Minimum wage rising to $15 in P.E.I., but advocates say that’s not enough

Head of Charlottetown Chamber of Commerce says businesses already struggling.

Prince Edward Island’s minimum wage will be going up to $15 an hour on Sunday, but social advocates say the increase doesn’t go far enough for people in the throes of poverty.

Starting Oct. 1, the minimum wage will be up by 50 cents an hour from $14.50.

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This is the second of two increases planned for the year after the Employment Standards Board’s yearly review recommended that the government move more quickly toward its $15 minimum-wage goal because of the pain of high inflation. At the beginning of 2023, wages went up from $13.70 to $14.50.

That’s nominally a $1.30 increase. In real terms, the 3.5 per cent inflation rate in the last year means a person who earned $13.70 an hour last August would be making the equivalent of only 78 cents more in August 2023.

Inflation is measured by the Consumer Price Index, which tracks the overall change in consumer prices over time by keeping tabs on what a basket of common goods and services would cost.

Given how much more things are costing, Mary Boyd, co-ordinator with the MacKillop Centre for Social Justice, says the pair of increases in the minimum wage aren’t enough.

In 2020, a report by the Canadian Centre for Policy Alternatives determined the living wage for someone in Charlottetown was $19.30 per hour. The minimum wage at the time was $13.

“You can imagine how much more everything has increased for all families and all workers,” Boyd said of the three years that have passed since then.

Of the new $15 minimum wage, she said: “At this point it looks very, very inadequate, and it’s going to be very difficult for people as it is. It’s not going to make those improvements that people were hoping for.”

In a report released by Food Banks Canada earlier this week, P.E.I.’s attempts to fight poverty got a C- grade — though that is still one of the best marks in the country.

Piloting a guaranteed income project

P.E.I.’s Department of Social Development and Seniors told CBC News in a statement that it continues to discuss a guaranteed basic income project, in partnership with the federal government.

The province is now piloting a targeted basic income program that has 635 clients.

Boyd said the province needs to strengthen its safety need to help Islanders in need.

“There’s been a lot of promotion of a guaranteed income, and it’s clear that people need more income. But that’s not the only story,” she said.

“They need better public housing, they need better transportation, they need breaks with education, they need a public health-care system that they can depend on…. [Getting] a cheque from Ottawa with the kind of inflation and cost affordability at this point, it would disappear pretty fast.”

Impact on business?

Meanwhile, businesses say the 50-cent increase in the minimum wage coming this weekend could have a big impact on their bottom lines.

Kim Horrelt, interim CEO of the Charlottetown Chamber of Commerce, said small businesses are already struggling to keep up with high interest rates, inflation and the aftermath of both post-tropical storm Fiona and the COVID-19 pandemic.

“There’s some that say… they’ll have to reduce their hours [of operation]. Others say it’s going to increase the cost, the prices of goods,” Horrelt said.

“About 67 per cent of our members already pay above the minimum wage, but that will also impact them, you know, because they’ll have to increase those wages for equity and compensation and so on.”

Horrelt said small businesses will have to raise their wages to stay competitive in the job market.

She said the chamber supports a fair wage, but would like to see all levels of government enacting measures to help businesses as well.

“If they looked at the basic personal tax or the brackets, there would be more take-home pay for those that are at that lower level, the minimum-wage level,” she said.

“Without government assistance, I think it’s just going to add to our inflation problem, you know. The wages are going to go up, but so is inflation.”