you again, the second time today.

I thank you for your presentation. What we tried to do with the indexing formula, as some of the other provinces are going to, is to make sure that we're protecting the purchasing power of employees. We think that's important. We strike that balance as well versus sort of the taxation side, and you talked about some of the measur es we're taking to improve that indexing.

But there's other taxation levels that are certainly important to Manitobans, and I'm wondering if you'd agree with the following statement: because a sales tax is a regressive tax which impacts low -income citizens more than those who are more well-to-do. Mr. Rebeck: Well, I think the taxation side of this is–needs to be put aside. When we're talking about minimum wage, we need to ensure that employers aren't allowed to pay poverty wages.

Look, we can deal with the taxation side of the formula all we want, but poverty wages mean the government's going to subsidize those workers in some way, shape or form through other programs and services that they need to provide. Our premise is pretty simple: if you work fu ll time, you shouldn't have to live in poverty, and this minimum wage –this bill enshrines that they will always be working poor and in poverty, and that's why this bill needs to change. Mr. Lindsey: Thank you, Mr. Rebeck, for your presentation.

The prev ious speaker talked about the bulk of people, at least in his industry, being kids just looking for part -time employment. Is that, in actual fact, who the majority of minimum wage earners are? [interjection] Mr. Chairperson: Mr. Rebeck. Go ahead. Mr. Rebeck: In the province of Manitoba, over two thirds of minimum wage earners are over the age of 20. So they are adults who are in the workforce. Over half of them have been at their job for more than a year and have not seen an increase. * (18:30) So thos e–the statistics speak for themselves.

People can keep repeating that it's kids living in basements, but that's not the reality that working families are facing, and the majority of the 30,000 working poor in our province earning minimum wage are adults. Mr. Lindsey: Thank you for that. It's nice to see some statistics, not just some vague generalizations. Do you know of any statistics in Manitoba that would talk about how many businesses went under because of previous increases in minimum wage? Mr. Rebeck: Yes. I'm not aware of any businesses that have gone under citing minimum wage as their sole reason for that occurring.

I don't know if such statistics exist. I suspect if they do, there's very few, if any. Minimum wage earners spend every penny they earn, right back in the local economy, and often businesses that employ minimum wage earners receive some benefit, as well, when minimum wage goes up, and I worry that modelling often doesn't include that. Mr. Lindsey: I'll just take this opportunity to thank you for coming out and presenting on this bill and saying some really sensible things that I hope the government is going to listen to about indexing isn't bad; it's where you start the indexing from. So thank you. Mr.

Chairperson: If there's no other further questions, thank you, Mr. Rebeck , for your presentation. The next person on the list that's an out -of-town presenter is Ms. Michelle Gawronsky, president of MGEU, Manitoba Government and General Employees' Union. Ms. Gawronsky, do you have any materials that you want to pass around? Ms. Michelle Gawronsky (Manitoba Government and General Employees' Union): I do. Mr. Chairperson: Okay. You might get them – someone to pass them.

156 LEGISLATIVE ASSEMBLY OF MANITOBA May 23, 2017 You can proceed with your presentation, Ms. Gawronsky. Ms. Gawronsky: Good evening, Chairperson and honourable members. Again, my name is Michelle Gawronsky and , yes, I am the president of the Manitoba Government and General Employees' Union. I'm pretty sure everyone in the room knows that by now. The MGEU is the largest union in Manitoba, representing over 40,000 Manitobans who deliver a wide variety of public services across the entire province. I'm here tonight to voice my concerns over Bill 33.

I'm trying to understand why the government is rushing this bill through and overlooking a number of misconceptions when it comes to minimum wage and who it affects. Bill 33 was given first reading on May 15th, last Monday; second reading on May 18th; and now here we are, May 23rd at the legislative committee. The government is racing ahead with changes that will lock full-time minimum wage earners into a poverty wage. I certainly would have welcomed the oppor - tunity to meet with government to discuss meaningful changes that would address minimum wage problems.

In fact, should the government want to listen, I'm still more than willing to come down and talk to anyone about it. The main issue the MGEU has with Manitobans' minimum wage is that we still continue to have families living in poverty, struggling to make ends meet. No one should be struggling to keep food on the table or clothes on their children's backs if they work a full-time job. Employment should be a ticket out of poverty, nothing less. Tonight, you will no doubt hear a lot of statistical information regarding minimum wage and right now, I'd like to talk about a few statistics that stick out to me.

Sixty per cent of minimum wage earners are women. This, quite possibly, is one of the most troubling matters when it comes to the minimum wage. In 2017, when we continue to fight for gender equality and fair wages across the board, we continue to have more women living paycheque to paycheque. Sixty per cent–66 per cent of minimum wage earners are over the age of 20. They're not students in basements. This is another shameful statistic. It breaks the myth that the majority of those earning minimum wages are teenagers.

In reality, those taking home minimum wage are actually working families that often face the choice of putting food on the table or paying a phone bill. Fifty-three per cent of minimum wage earners work for large corporations, a hundred- plus employees. Far too often, we are told that minimum wage is something that only those working in small businesses face. That simply is not true and, once again, shows that unless government shows leader - ship, minimum wage earners will continue to struggle. Forty-three per cent of minimum wage earners work full-time.

It wasn't too long ago that my family would have fallen into this category. Can any of you imagine working a 40-hour workweek only to worry about how to pay the mortgage, buy your groceries, feed your kids, pay that hydro bill? This is a reality that working families live with daily. Last year, when the Manitoba government froze minimum wage in the province, the Premier (Mr. Pallister) and Cabinet took a 20 per cent wage increase. This was a tremendous blow to those living on the poverty line, depending on that bump in the minimum wage.

Bill 33 gives what I would call not even a minimal increase to those struggling to get by; 15 cents is hardly an increase. You're lucky if you can buy a candy at the corner store for that amount. I strongly encourage this government to reconsider Bill 33 and pull it immediately. I would hope that we could all come to an agreement that working full time for a living shouldn't have you struggling to make a living. We all know that Manitobans earning money are spending money. It's common sense and good for our economy. Mr. Chairperson: Thanks, Ms. Gawronsky. Are there any questions for the honourable minister? Mr.

Cullen : Yes, thank you very much, Michelle. Good to see and thanks for making a trip into town and making your presentation. In terms of consultation, we did send this legislation over to–the concept of minimum wage to the Labour Management Review Board for their input. We did hear back from them, for sure. We also, through our fairly extensive prebudget consultation–we had clos e to 20,000 submissions, some dealing with the minimum wage and different areas and different ways of looking at minimum

May 23, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 157 wage, and we also looked at what other jurisdictions were doing across the country in terms of the indexing formula. So there was certa inly some extensive consultation. It did take a little bit of time to review our options, and maybe that's a little why – in terms of why the legislation didn't show up earlier.

But, in terms of taxation, I don't think we can turn our minds away from taxat ion, because whatever Manitobans make they're going to be taxed on it, and when the provincial sales tax was increased back in 2014, we saw food bank usage increase by 2.4 per cent. So it certainly appears that with increased taxation there's certainly an impact on poverty. Any comments on that? Ms. Gawronsky: Well, first of all, I'm not an economist; I'm not an accountant. I'm a mom and a grandmother who lived within minimum wage for a very long time. We raised our four children with it. So I know what the struggles can be.

As far as taxes again, my learned colleague, Kevin, said, you know, the taxes, I believe, are a piece that we would be able to discuss at another time. If you're looking at the taxes on 15 cents, the 15 cent s is only going to hurt mi nimum wage earners. The tax on 15 cents certainly isn't going to help the government coffers. So perhaps there's a better way of being able to look at things and being able to consult with the folks that actually live within the minimum wage.

I'm not sure how many folks you were able to get hold of if you did it through emails and through computer system, I would venture to guess that there are very few minimum wage earners that would've had the ability to be able to participate in your consultations that you did. Mr. Lindsey: Thank you, Ms. Gawronsky, for showing up and presenting again some facts as opposed to general comments. I guess I don't really have any questions. Your presentation really makes it very clear that 15 -cent minimum wage increase is n ot going to be overly helpful to anybody that's on minimum wages.

Do you have a sense of what an appropriate increase would've been? Ms. Gawronsky: Again, I'm not an economist, not an accountant. But, when I look at what the cost of living is, if you to ok the general cost of living and the increase to everything around us, if that was taken into consideration for the families that are struggling, the single moms that are trying to r aise two and three children be able to pay their rent, I think that might have been at least a start on where we go from there. Consult with Manitobans. Mr. Lindsey: So it would be fair to say that you're not opposed to indexing of minimum wage.

It's again where you would start indexing from to ensure that the base was suffici ent so that minimum wage earners were actually able to get out of poverty and to live. Is that a fair comment? * (18:40) Ms. Gawronsky: Yes, I agree with you there. I think if government would take a look at what would be a living wage, what would a normal family of four be able to live on. You know, they're not going to be going on trips to Tahiti or anywhere else. But, if they were able to make sure that they could meet their needs of their bills, be able to feed their families and clothe their families, and start there.

