Horgan defends minimum wage hike that he knows is "challenge" for business

B.C.'s minimum wage rose 5.4% for most job categories on June 1

barista
Baristas at coffee shops are among the many minimum-wage earners in B.C. | Getty Images

B.C. Premier John Horgan defended his government's decision to go ahead with a 5.4% hike on June 1 to the minimum wage in most job categories, and a 9.8% hike in the minimum wage for liquor servers despite pushback from business owners who say that the increase could make reopening and surviving more difficult as COVID-19 ravages balance sheets.

"I have heard from some businesses that they are concerned about the increase, but I’ve also heard from businesses that they have a host of other challenges, and we’ve been focusing on those, whether it be the cost of rent, whether they be concerned about being evicted from their premises while they are doing their business, and a range of other issues," Horgan said at a June 3 press conference.

"I understand that for some the minimum wage is a challenge but I know that for many who are paid the least in the province, this is a welcome pay increase at a time when they desperately need it."

B.C.'s minimum wage rose to $14.60 per hour, up from $13.85 per hour, with liquor servers seeing their minimum wage rise to $13.95 per hour, up from $12.70. That puts B.C.'s minimum wage the second highest among provinces, after Alberta, where the minimum wage is $15. Nunavut recently raised its minimum wage to $16.

B.C.'s labour movement has long wanted B.C.'s minimum wage to be at least $15 per hour, and the province is set to achieve that threshold next June 1, when the minimum wage will rise to $15.20 per hour.

Industry groups have been lobbying the B.C. government on a host of issues.

Retail-sector advocates such as Retail Council of Canada's director of government relations, Greg Wilson, told Business in Vancouver on May 31 that the government should ban commercial landlords from evicting small businesses, as New Brunswick and Nova Scotia had already done. 

The B.C. government one day later introduced such a ban for landlords whose tenants have lost at least 70% of their revenue during the COVID-19 pandemic. 

The restaurant industry has been calling for the B.C. government to allow restaurant owners to buy alcohol at a wholesale price similar to the one at which private retail liquor store owners are allowed to buy products. BC Restaurant and Food Services Association CEO Ian Tostenson told BIV on May 13 that he believed that the B.C. government was "on the cusp" of agreeing to the change. No announcement, however, has yet been made.

"What [the B.C. government is] saying is that they are countering this by other things they’ve done – deferment of employers' health tax, deferment of provincial sales tax that is owing, deferment of taxes owing with respect to carbon tax," Tostenson told BIV on May 31.

He lauded the government for changing its regulations to allow restaurant owners to deliver alcohol to customers who buy meals but restaurant owners who BIV has spoken with say that the move has not moved the needle much for their viability.

"Nobody's buying [alcohol delivery] because they're going to stop at the liquor store," said Glowbal Group owner Emad Yacoub on June 2. He explained that he thinks the vast majority of people will buy alcohol at stores that are able to buy products at wholesale prices because those stores can profitably sell the products at lower prices than restaurants are able to do. 

"This is all smoke and mirrors," Yacoub added. "What is it going to do for restaurants? [The government is] still making the money on it [in taxes.] You think people are going to be stupid enough to buy alcohol [from a restaurant that has to buy products at the full retail price]" unless the restaurant is selling it at a really low price?"

gkorstrom@biv.com

@GlenKorstrom