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Greater Niagara Chamber of Commerce

Skills mismatch, minimum wage hike in focus at economic summit

by Paul Forsyth

Looming minimum wage hikes, international trade in the age of U.S. President Donald Trump’s threats to scuttle the North American Free Trade Agreement, and the skills mismatch that leaves many employers begging for qualified workers were front and centre at the annual Niagara Economic Summit on Thursday.

Not surprisingly, the Ontario Chamber of Commerce came out swinging at Bill 148, the provincial government’s Fair Workplaces, Better Jobs Act, which will hike the minimum wage from $11.60 right now to $14 in January and to $15 by the following January.

But Grimsby native Karl Baldauf, vice-president of policy and government relations for the chamber, said that legislation will have even more dire consequences for businesses in Ontario. He also said businesses in Niagara will in particular feel the brunt.

Baldauf conceded there’s a tremendous amount of sympathy among Ontario residents who see neighbours unable to afford basic living expenses because they simply don’t make enough on their paycheque.

“We should not be proud that exists in a province as prosperous as Ontario,” he told the crowd of hundreds at White Oaks Resort and Spa.

But the rapid implementation of the wage hikes is unprecedented across North American, said Baldauf, who noted the increases will cost Ontario businesses a whopping $13 billion in two years.

Niagara’s heavy reliance on tourism and service sector jobs makes it “inordinately at risk” compared to the rest of the province, he warned.

But the legislation goes much farther, mandating changes such as increasing vacation time for workers, requiring equal provisions for casual and seasonal workers, and making it easier for workers to unionize, he said.

All told, the hit for employers will be a staggering $23 billion in the next two years, said Baldauf.

“Bill 148 has the potential for remarkable and dangerous unintended consequences,” he said, noting the chamber predicts it will cost the average family about $1,300 more a year in higher costs for goods and services, and will put 185,000 jobs at risk over two years.

“All of this change all at once is adding tremendous risk to businesses in this province, a risk we consider irresponsible,” said Baldauf.

Spreading the changes out over five years would only put about 49,000 jobs at risk, he said.

But the chamber official backed up the province on the issue of Ontario’s Fair Hydro Plan, which lowers electricity bills that were causing panic among many Ontarians and businesses. The province’s budget watchdog said by kicking the can down the road further, it will actually cost Ontarians billions of dollars more in the years to come.

But Baldauf said the province had to act decisively on soaring hydro costs.

“We saw business after business after business leaving this province because of hydro costs,” he said. “We had a crisis and it called for drastic action.”

But the skills mismatch in Ontario was also key at the summit. Baldauf said a recent survey by his chamber of businesses shed light on just how important tackling that is.

“The number one issue for businesses in this province is not the rising cost of doing business, which was a shock for a lot of us,” he said. “Not being able to access the talent required for a business to grow is the number one impediment to growth, more so than rising electricity, more so than rising property taxes.”

There was chatter among panellists at the summit about the importance of financial incentives for businesses to locate here or grow. But Tracy Reynolds, an executive director at Global Affairs Canada, said multinational media giant Thomson Reuters Corp. made it clear in October why it was creating some 400 jobs and relocating its top executives from New York to Toronto.

“Their decision was based 100 per cent on the availability of talent,” he said.

Reynolds said good infrastructure such as adequate highway networks is routinely a close second to a skilled workforce in terms of importance for companies looking to set up shop or relocate.

“Questions like bottlenecks … were always something they asked about,” he said. “Both of those are critical for this region if you’re going to continue to grow your economy.”

That led regional chief administrative officer Carmen D’Angelo to tell the summit that only reinforces the need to get the oft-stalled mid-peninsula corridor concept off the back burner in a region where nearly a million fully-loaded transport trucks cross the border each year.

“You get an accident (on the QEW) and everything comes to a screeching halt,” he said.

Regional Chair Alan Caslin told regional council later in the day that the summit was a prime opportunity to showcase how the region’s economic development department and the local towns and cities are developing a business-friendly culture. “The support for…doing business in Niagara was electric,” he said.

The economic summit was organized by the Greater Niagara Chamber of Commerce.

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