And then, if you're looking at indexing, take a look at it after that. Mr. Lindsey: Thank you, Ms. Gawronsky, and have a good night. Mr. Chairperson: Thank you for your presentation, Ms. Gawronsky. So now we'll go on to the next person from out of town, was Mr. Bob Moroz from the –as a private citizen. Mr. Moroz, do you have any materials to hand out to the committee? Mr. Bob Moroz (Private Citizen): I do not. Mr. Chairperson: Okay. You can proceed with your presentation, Mr. Moroz. Mr. Moroz: Good evening.

I'm here this evening to stand in solidarity with the hard-working women and men of Manitoba and all working famil ies. With nearly 30,000 minimum wage earners in our great province, we all must acknowledge that the current minimum wage in Manitoba is shamefully low. The current minimum wage freeze, as we've heard before, leaves full-time workers a minimum of $400 behind where they were a year ago, when taking inflation into account.

In fact, it's been shown and discussed earlier this evening that minimum wage earners in Manitoba would need to see an approximate 40 per cent increase just to make it to the poverty line. No Manitoban or any other person in this world should

158 LEGISLATIVE ASSEMBLY OF MANITOBA May 23, 2017 have to leave–live in poverty if they are working full-time. The concept of minimum wage, in my view, was originally meant to apply to students and young people looking to earn some income to help them get that–get to that next level, perhaps pay for tuition, books and basic living expenses, et cetera, while pursuing more education to find that better job or career that would lift them out of poverty. Instead, we know that most minimum wage earners are adults. We've heard before more than two thirds are over 20 years old. Most minimum wage earners are women.

This clearly adds to the child poverty problem here in Manitoba. Most have been in that same position for over a year with absolutely no increase in their hourly wage. So, ladies and gentlemen, this is not clearly about weekend money for students; this is about living wages. I am reminded of a story that I do love to share when I have a microphone in front of me. Not long ago, I had the opportunity to visit the friend of a friend who runs a very diversifi ed agricultural operation. While touring this farmer's facilities, the subject of his workers came up.

What was most fascinating to me was that this gentlema n paid his young workers well above the minimum wage. When I asked him why on earth would he do suc h a thing, his response was absolutely at the very heart of the matter at hand this evening. His view was that if he was going to take the time to teach those workers how to do the job they were hired for, it only makes sense to provide an 'incentum' –incentive for them to stay and hopefully to return the following year. By compensating his workers relatively well, he accomplished two very important things. He made this job more valuable to his employees.

They're much more likely to put in the effort that he required, as opposed to leaving for a McJob as soon as the work there got difficult. N umber 2, he instilled a loyalty in those workers who knew that they were earning a better wage than their friends who were, for example, pumping gas or flipping burgers. This farmer intuitively knew that the value of treating his employees well–he has a significant amount of returning employers–employees year after year, thereby lessening the time and the costs associated with hiring new workers each year.

Ladies and g entlemen, this is the example we should be emulating across all industries that commonly pay a minimum wage to their employees. Good jobs are the calling card of all political parties. However, good jobs are only good jobs if they lift those workers out of poverty. Indexing the minimum wage to an $11- an-hour level will not help those workers get themselves out of poverty. Bill 33 also allows government to unilaterally cancel this indexing with no consultation whatsoever either with the public or with the L egislative Assembly.

With all respect, asking the working poor to trust me is a terrible strategy. It's also been stated that societies are judged on the basis of how they treat their most vulnerable. By legislating that more than 30,000 Manitobans will continue to live in poverty despite working full -time hours, I feel that as a society we stand to be judged very, very harshly. I therefore call on this govern - ment to halt Bill 33, and implement instead a strategy that provide all of our fellow Manitobans a path out of poverty. Thank you. Mr. Chairperson: Thank you, Mr. Moroz, for your presentation.

Now will the committee be ready for questions, and I call on Minister Cullen for his question. Mr. Cullen : Thank you, Mr. Moroz, for your presentation tonight. Your comments about keeping employees here;, that really stuck–struck a chord with me. And it does that because we're trying to keep Manitobans in Manitoba working. And we talk about basic personal exemption, and that's the threshold where people start paying tax. In Saskatchewan, it's over $14,000 before people pay any tax at all. In Manitoba, it's around $9,000. And the previous government never ever indexed that basic personal exemption.

Any thought why a government would not do that? Mr. Moroz: Well, thank you for the question. And, no, I can't speak for any previous governments. When we're speaking of exemptions, the biggest issue in my view with exemptions are that it applies to everybody sitting around this table, myself included, who stand to b enefit a great deal more from certain exemptions than the folks that we are discussing here and this evening in terms of those making $11 an hour, and possibly $11.15 if they're lucky. Mr. Lindsey: Thank you, Mr. Moroz, for coming tonight and talking to us.

May 23, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 159 Just a quick question on your thoughts. If we were to accept some previous presenters' thoughts that it's, you know, first -time workers, kids, but this government has decided to allow tuition to go up by index-to-inflation, plus 5 per cent. What are your thoughts on that as opposed to minimum wage that's only supposed to go up by inflation? Mr. Moroz: Well, thank you. That is a very difficult concept to register.

To think about the cost of im - proving your educational level, on one hand going up at leas t by, as you say, the cost of living inflation, plus at least 5 per cent, but there's no possible way that during my studies that I can earn more than my $11.15, and if I'm really lucky ; maybe it'll go up to $11.30 in the near future. The gap widens. So it's very difficult to explain to young people that I come in contact with,

whereas the cost of me improving myself and improving my chances of getting ahead in this world are going up, but the ability for me to actually pay for that opportunity, whether it 's, you know, through tuition or all the costs that go into an education, it's a very, very difficult mathematical formula that–I'm no mathematician, but it seems to be a little bit unbalanced in my view. Ms. Cindy Lamoureux (Burrows): Thank you for coming out this evening.

I really liked the perspective you took on it, bringing us back to the original concept of who was minimum wage really created for, and I think you're right when you talk about perhaps it was part -time students livin g in basements of their parents' homes. But, statistically, we know that that's not the case; it's not what's happening right now. Were you consulted with, or were you aware of this online survey, was it, that was taking place prior to this bill being implemented? * (18:50) Mr. Moroz: I was not necessarily aware of it. The simple answer to your question is, no, I was not aware. Mr.

Lindsey: Thank you, Mr. Moroz, for coming out and answering questions and putting some heartfelt thought into what you had to say and hopefully the government will listen. Mr. Chairperson: Mr. Moroz? Okay, well, thank you very much for your presentation and your answering these questions. Thank you very much. Okay, we'll go to the top of the list of presenters and the next person on– No. 1 on the list is Molly 'Mcraker'–McCracken, a private citizen. Sorry, your pronunciation your name is– Ms. Molly McCracken (Canadian Centre for Policy Alternatives): Molly McCracken. Mr. Chairperson: McCracken. Okay. Ms.

McCracken, do you have any materials? Yes, you do, okay. You–please proceed with your presentation. Ms. McCracken: Thank you so much for having me this evening. I'm the director at the Canadian Centre for Policy Alternatives, Manitoba office. The Canadian Centre for Poli cy Alternatives is a non -profit charitable research institute, active nationally since 1980 and in Manitoba since 1997.

Our mandate is to produce academic, peer-reviewed research on a wide range of public policy issues of importance to Manitobans and I am pleased to provide this submission as the director and I recognize we are on Treaty 1 land in the heart of the Metis homeland. Increasing the minimum wage is an essential tool for government to protect our society's lowest income earners. The base must be raised above the poverty line and indexed at that point. Index minimum wage at the current rate of $11 an hour leaves earners $8,000 below the poverty line.

My submission is on three aspects: adequate minimum wage is in the public interest; No. 2: minimum wage increases do not harm the economy ; and No. 3, I have some recommendations. On No. 1: adequate minimum wage is in the public interest. Research shows that poverty and low income have damaging effects on the mental and physical health of individuals and families. Inadequate income leads to poor health outcomes. As researchers have found, and I'll quote: Income provides the prerequisites for health such as shelter, food, warmth and the ability to participate in society.

Living in poverty can cause stress and anxiety which could damage people's health and low income limits people's choices and mitigates against desirable changes in behaviour. As health spending is the largest budgetary expense for the Province, the minimum wage policy should reflect what is in the best interest of population health and well-being. Increasing the minimum wage above the poverty line should be a priority of the provincial govern - ment based on the Manitoba Poverty Reduction

160 LEGISLATIVE ASSEMBLY OF MANITOBA May 23, 2017 Strategy Act and the poverty reduction and social inclusion strategy. Our office co -published The View From Here : Manitobans call for a renewed poverty reduction strategy with the Canadian Community Economic Development Network in 2015. This is the second edition of this community -based strategy that dr aws on the experience of people living in poverty and those serving those who are living in poverty and it was endorsed by over 100 organizations.

