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December 29, 2017 | The Agenda

A best-selling Canadian author of 14 books on economic trends, real estate, the financial crisis, personal finance strategies, taxation and politics. Nationally-known speaker and lecturer on macroeconomics, the housing market and investment techniques. He is a licensed Investment Advisor with a fee-based, no-commission Toronto-based practice serving clients across Canada.

 

Recent moaning, carping and misplaced displays of wealth envy have proven few people who come to this site have empathy for small businesses. Since the self-employed create over half the jobs, that’s weird. But it squares with the lefty-righty theme here of the last few days. Collectivists see government as good, taxes justified and entrepreneurs as selfish. Individualists want an open road so they can take the risk necessary to succeed (or fail). And they think the other guys are Marxists.

What happens in at least two provinces on Monday, however, shows the lefties are winning. At least in Alberta and Ontario.

The Dippers in AB are changing workplace law to increase the time employees can leave for family issues, make it easier to bank overtime and allow unpaid leave when someone claims to be a victim of domestic violence. In addition, the Notley government will hike the $13.60 minimum wage to $15 an hour in October. (Most of the rest of Canada is in the $11 range.)

In Ontario, where the lefties call themselves Liberals, wages are also rising – to $14 on Monday, then $15 in a year. The raise this weekend amounts to a 20% surge in pay which small business owners (and big grocery store chains) are agonizing over. “Making $15 an hour is great,” says the Ontario Chamber of Commerce, “but only if you have a job.” And many businesses say they will be cutting back employee levels or hours.

But there’s more.

Staring next week any employee in a regulated industry who has been on the job for a minimum of one week can claim 10 days of personal emergency leave, and the employer must pay for two of those days. Workers can, after Monday, claim sick time and are no longer required to produce a doctor’s note. Employees who have been on the job now get three weeks of paid vacation, instead of two – a 50% increase.

Also, when an employee says they, or their child, has experienced domestic or sexual violence, or feel they have been threatened with that situation, they can leave work for up to 17 weeks and have their job held for them. Employers must pay for at least one of those weeks. If an employee says they need to care for a family member, they can leave for 28 weeks per year, and the job must be protected. If an employee suffers the loss of a child, then they can leave the workplace for two full years, and the employer must hold the job.

Meanwhile Ontario has said it will adjust its laws to allow new parents to take 18 months off work to dovetail with the federal law that came into effect this month allowing EI payments to be spread over a year-and-a-half. That means employers will have to keep jobs open for that extended period of time, and workers will not have to inform them if they plan to return until it expires.

Well, I can hear the work-life-balance crowd applauding such changes. Family, babies, health, compassion, dignity, quality personal time – these are the most important aspects of existence, they believe. Why should profit wipe them away?

But business owners, entrepreneurs, corporations and the self-employed see it as an assault. Forcing a 20% wage increase on people ain’t the role of government, they allege, and is completely divorced from business conditions. Allowing employees weeks, months or even years of leave time when a job has to be held open is costly, impractical and sometimes just impossible. This will raise costs, raise prices, reduce profits, cut jobs and whack retail businesses at a time they are already under attack from online competitors – who don’t pay people to serve coffee or wash lettuce.

As a result, the Metro grocery store chain says it will be replacing cashiers with more automated checkout stations. Loblaws is in the midst of an employee slaughter as the cost of staffing every min-wage jobs increases by $7,000 over two years. In the last few months there have been warnings of big job losses. Ontario’s Fiscal Accountability Office figures 50,000 will be punted. The Chamber of Commerce and the Retail Council claim it will be 185,000 who get the axe. Nobody – not even the government – claims any jobs will be created.

Ontario retorts it is cutting the business tax rate by 1% in order to compensate. This will mean an operation managing to clear $100,000 in annual profit will save a thousand dollars. Unfortunately, most businesses in the province make a fraction of that. A vast number just try to break even, paying a living income to the person who took the risk to start it. Of course, now the federal government says that entrepreneur cannot share that income with their spouse, despite his or her contribution, further tightening the screws.

Is this how we bridge the wealth gap?

Would you start a business today?

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December 29th, 2017

Posted In: The Greater Fool

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