It includes nine priority areas, including income security, and in reference to the minimum wage, this repor t recommends incrementally increasing the minimum wage per hour to the low -income cut-off before tax for one -parent-one-child households by 2020 and indexing it annually to the LICO -BT. This should be done within a comprehensive strategy with outcome-based targets and timelines to end poverty in Manitoba. As you know, Manitoba has a shameful problem with child poverty, the highest in Canada in 2016 at one in every three and a half children living in poverty according to Campaign 2000.

Children are poor because their families are poor and working poor suffer under inadequate minimum wage. And I have a meme here with some key stats that have already been mentioned, but you can review them there. According to provincial data, 38,600 Manitobans worked for m inimum wage in 2015 and minimum wage also has an impact on low -wage workers, 73,700 live –earn above 10 per cent the minimum wage. This is about 18 per cent of all workers. Who are these Manitobans? These are people we all rely on every day, such as retail store workers, building cleaners and food service workers.

We know low wage work is precarious. Research shows that hours of work are unreliable; service jobs require–are required to make ends meet with no benefits or unpaid time off, and these are members of our community that our struggling, which impacts their health and well-being. Minimum wage policy, as it stands, is leaving people behind. The 2016 budget failed to signal even an inflationary increase. That means that earners earned $400 less in 2016- 17 due to rising cost of living.

The current proposed increase of 15 cents would result in $312 earned this year and does not make–even make up for the lack of increase last year. Minimum wage is the legal floor at which employers must pay workers and is a direct policy tool for improving wages. Compare this to the personal income tax exemption. The Province increased the personal income tax exemption; it only resulted in $16 more in the pockets of people in 2016-17 and $15 in the pockets of lowest income people in '17-18.

This is a loss of $26 million in the past two years to the provincial Treasury through forgone revenue from taxes, because we all receive more taxes back from this income tax exemption, and there's no plan to replace this lost revenue to the Province. My second point: Minimum wage increases do not harm the economy. If we look over time and across Canada, increasing the minimum wage does not result in job losses. Economists Jordan Brennan and Jim Stanford did a comprehensive review of a ll provincial minimum wages and employment changes from 1983 to 2012.

They found no consistent evidence that minimum wage affects employment levels. They found that employment, job loss and creation are determined by larger economic factors, not minimum wage policy. Economist David Green finds the benefits of raising British Columbia's minimum wage to $15 an hour through a series of pre -announced stages has benefits that far outweigh the likely costs.

Claims that such an increase will lead to massive job l osses in low-wage sectors of the economy are not credible, says Green, as the large job -loss impacts predicted by some opponents of minimum wage increases misrepresent the existing economic research. Green writes, in reading and using that research, it is important to recognize that estimates showing job-loss effects on minimum wage increases apply only to teenagers. Estimated effects for all young adults and adult workers range from insignificant to non-existent.

And we can look to British Columbia in 2011; they made a 28 per cent increase to the minimum wage to pet –catch up for 11 years of a freeze to the minimum wage. This did not result in job losses for adult minimum wage earners. And for those 15 to 24, employment declined slightly, only by 1.6 per c ent. Interestingly, over the same time period, the number of young people 15 to 24 who became students increased by 1.1 per cent. So we can presume that, likely, minimum wage earners, young people, returned to school, which improved their earnings in the long run.

I need to note here that it's important that young people struggling with rising tuition costs would also

May 23, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 161 receive an increase to the minimum wage. There should be no two- tiered minimum wage, and this is discriminatory. Okay. Two- tiered minimum wa ge is discriminatory, and it is based on the type of work and in some –as it is based on the type of work or, some instances, age. When considering where to locate or if to relocate in Canada, businesses take into account many factors, including the cost of inputs, goods, utilities, insurance and labour.

Low -wage employers dominate service sectors such as restaurants and realtors and must stay close to the consumers that support their businesses. Minimum wage does not result in business flight. Economic de velopment relies on consumer spending. Higher wages feel–feed back into stronger demand and more jobs. Minimum wage earners spend in the local economy on basic goods and services, not abroad. A higher minimum wage is good for businesses, leading to lower t urnover rates, reducing costly searches to fill positions, training costs and employee turnover.

Number 3, recommendations: Based on research in The View From Here and Make Poverty History, Manitoba's priority policy areas for action, we call on the provi ncial government to, No. 1, increase the minimum wage to the low -income cut-off before tax measure, $15.53 in 2014 dollars, through a series of pre-announced steps by 2020 and then indexed to the LICO-BT; not introduce a two- tiered minimum wage; develop a comprehensive strategy to end poverty in Manitoba with targets and timelines, and this should include a jobs -and-training strategy for those who are able to work for pay; and No. 4, continue to make data on minimum wage earners publicly available on an annual basis such as the profile of minimum wage earners compiled by the Labour Management Review Committee.

Thank you. Mr. Chairperson: Thank you, Ms. McCracken. Just want to–before we continue, we–as you had been registered, we have you registered as a private citizen, but meanwhile you sent –you gave us –the committee–you're representing the Canadian centre of policy alternatives, and you sent the materials out– Floor Comment: When I called, the Clerk told me that I could– Mr. Chairperson: Ms. McCracken. Ms. McCracken: –oh–that I could speak and mention where I'm working, and we also have another person from our office speaking tonight.

They registered to the name of our organization when–that's what the Clerk told me to do. * (19:00) Mr. Chairperson: You also–and, Ms. McCracken, you also sent your information out based on your organization, too, so that's why we want to clarify so that– Ms. McCracken: Okay. It's my first time presenting, so– Mr. Chairperson: Okay, sure. Is it –will to –the committee to agree to have her presenting the same materials –representing the Canadian centre of policy alternatives? [Agreed] So go ahead. We'll start with questions, and we'll have the honourable minister ask you the first question. Mr.

Cullen : Thank you, Ms. McCracken, for presenting tonight. We do appreciate your presentation. I will say that we're not looking at any further tiering of indexing outside of what's there, in turn– in–tiers of minimum wage outside of what's already there. So I appreciate that comment. I wonder –we talked, and you raised the basic personal exemption in your presentation, and, clearly, there's a variation across the provinces. I know I referenced Saskatchewan –over $14,000, before people started paying tax; here, it's in that $9,000 range.

I know last year the government indexed that for the first time in a long time, and it took about 2,200 Manitobans right off of the payroll. I wondered if your organization has done any research in terms of, you know, the variation in minimum wage versus the variation in the basic personal exemption and actually how much money people actually keep in their pockets. Ms. McCracken: I wrote a three -pager on that that I'm happy to share with you.

So the lowest income earners, including minimum wage people, r eceived just $16 back on their taxes; by just an inflationary increase to the minimum wage, which didn't take place last year, it would have put 400 more dollars back in their pockets.

162 LEGISLATIVE ASSEMBLY OF MANITOBA May 23, 2017 So, as you go up the deciles of earners, middle and upper earners mak e way more back on the basic personal exemption–between $350 and $550 that's saved in their taxes –and that's foregone revenue that Manitoba's not replacing. We're not raising taxes in any other area, although you could do that. And we're a different provin ce than Saskatchewan. We have different resource sectors. We don't have potash, for example. So I don't think we should have a race to the bottom in terms of comparing ourselves with our neighbour.

We are unique, and we need made-in-Manitoba solutions to deal with our challenges. We have the highest child poverty rate in Canada, persistently, and that is a serious problem, and we need revenue–targeted revenue redirected back through a poverty -reduction strategy to deal with it. And that's why we're concerned that the basic personal exemption got rid of revenue to the province, and there's no plan to replace that, and we're going to– you know, there's already program cuts that are taking place. Mr. Allum: Ms. McCracken, thank you so much for coming out toni ght.

It's been quite educational, I think, for all of us around the table tonight. I'm curious about your very good recom - mendations at the end, that talks about increased minimum wage to the low -income cut-off before tax measure or LICO-BT. Could you just give us a quick 60- second overview of LICO versus Market Basket Measures versus LIMs? Help us to understand which of those is the best gauge or measure for us to utilize as we think about these issues. Ms. McCracken : Certainly. There's a number of measures and they all do different things.

And, for the view from here, because we were comparing back a number of years, we were using the low-income cut-off before 'taskes' wages are earned and then you get taxed on them; that's why I used before tax. And so that's why that was framed and also connected to the actual cost for a single parent with one child –so they no longer live in poverty, because nobody working full time should be earning a poverty wage. So, certainly, we could have –I think all the measures have different purposes and, in this instance, we used the LICO-BT–so. Ms. Marcelino: Thank you, Ms .

McCracken, especially for that explanation that indexing the earnings–the annualized earnings for low income only gave them $16 a year benefit versus those who have higher incomes, got more than $500 benefit;

whereas a minimum wage would give them $400 more in their pocket. Our colleagues across the way are touting the beauty of indexing the–their–the salary, or removing 22,000 from tax rolls, when those 22,000 only got $16 a year versus if they had increased minimum wage last year, those people would have gotten $400. Thank you for pointing that out. Ms. McCracken: They're out of scale, the two approaches. Mr. Chairperson: Okay, time's –the time is up for the question, for five minutes. So we'll call on the next presenter. Thank you, Ms. McCracken.

The next person that's –is the second person on the list is Josh Brandon, and he –from Make Poverty History Manitoba. Mr. Brandon, do you have materials to pass around to the committee members? Mr. Josh Brandon (Make Poverty History Manitoba): I do. Mr. Chairperson: Okay, we'll get someone to pass them. Okay, you can proceed with your presentation, Mr. Brandon. Mr. Brando n: Good evening. My name's Josh Brandon. I'm the chair for Make Poverty History Manitoba.

We're a coalition of groups and indi - viduals including labour, faith groups, anti -poverty groups, business community and the general public working in Manitoba to end poverty. And I'd like to thank the minister and the committee members for the opportunity today to present on Bill 33, The Minimum Wage Indexation Act. Minimum wage for our members, and we did a consultation of over 100 community groups, looking at what are the top issues to address in developing a comprehensive poverty strategy, and minimum wage was one of the top issues that our members wanted to see addressed.

And so we're really thankful for the opportunity to present here today and we have some serious concerns about this bill that I'll be presenting today.

May 23, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 163 Setting minimum wage standards is one of the most important levers that the provincial government has to ensure that fair and adequate wages are paid to all workers, including the most vulnerable. Government has a responsibility to set a fair and right balance between fair wages that ensure an adequate standard of living for all workers, and a predictable and equitable labour market for employers. This legislation does not strike that fair balance, but instead will entrench minimum wage at a low level that will keep workers in poverty.

Workers will see their purchasing power stagnate as a result of this legislation, and at times of recession when workers need help the most, these standards w ill decline as wages are frozen. Moreover, the relative com - pensation for minimum wage workers will decline, increasing relative poverty among this group, compared to Manitobans as a whole. And, finally, this legislation goes too far in extending the powe rs of the Lieutenant Governor - in-Council to make exceptions to the application of minimum wage. Others today have made presentations detailing the composition of minimum wage workers in Manitoba.

We know they are mostly adults, mostly women, largely work not at small businesses as sometimes the myth portrays, but at companies with a hundred or more employees. This is important to note since many minimum wage workers are the primary income earners in their household. At Make Poverty History Manitoba, we calculated it would take an income of $15.53 per hour in 2014 to lift a single parent with one child above the LICO before tax cut off. This means that a minimum wage worker full–working full time would have an income more than $8,000 below the poverty line for a family of two.

Because LICO increases each year at the same rate as CPI, this legislation will entrench the minimum wage as a poverty wage in Manitoba. If we look back historically, minimum wage in recent years has increased faster than CPI over the period 1998 to 2015 through three different premiers and different governments, and during this period it increased at a rate of approximately 4 per cent per year on average, and that's more than double the rate of CPI. But, even with these increases, the minimum wage remains far below the poverty line, so now is not the time to take a pause on increasing the minimum wage.

Instead, we need regular planned increases at a rate above CPI for several years to lift the minimum wage above the poverty line. * (19:10) If, over this period–in fact, if we did the calculation back–if this legislation had been in place since 1998, for example, if wages had increased at the rate mandated by this legislation, minimum wage today would only be $7.40 per hour. That's over $3.60 lower than the current minimum wage and would have cost workers as much as $7,000 annually, compared to what they currently earn. This is an indication of the dramatic effect this legislation could have in the long term.

And in your– in the copy that I circulated, I gave a chart explaining that. Aside from starting at a –too low a base, using the CPI as an inflator will actually intensify relative poverty in Manitoba. Over the past 18 years, median wages have on average risen more than 1 per cent fas ter than the CPI, a cumulative difference of over 30 per cent. Every generation of workers in Manitoba is more productive than the previous one, so average incomes do tend to increase faster than the rate of inflation.

So this shows that this legislation w ould leave minimum wage workers further behind, increasing inequality in this province. Studies show that relative inequality is an important social determinant of health. Again, this legislation will take Manitoba in the wrong direction. We are pleased that this government has so far maintained minimum wage as a based floor for all branches of the labour force and not introduced a two-tier system for young workers or for lower wage servers in the hospitality sector as some other provinces have implemente d.

Where two- tiered minimum wages have been introduced, they've been a disaster for workers. Servers do not always have reliable access to tips, and many young people find themselves trapped in substandard wage environ- ments. These are not policies we should import into Manitoba. We do support government setting higher standards for some classes of employee such as security guards, as is currently authorized under the act. But we hope that minimum wage will continue to be set as a floor for all workers. In this regard, we do express concern that the language in this bill under

section 5(1) extends the power of the minister and council to establishing rules respecting the application of minimum wage

164 LEGISLATIVE ASSEMBLY OF MANITOBA May 23, 2017 provisions. While the intent may not be to create a sub-tier minimum wage at this time, we are concerned that this provision could be used in the future to deny the protection of minimum wage legislation that should be enjoyed by all workers as a minimum protection. Given the problems with this legislation, we hope that the government reconsiders the legislation and sets minimum wage at a level above the poverty line before implementing indexation.

In the mean- time, the Province should implement planned incremental increases to raise the minimum wage above the poverty line to bring all Manitoba workers above the poverty line. Thank you. Mr. Chairperson: Thank you, Mr. Brandon, for your presentation. Do any members of the committee have any questions for the presenter? Mr. Cullen: Yes, thank you, Mr. Brandon, for your presentation–certainly appreciate it. And I know when it comes to poverty rates in Manitoba, we certainly have a lot of work to do. And we certainly look forward to continuing that dialogue for sure.

I just wondered: In terms of your analysis he re, did you–and really purchasing power is about after - tax dollars, so did you have a look at comparisons relative to–Manitoba relative to other jurisdictions? Mr. Brandon: Well, we know that poverty in Manitoba, depending on how we measure poverty, is–in every respect is unacceptably high. In some indexes it's –it shows as being the highest rates of poverty.

We know that Manitoba needs to do much more to reduce child povert y, in particular, and we know that many Manitoba workers have children – minimum wage workers have children, and so this would be a really important way that Manitoba could reduce child poverty that we know is unacceptably high in this province. Mr. Lindsey: I've got three questions, but I'm going to roll them all into one for you. From your position at Make Poverty History, do you believe that people living in poverty , their children have worse educational outcomes? Do you believe that people living in pov erty have worse health outcomes?

And do you think this particular 15-cent-an-hour raise in minimum wage will help any of those outcomes get better? Mr. Brandon: Thanks so much. We know that relative poverty is a really important indicator of–social determinants in health. And so that means that, if you're working below the poverty line, you're going to have less access to health care, you're going to have less access to education. We know that workers living in poverty are suffering the consequences of t hat right now.

And what this bill does is actually increase those – that relative inequality and it fixes the minimum wage at a poverty wage, and so that's unacceptable. We need to do more to increase minimum wage above the poverty line and not set it as a poverty wage in Manitoba. Hon. Scott Fielding (Minister of Families): Thank you very much for your presentation. And I appreciate your passion and–especially about this topic. I know you're your passionate about the minimum wage. My questions are kind of related –as you mentioned, kind of keeping more money in people's pockets. The government has made substantial progress.

I think you agree with things like not clawing back the CCB, increasing Rent Assist by upwards of $636 million in this past budget, and taking, as the minister had mentioned, about 2,100 people off the tax rolls altogether with the basic personal exemption. So could you comment of how you think that plays a role in terms of the –like, is that a positive aspect, do you think, for the amount of people that are living in poverty? Mr. Brandon: Certainly, government programs like Rent Assist, the federal Canada child benefit, are really important supports for low -income families.

But I think all Manitobans would agree that the best route out of poverty is through a well -paying job, and we need to do more to ensure that all jobs in Manitoba will pay enough to get workers out of poverty. You mentioned the increase to the basic personal exemption. In some provinces it is much higher than in Manitoba, but even a $4,000 increase in the basic personal exemption to bring Manitoba workers up to the level of where they would be in Saskatchewan, for example, would actually only increase the incomes for a low-wage worker in Manitoba by $68.

May 23, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 165 And you know, t hat's only enough for a few days' food for most families. On the other hand, that would cost the province over $300 million. And I think, if your government is able to find $300 million in the budget, I think here at Make Poverty History Manitoba, we coul d think of a lot of priorities that could be put forward towards spending that for reducing poverty that would be more effective. Mr. Chairperson: The five minutes is up, Mr. Brandon. So, unfortunately there's more questions here.

But thank you very much for your presentation, and you're answering these questions. Thank you. Sorry, Mr. Brandon go ahead. Mr. Brandon: Thank you. I'd be happy to answer any questions you have at another time. Mr. Chairperson: Okay, thank you. Okay the next presenter is –on–No. 3, Jonathan Alward. He's from the Canadian Federation of Independent Business. Mr. Alward do you have any materials to hand out to the committee? Please proceed to your presentation, Mr. Alward. Mr. Jonathan Alward (Canadian Federation of Independent Business): Thank you, and good evening, everyone.

On behalf of the Canadian Federation of Independent Business, thank you for the opportunity to present the small business perspective on Bill 33, The Minimum Wage Indexation Act. For those of you who may not possibly know yet, my name is Jonathan Alward, and I am Manitoba's Director of Provincial Affairs at CFIB. And at CFIB we are passionate about small business because of their massive contributions to our economy and employment in our communities.

We believe the small businesses deserve a strong voice in government decisions, and CFIB provides a reasonable, credible, and effective way for small businesses to participate in our political process , just like big businesses and unions do. * (19:20) CFIB represents 109,000 independently owned and operated businesses across Canada, including 4,800 right here in Manitoba. We're strictly non-partisan, non- for-profit organization, and our members are located in every region of the province and in sectors that closely mirror the province's economy.

Every CFIB policy position is set by direct feedback from our members through accurate and regular surveys, which operate under a one -member, one-vote system. Our views are strictly based on the results of these surveys, so it is with great confidence that I can present here, on behalf of our 4,800 members, and express their concerns and, therefore, opposition to bill–excuse me–Bill 33. Improving the lives of low -income earners and their families is a laudable goal that we all agree on. However, the real question is: what are the best ways to assist low -income earners?

Increasing the minimum ways –minimum wage, as others have mentioned before, is a blunt tool and one of only – one–excuse me–only one of many tools that policy - makers have available to help improve the lives of low-income earners. Indexing the minimum wage to inflation, like Bill 33 proposes to do, does not accomplish this goal. While indexing the mini mum wage to an economic indicator is an easily accessible tool for govern - ments, entrepreneurs worry that this approach assumes affordability for their business and does not reflect current economic conditions.

The overwhelming majority of small -business owners already pay well above the minimum wage, as others have mentioned here before, as they weigh the education, experience and skills of their employees against their company's ability to pay. However, we know that Bill 33 hits small businesses in the retail and hospitality sectors the hardest. For those who say minimum wage hikes don't have a negative impact, they should talk to the owner of their favourite local restaurant or grocery store.

We're not talking about multibillion -dollar nationals that ca n absorb the cost; this is about your neighbourhood hardware store, your florist and your local hairdresser. A recent CFIB survey found that there are no serious economic consequences that hit those who are supposed to benefit from the minimum wage hike. Forty-three per cent of Manitoba's small - business owners were forced to raise prices of their products and 'servitives' –excuse me–products and services. Thirty-five per cent of owners had to reduce the hiring of youth and/or inexperienced workers.

Twenty-two per cent had to reduce the hours of their staff, and another 22 per cent had to reduce their

166 LEGISLATIVE ASSEMBLY OF MANITOBA May 23, 2017 number of employees, and, importantly, one quarter of all owners were forced to delay expansion plans. Given the significant negative impacts experienced by small -business owners in Manitoba, entrepreneurs have outlined which policies work well to help low -income earners while mitigating impacts on business. CFIB has always advocated for governments to focus on more practical and effective ways to help low-income earners.

When surveyed, the majority of small-business owners believed that the best ways for government to improve the standard of living for low-income earners were through tax and training measures. These are aimed at helping employees keep more o f their hard -earned–excuse me–keeping more of their hard -earned money and improving opportunities for advancement out of these often stepping-stone jobs.

The Manitoba government must adopt a common sense approach that is part of a strategy that will truly assist low -income earners , such as providing income tax relief, ensuring that low - income earners keep all of their earnings. Why not ensure a minimum wage earner –why not ensure that minimum wage earners can pay no income tax at all? Eighty-one per cent of Manitoba's small - business owners supported reducing personal income tax rate for these low -income earners. And another 71 per cent supported increasing the basic personal or spousal exemptions for Manitoba's low -income earners.

These results are not su rprising when looking at the taxes facing Manitoba's low-income earners. The government took a positive step when they indexed the basic personal exemption and personal income tax brackets to inflation. But Manitoba's 2017 BPE of just $9,271 still lags wel l behind the national average. By contrast, as has been mentioned here, workers in Saskatchewan can claim over $16,000 this year before they start paying taxes. The Premier (Mr. Pallister) has committed to increase the BPE to the national average, or roughly $11,000, but more can and needs to be done.

Additional policy tools that were supported by small-business owners include increasing tax credits for low-income earners, encouraging and rewarding workplace training by improving the skills sets for low-income earners. Forty-nine per cent of small -business owners supported investing in training for low -income earners to upgrade their skills, and low -income earners who want to upgrade to better paying positions should be given the opportunity to do so. And we believe that small businesses should be given more assistance to provide additional work- place training.

And, to achieve these goals, we've recommended two separate tax credits. One would be introducing a tax credit payable to employers and one would be introducing one payable to employees to help accomplish these goals. When you look at the least effective ways, small-business owners have outlined that introducing moderate, regular increases to minimum wage, kept in line with consumer prices, such as Bill 33 proposes to do, was only supported by 27 per cent of Manitoba's small -business owners.

While indexing the minimum wage to an economic indicator is an easily accessible tool, as mentioned, it's important to reiterate that relying on trailing indicators, as this bill proposes to do, does not reflect the current market conditions and assumes affordability every year. We're also concerned that a decision to automatically index the minimum wage will essentially give a green light to an annual minimu m wage hike regardless of what is happening in the economy.

What is more frequently cited reason for increasing the minimum wage is often how to help low-income earners, but a recent editorial said it best: indexing the minimum wage is not the best way to help low -income earners. Rather than trying to manipulate wage rates, the government should focus on allowing workers to keep more of what they earn. And we certainly couldn't agree more. Introducing a significantly higher minimum wage rate–at least $2.5 0 per hour –was only supported by 3 per cent of our small -business-owner survey.

So clearly, small businesses understand that minimum wage increases often have laudable intentions. However, there are often serious unintended consequences to these actions. T hat is why only 10 per cent of Manitoba's small -business owners agree that the government -mandated minimum wage increases are the best way to increase employment and wages for low -income earners. Consequentially, entrepreneurs have outlined several policies that provide more effective yet less harmful ways for government to help assist these low-income earners.

If the Province moves forward with minimum wage increases, CFIB has called on

May 23, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 167 the government to introduce measures to help mitigate the negative impacts of the annually indexed minimum wage, such as introducing a training wage for inexperienced workers, similar to what's happened in Nova Scotia, or a gratuity wage for workers who earn tips, similar to British Columbia and I believe Ontario. Over 2 2 per cent of workers earning minimum wage are in the accommodation and hospitality sectors and many of these workers earn tips, so a gratuity wage to help balance the fact that many are earning much more than minimum wage would be helpful.

A training wage would help offset some of the costs associated with new worker training and turnover. As one small -business owner said: I wish we had training wage, perhaps for one to three months, as many students have never worked before and need a lot of training before they can be productive. Not surprisingly, 81 per cent of CFIB members agreed that most employers should have the option to pay for training wage to employees with no experience.

Given the shortcomings of minimum wage policy, it's important to stress that no government should consider increasing the minimum wage until it's exhausted its ability to help low -income earners through tax relief and training initiatives, especially for key sectors affected by minimum wage policy, such as the accommodation an d food services and retail. However, if governments choose to make adjustments to the minimum wage, CFIB urges them to evaluate further changes and minimize the negative impact on the employees and the employers.

Governments must demonstrate that they consider all alternatives prior to increasing the minimum wage policy and be required to provide written documentation and publicly release it. Again, improving the lives of low -income earners and their families is a laudable goal that we can all agree upon. However, to answer the question– Mr. Chairperson: Mr. Alward, you have one more minute. Mr. Alward: –what are the best ways to assist low-income earners, it's clear that increasing the minimum wage is a blunt tool, while many better tools are available to help policy makers improve the lives of low-income earners.

Small-business owners understand that there are better alternatives to minimum wage increases, so as CFIB always advocated for the government to focus on more practical–excuse me, practical an d effective ways to help low -income owners such as providing additional tax relief and improving training oppor - tunities. As the big voice for small businesses in Manitoba, CFIB will continue to be a strong advocate for the fair treatment of small busine sses and the effective policies to help them succeed and grow and we look forward to seeing changes necessary to Bill 33 before it receives royal assent.

Once again, thank you for the opportunity to present this evening. Mr. Chairperson: Thank you for your presentation, Mr. Alward. There's a five -minute question period, so Mr. Lindsey–oh, first Mr. –the honourable minister. Out of the corner of my eye, here. Mr. Cullen : Thank you, Mr. Alward, for your presentation tonight and thanks for correcting my error, I didn't realize Saskatchewan was up to $16,000 in basic personal exemption before people start paying tax. That's pretty disturbing, that's a $7,000 difference there before individuals start paying tax, so clearly we have some catching up to do there.

In terms of –I know a recent survey that CFIB had showed Manitoba business had the –in terms of business optimism, was the most optimistic across the country and that's certainly exciting for us. I guess maybe that reflects the 6,000 net full -time jobs that Manitobans have created since the first of the year. That's also pretty exciting. * (19:30) I just wondered how important creating the right foundation is. As far as from a government perspective, I think it's our goal to create a foundation for busines s and then business can help attract employees that way.

And, clearly, minimum wage plays a part of creating that foundation. Any comments on creating the right foundation? Mr. Alward: I certainly appreciate that. Those business barometer stats that you 're referring to are from earlier in the year, I believe in January, and it's actually decreased slightly the last three months, although, to be fair, the next one is coming out very soon, and we're optimistic that there's going to be a rebound. Still, it' s still much better than it was this time last year.

168 LEGISLATIVE ASSEMBLY OF MANITOBA May 23, 2017 But all that said, it is really important to lay those foundations. And, as you mentioned, the basic personal exemption is a perfect illustration of that. We have a long way to go before we can get to where Saskatchewan is. And we think it's important to take those steps to get there now before looking at new policies that are going to have a detrimental impact on the business community, like increasing the minimum wage. Mr. Lindsey: Thank you, and welc ome yet again, Mr. Alward. I have some questions about, again, your statistics that you present.

You claim that 43 per cent of Manitoba small -business owners–but, in fact, that's really 43 per cent of your members that responded to your survey, is that correct? Mr. Alward: It would have been based on 43 per cent of the respondents to the survey. Again, if you look at the numbers that we have –and certainly what we do nationally, they're very consistent, over 7,000 responses nationally –we think that they're very, very accurate and indicative of the economy. And, certainly, Statistics Canada and other organizations have reiterated that.

Even the federal government used our economic indicators in their latest budget to certainly add validity to those measures. Mr. Fielding: Yes, question. With your–I know your membership, you guys do a lot of research on not just tax policy and everything else, from your evaluation, a part of the –legislation that's a part of here, would a increase in the PST –how would that impact low -income families? Can you give a com - ment just in itself of how that may impact things, if you're looking at a basket of good and making sure that low -income Manitobans have more money simply to spend?

I don't know if you've got some comments you could make on that. Mr. Alward: Thank you for the question, and I don't have the statistics right here in front of me. I can certainly get those for you. An overwhelming majority of small -business owners opposed the PST increases when they came in.

And in no small part this is because of the impact it will have on their business, their employees, that really filters through not only is disposable income down because of this, but not every business can certainly increase their prices to compensate for that, and as a result there are definitely some economic consequences. Mr. Lindsey: Mr. Alward, you talked about creating a tiered system where people that get tips would get a different minimum wage. What percentage of your members that own restaurants keep a portion of employees' tips as an administration fee or any other scheme that they come up with? Mr.

Alward: To be completely honest, I don't know the answer to that. I can certainly give you the stats to show how many of our members are in the retail and hospitality sectors. I have the documents here, actually, if you want to see, and they very much so had more significant concerns than a lot of other businesses that are paying higher wages, say, in manufacturing, for example. I have them available here if you'd like a copy. Mr. Chairperson: Okay, well, thank you very much. The question period of five minutes is up, and want to thank you, Mr. Alward, for your presentation.

Okay, next person on the list is, No. 4, is Darcy Penner, and he's with the Canadian Community Economic Development Network. Mr. Penner, do you got any present –material for the committee? Mr. Darcy Penner (Canadian Community Economic Development Network): Just my remarks. Mr. Chairperson: Okay, Mr. Penner, go ahead. You can proceed. Mr. Penner: Thank you, and thank everyone from Mr. Chair for having me to present here today. My name is Darcy Penner. I'm with the Canadian Community Economic Development Network.

We are a national 'netmork' with over 100 members here in Manito ba, and our members comprise of co -operatives, non-profits, social enter - prises and other individuals that are all working towards community economic development in some capacity, concerned with inclusive communities and inclusive economies and as well as with sustainability. And our members know, working particularly in low-income neighbourhoods, the importance of work as a means of achieving prosperity as well as achieving community health.

A lot of our members' work goes towards supporting folks, low -income folks, so they are able to access employment. But for

May 23, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 169 employment to be a vehicle out of poverty, which is the motivation that we generally come at these supports with, it must pay above the poverty line. So, as a result, we have three separate areas that we are putting –supporting policy in this, working with our partners with The View From Here and as a member of the Make Poverty History of Manitoba coalition, as well as a policy resolution on our books that's collectively passed, seeking to see mini mum wage at a level for a single -parent and single -child household to be above low-income cut-off.

This bill, Bill 33, as it is currently written, means that, for many, employment will not be a means of escaping poverty, and that employment will mean that they remain within poverty. And to be brief –so, to summarize, our organization welcomes the increase in –the legislated increase to the minimum wage, and we welcoming the indexing of minimum wage. However, we do not believe that it should be indexed at a poverty rate, and that it actually should be indexed to the low-income cut-off. Thank you. Mr. Chairperson: Thank you, Mr. Penner, for your presentation.

We'll start with questions, and the honourable minister. Mr. Cullen: Mr. Penner, good to see you again. Thank you very much for coming down for –and making your presentation tonight. I think you're right; it's getting to people to work, really, is the fundamentals. And more people can get to work, the better their situation will be. And I think we also believe in the education component, right? You know, once we get people to work, how can we provide the incentives and the education to allow people to grow? And I know your organizations are certainly focused on that as well.

Just some comments in genera l: what–how you think–what do you think we can do as a government to make sure that those two go hand in hand to be successful? [interjection] Mr. Chairperson: Mr. Penner, go ahead. Mr. Penner: I'll get that eventually.

I think the piece that we're missing when it comes to sitting the minimum wage bill here and then looking at education over here is that, unless you're actually looking at it from a comprehensive plan of all these pieces and how they factor against each other, then you can't necessarily –we can't necessarily speak to the efficacy of one poverty - reduction measure against another because they're being made irrespective of each other, and it's not an actual comprehensive poverty-reduction plan that's in place.

So, if we were to come here and l ay out all the specific plans that's being put in place in terms of education and supporting folks that education can get them into employment, I will be very happy to see that plan in place, but I like that these decisions need to be made all in consideration of the comprehensive policy measures that have to go in place for a supportive ecosystem for getting folks out of poverty. Mr. Lindsey: Thank you for coming out tonight and sharing your views with us. Interesting what Minister Cullen talked about, encouraging people to educate and get out of poverty.

How do you think that'll work by holding the minimum wage to a level that increases slower than, say, tuition increases? Will that help people be able to access education? Ms. Penner: I would be–I'm unsure of the answer to that question. Mr. Lindsey: You're not really able to answer that question, but do you think that the 15 cents an hour that this bill proposes for an increase in minimum wage will hold people in poverty, or is there a different number that we should be looking at for the base and then possibly index it? Mr.

Penner: Our organization would like to see the minimum wage set at a level that allows a single-parent, single -child family working full-time to be above the poverty line, and then indexed to LICO from there. Mr. Lindsey: I thank you for that. I don't have any further questions. Mr. Chairperson: Any other further questions? Thank you, Mr. Penner, for your presentation. Okay, next person on our list is –No. 6 is Lynne Fernandez. She's with the Canadian Centre for Policy Alternatives. Ms. Fernandez, do you have materials that you want to hand out?

170 LEGISLATIVE ASSEMBLY OF MANITOBA May 23, 2017 Ms. Lynne Fernandez (Canadian Centre for Policy Alternatives): I do. Thank you. Mr. Chairperson: Okay. We'll get somebody to pass around. Please proceed with your presentation, Ms. Fernandez. Ms. Fernandez: Good evening.

Thank you for the opportunity to present on Bill 33, The Minimum Wage Indexation Act. * (19:40) Minimum wage workers will be relieved that their wages will not be continuing to fall behind at the same rate as they have been, but we must not be lulled into believing that the small increase proposed by the bill is going to pull low -income workers out of poverty. This is b ecause the minimum wage is in no way linked to the cost of living. Before I return to that point I wish to consider who earns a minimum wage –some of this will be repetition, but it bears repeating.

Some years ago the Manitoba Federation of Labour found that minimum wage workers are not just teenagers working at fast-food restaurants after school. They found that 55 per cent of minimum wage earners in Manitoba are adults 20 years and older; 51 per cent of minimum wage earners worked for companies with 100 w orkers or more; and 42 per cent worked for companies with 500 or more employees. At the time of the research, approximately 38,600 Manitobans earned minimum wage, and fully 73,700 Manitobans made only 10 per cent more. We need to ask if the minimum wage provides sufficient income to raise a family.

The answer to that question is a decided no. The Canadian Centre for Policy Alternatives produces research on the living wage. A living wage is different from the minimum wage in three ways:

(1) It is voluntary ,

(2) It includes the value of government programs such as The Provincial Child Care Subsidy and Rent Assist and federal programs like the Canada child benefit, and (3) it is based on the cost of living. I'm going to concentrate on (3) because that's the most important part for purposes of this discussion.

It also must be noted that the calculation of a living wage starts from a bare -bones budget and the methodology does not include the following: First of all, it does not include credit card, loan, or other debt or interest payments; it does not include saving for retirement; it does not include owning a home or savings for children's future education; it does not include anything beyond minimal recreation, entertainment, or holiday costs; and it does not include costs of caring for a disabled, seriously ill or elderly family member, and it does not –it does include–it doesn't include much of a cushion for emergencies or tough times.

Now, we calculate a living wage for a two-parent, two -family child, and for a one -parent, one-family child. We are currently in the process of updating those calculations for 2016. I can tell you that in 2013 both parents in a two -parent, two-child family would have to earn $14.07 an hour to provide this bare-bones budget in Winnipeg. The one -parent, one-child family would have to earn $17.04 an hour. These calculations were done three years ago so they will now be considerably higher.

The living wage exercise is at the moment, just that–an exercise, but it does give us a n idea of how inadequate the minimum wage is for those raising children. Clearly a minimum wage of $15 or more as recommended by Make Poverty History Manitoba would be more effective in raising families out of poverty. Critics of the greater than inflation increases to minimum wage do not consider whether or not we're starting from a point where the minimum wage provides adequate income to families.

The living wage exercise demonstrates that Manitoba's mini - mum wage has a lot of catching up to do if we're to seriously tackle poverty in this province. Surely, there can be few policy goals more important than reducing poverty. The high price of low wages can be seen in those groups where poverty is prevalent. We see low educational outcomes, high unemployment, underemployment, reliance on government social programs, such as employment and income assistance, and of course, poor health.

If this province truly wants to reduce spending in health care, one of the most pro- active measures it can take is to reduce poverty. The working poor are poor because their salaries are too low. Raising the minimum wage to $15 an hour would provide long- term benefits to everyone, including businesses. Research shows that paying a decent wage has many benefits for emp loyers, including reduce absenteeism and staff turnover; increased skill, morale, and productivity levels; reduced recruitment and training costs; and improved customer satisfaction.

May 23, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 171 Critics will insist that increases in minimum wage will cause more unem ployment. I turn to the same study that my colleague, Molly McCracken, talked about by economist Jim Stanford and Jordan Brennan to refute that claim. Stanford and Brennan did a statistical analysis of the relationship between minimum wage increases and em ployment in all 10 Canadian provinces between 1983 and 2012. It found very little evidence of a connection between higher minimum wages and employment levels. In fact, they were more likely to find a positive relation.

Higher minimum wages were often associated with higher employment. 'Significly'–significantly, they found that employment levels are much more sensitive to economic factors like aggregate demand and GDP growth than to wage regulation. Also of significance is their finding relating to lower wage sectors of the economy that include young workers. They found no consistent evidence of significant disemployment effects related to minimum wage increases.

According to the report, and I quote: "Policy makers do not need to worry about offset ting reductions in employment as significant side effects of this effort –especially if higher minimum wages are introduced gradually and regularly," and that's the key, and consistently, "and are accompanied by other measures to stimulate employment and purchasing power in the economy.

"Even to the extent that a higher minimum wage does translate into reduced profitability for employers, especially in industries which depend disproportionately on minimum wage labour, the eventual impact on employment levels will be partial and indirect. Many low -wage employers can clearly afford to pay higher unit labour costs and experience modestly lower profitability while still remaining a competitive and viable business," end quote.

So, you know, I've been listening to the presentations here tonight, and I know that it will take courage and leadership to implement a meaning- ful, greater -than-inflation increase to the minimum wage. But I really believe that history will be on your side if you do that. Thank you. Mr. Chairperson: Thank you for your presentation, Ms. Fernandez. Now it's time for questions for five minutes. Mr. Cullen : Ms. Fernandez, thank you very much for your presentation.

A previous speaker was speaking about increasing in minimum wage, as well, but, in my view, they were speaking –they were going to increase the minimum wage but also make sure that the government was getting their share through taxation. I think that was probably the previous view of the previous government. So what's your take? Y ou–obviously, you want to increase the minimum wage, but do you want to transfer that money, through taxation, to–back to the government, or do you want to allow those minimum wage earners to keep that money? Ms.

Fernandez: I don't think that –looking at t he living wage calculation –necessarily does either of those two things. In order to understand how calculating the living wage works, is you have to give value of existing government programs to people who are making–and I'm calling it a living wage; I'm not calling it a minimum wage, because the living wage is going to be higher, because we've done the calculation based on the cost of living.

But let me give you an example: If your government were to offer $10- a-day child care–in other words, subsidize child care so that it was available to all Manitobans –to Manitoban families, the living wage would come down, and it would come down substantially, because we have cal - culated how much a family has to spend on existing child-care costs in Manitoba. So, if you were to subsidize child care to a meaningful level, that would actually bring the living wage down.

So another example that might demonstrate what I'm talking about is –we're in the midst of doing the calculation right now, and we're not quite done, but we know that the living wage has not gone up nearly as much as we thought it would from 2013. Why is that? It's because of the federal government child–the child–the Canadian child benefit; that has put so much money into Canadian families that it is actually moderating how much the living wage has to go up in order for families to live a decent life. And I emphasize: this is a bare- bones budget.

We're not talking people who are living, you know, high off the hog here. This is just giving them a certain level of economic security.

172 LEGISLATIVE ASSEMBLY OF MANITOBA May 23, 2017 And–but, even with improvements to the programs that government provides, it's still considerably higher than the minimum wage, and that's the point that I want to make tonight. Mr. Chairperson: Okay, we had two hands up ri ght now. I just want to clarify here that Mr. Fielding had his hand up first and then it's Mr. Allum. Okay, so we'll have two more questions. * (19:50) Mr. Fielding: Thank you for your presentation.

Just–it's kind of a two -part question: No. 1, you know, obviously, you have some of the business lobby that's here that says , we went–you know, we went too far. You've –get some of the social activist groups come here that says we're not going far enough. Minimum wage obviously is an indicator, but there's also other indicators for people in poverty. A good example that might be the Rent Assist program, for instance.

So, for instance, in the last budget, our government increased the budget towards the Rent Assist program by over $36 million, which really has helped thousands of low -income Manitobans to pay less and supports low -income or vulnerable Manitobans that'll be part of it. So the first part of the question is: Can you answer, do you think the Rent Assist and changes that we've made, enhancements in terms of the budget, will help low -income and vulnerable citizens? And the second part of the question is in terms of the Canadian child tax care benefit.

I know the member has some friends in Ottawa that's made some changes, which is substantial, but it i s true, also, that the provincial government, in their policies, had a chance or could've –not could've, but decided instead of clawing back the amount of the CCB for a number of the programs, decided not to claw it back.

So the second part of the question is: Do you think the fact that the provincial government has not clawed back the benefits from the CCB, the Canadian child tax benefit, plus the Rent Assist program, has provided more money in the, really, in the pockets for low -income Manitobans, not just families but low -income Manitobans, a part of the Rent Assist program? Ms. Fernandez: Absolutely, it's made a difference, but it still hasn't put them at a living wage. Mr. Allum: Ms. Fernandez, welcome, glad to have you. We've heard of a lot of object ions from many presenters tonight, but I want to ask you about

section 8, what gives Cabinet the approval to rescind any increases in the minimum wage for two reasons: (1) such as a recession or a forecasted recession of Manitoba's economy. As an economist, are you familiar with the term forecasted recession, and if there is such a thing, do economists actually have a track record for predicting recessions? [interjection] Mr. Chairperson: Ms. Fernandez. Ms. Fernandez: Thank you. The 2008 great recession, right, the greatest recession since the 1930s, and had governments not interceded, it would've been a far more serious depression than the 1930s.

I think I know of three economists who saw that coming, and they were not economists that you would hear on business reports. The failure of the economic economists to predict the 2008 recession is absolutely stunning because they should've been able to see it coming, and they didn't. So the idea that we can forecast a depressi on or a recession, I mean, is clearly whimsical, to say the least. Mr. Chairperson: Ms. Fernandez, thank you much for your presentation, your answering the questions. The five minutes of questions is up, and there's probably more questions, but we only have so much time.

Thank you very much. The next person on the list is Loren Remillard. And Loren's from the Winnipeg Chamber of Commerce. Mr. Remillard, do you have any materials to give to the committee? Mr. Loren Remillard (Winnipeg Chamber of Commerce): No, I do not. Mr. Chairperson: Okay. Go ahead, Mr. Remillard. Mr. Remillard: Just a comment. For the future, it might be nice to have a chair at the table just –my blood sugar's really low, so I'm going to lean on the table, so. [interjection] No, no, that's– Mr. Chairperson: We can get a chair for you, Mr. Remillard. Mr. Remillard: I'm good.

I'm just –so, first and foremost, Mr. Chair, members of the standing committee, on behalf of the Winnipeg Chamber of Commerce's over 2,000 businesses, non- profits and charities, representing 90,000 employees in

May 23, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 173 Manitoba, thank you for the chance to speak on Bill 33, the legislation to index the minimum wage in Manitoba. I'd also like to, while there's a cavalcade of presenters before you saying various different things, I want to applaud all those that have appeared before me and afterwards for taking the time out of their evenings to come and present on this issue and I'd like to also note some of them are our members, Darcy Penner, CCEDNet. So, as the Winnipeg Chamber of Commerce, we're–we cast a pretty big tent.

Our mission is to foster an environment in which Winnipeg businesses and every Winnipegger prospers. To get a sense of who we are, we do have over 2,000 members, 80 per cent of whom are small organizations, 50 or fewer employees. I mention that because I think far too often, the discussions around minimum wage cast business as the villain in some kind of typical Hollywood film, and it's just not the case. As is Hollywood tradition, reality and fiction are a little bit different–[interjection] Thank you. I'm speaking today for a mom who started making cakes when she went on mat leave so she could pay the bills.

I'm speaking for three techy guys who came up with a way to tie e -commerce into YouTube while living in their parents' basement–and yes, they were making minimum wage. I'm here for the hipster coffee joint that's just one block down on Broadway. Many of you, I'm sure, have enjoyed the coffee at Fools + Horses. I'm here for a former football player that turned his love of shawarma into a Winnipeg go-to place. Minimum wage matters to Winnipeg's small businesses and organizations. On their behalf, the chamber applauds this legislation.

It provides certainty to our employer community, our businesses, our charities, our non- profits, and yes, it provides certainty for employees themselves. For 15 years, the minimum wage was raised every year. One year, it was even raised twice. These increases were not tied to any metric or measurement; they just happened and were passed on to employers. While the Labour Management Review Committee would be sometimes consulted, reports would come back non- consensus, but the wage would still rise. In contrast, Bill 33 provides certainty.

Employers will know six months in advance what the minimum wage increase will be. That's kind of vital knowledge for planning, and planning–you plan for success. Tying the increases to the rate of inflation in Manitoba –not the national one –should also be applauded. This will ensure our increases are more closely tied to local realities, not the cost of living in Toronto or, worse, Vancouver. I have to highlight another critical part of this legislation: provisions to not increase the minimum wage during times of recession.

It's tough enough to run a business; it's tough even in an economy that's stable and growing. This provision to respect recessionary times when many sectors also see wage freezes is vital. I'm just going to put a little caveat on that, though, which is why the cha mber would like to see the legislation stronger around this provision as to what constitutes a recession or a forecasted recession. We'd like to see some more objectivity to that and less subjectivity to that. The legislation does refer to economic indicat ors, but it is unclear as to what those indicators are.

Some suggestions include GDP, obviously, but we'd also recommend looking at provincial employment rates and increases in both public and private sector wages as well. Such a measurement would capture a more fulsome picture of the health of Manitoba economy and the prosperity in our communities, so we would urge the committee to consider that provision. Prosperous communities are what all of us want. Anyone that would insinuate otherwise is missing the big picture. The conversation on minimum wage, unfor - tunately, consumes way too much oxygen in debates around poverty reduction.

We've been at this for a while, and are we any further ahead, really? No. Minimum wage, unfortunately, is thrown out as a one-size-fits-all tool to fight poverty, like we're going to magically cure poverty with a proposed living wage. That's a giant club of a tool. In Canada, and, yes, you're going to get the statistics–in Canada, close to 60 per cent of all minimum wage worke rs live with their parents or with another family member. The majority of minimum wage workers are in either full - or part-time study. Around a quarter of minimum wage workers live with a spouse as well.

Those numbers are from Statistics Canada raw data. I will cite where I get my information from if it's independent or something that's produced by our organization, and I just really want to point that out as a point of differentiation. We will just use Statistics Canada, because if I come here and say th e

174 LEGISLATIVE ASSEMBLY OF MANITOBA May 23, 2017 Winnipeg Chamber of Commerce authored a report, whether it's valid or not seems to be immaterial; the messenger gets shot. A minimum wage increase largely benefits high school students or university students living with mom and dad. If we want to be se rious–and I mean serious–about addressing poverty in our community, we should be focused on getting more people not only earning a wage but a higher wage. There are still close to 37,000 Manitobans without a job, and we have seen a slow and steady decline in the labour force participation rate in recent years.

Governments need to look at education and training programs that will help lift people into higher wage occupations and careers. Other measures can be used as well, just as recognizing accredited indi viduals from other jurisdictions. * (20:00) From Stats Canada data, we also know that under 5 per cent of those employed in Manitoba earn minimum wage. With there being approximately 550,000 people employed in the public and private sectors in Manitoba, w e can reasonably calculate– again, we're making a calculation here–that there are around 27,500 minimum wage workers –earners in Manitoba.

As well, around 10 per cent of Manitobans earn between minimum wage and 10 per cent higher, currently up to $12.10 an hour or less. That would be around 55,000 people –again, around. From the Canadian context, we found that close to 60 per cent of all minimum wage workers are under the age of 25. However, there is a pressing need for better public data in this area. It would be nice if we were all singing from the same songbook on this, and StatsCan is independent, produces data. What we do with that data is everyone's

interpretation of it–be really nice if we just had data. I will say –and I missed one of my pages, I think–no, I didn't –one of the things, you know, has been 'bantied' around is the concept of the living wage. And our view from a Winnipeg Chamber of Commerce perspective is that we would urge the government to take another experimental look at Mincome as was done in the Dauphin area in the 1970s. Mincome provides a guaranteed income for individuals and could potentially reduce bureaucracy by reducing the amount of red tape individuals currently need to go through to receive government support.

I think if you would ask anyone involved in poverty reduction, the quilt, the patchwork of government programs, be it at the federal and provincial level, is a nightmare. And, if we can find ways to reduce that administration, I think that might actually help people in poverty as well. The overall goal of Mincome is to reduce poverty. Minimum wage was never designed as a poverty reduction tool. We'd also note that the committee–that Ontario started a Mincome pilot project this year. In May 2015, the Finnish government announced it would proceed with the basic income experiment.

Other experiments have been performed most recently in Brazil, with a citizen's basic income, and India, where the federal government has already begun replacing aid programs with direct cash transfers. But even then, when it comes to income and wages, Manitoba has been doing fairly well. Since the last minimum wage increase in October 2015, Manitoba has seen the third largest increase in average weekly wages amongst all provinces. Since October 2016, Manitoba has had the fastest weekly wage growth amongst all provinces that almost doubled the rate of the national average.

Average weekly wages have increased by almost $25 an hour in Manitoba in just a few short months. All data from Statistics Canada, raw and unfiltered. Mr. Chairperson: Mr. Remillard, you have approximately one more minute. Mr. Remillard: I'll cut it down even there. So in closing, I would like to thank the committee for their time this evening to share the Winnipeg chamber's perspective, and I really do look forward to the day –and I think this is why we support the legislation –where we're not appearing before you on this. Because as I said, this debate has consumed way too much oxygen.

We just go around and around, and I really don't see the Province moving forward with it. The conversation is divisive. It does not promote the direction we need to go into. We need to depoliticize this debate for employees, for employers, and for yourselves. We need to focus on the real issue if we're serious about poverty and the real measures that are going to deal with it. I look forward to that day where we don't have to talk about minimum wage, we're talking about continually the high- paying jobs that we all – everyone around this table wants to see in Manitoba.

May 23, 2017 LEGISLATIVE ASSEMBLY OF MANITOBA 175 Thank you. Mr. Chairperson: Thank you, Mr. Remillard, for your presentation. Before we go to questions, we have three people already–MLAs have actually asked for –put their hand up to ask questions. So we'll start with the Minister Fielding for this first question–for the first– No. 1 question, and we'll go on Mr. Allum and Mr. Lindsey. Mr. Fielding : First of all, thank you for your presentation, and it –it's not a –probably non-partisan issue, I think one of the elements of getting people out of poverty, I think everyone can agree upon, is getting great jobs.

Right, that's a big part of it. I know one of your members, I think you had mentioned Darren [phonetic] Penner was up earlier on from the Canadian Community Economic Development Network and, you know, has been a big proponent of the social enterprise which this government has taken–you know, taken a role in. In fact, we committed to this in the budget paper –or the poverty reduction paper that was attached to the budget. Can yo u comment on the role you think that social enterprise can play in terms of lifting people out of poverty, and is that something the Chamber of Commerce supports? Mr.

Remillard: Thank you for the question. Absolutely we are on record as being very strong proponents of the social enterprise model. It's the type of innovation and different way of thinking that will actually make a difference in the community. I applaud the work of Darcy Penner, CCEDNet, Shaun Loney and others that have really been pioneers , locally, in this area. And, as a chamber, we continue to support their efforts and we'd love to see an expansion of that model in Manitoba, just the tremendous success that we're seeing –if Darcy's still her

Document details

Collection	Manitoba — Debates (Hansard)
Citation	41-2-sed7
Type	hansard
Volume / chapter	41st 2nd hansardpdf sed7.pdf
Language	en
Format	pdf
Source	PROVINCIAL
Identifier	d4d616e850a14b8cf1891f503a3106f58b8ddbe5

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