Estimates - Labour (14 May 2007)
From Economy Committee Hansard - 14 May 2007
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Department of Labour
Mr. Hart: — Thank you, Mr. Chair. Minister in our last discussion of Labour estimates, Mr. Federko of the WCB had indicated that he would provide me with some information on retroactive payments for permanent, functional impairment as a result of appeal decisions, and I was wondering when we could reasonably expect to have that information. He said it was a less onerous task than the written questions I’d asked him. And I just . . . by way of this question is just a reminder that I’d appreciate to have that information . . .
Hon. Mr. Forbes: — As soon as possible. I’m . . . Yes.
Mr. Hart: — Minister, on May 1 you had a press release. And you said that you’re going to ask the Minimum Wage Board to study the idea of raising the province’s minimum wage to the low-income cut-off and then tying it to the consumer price index. Just for the record, what did you mean by the low-income cut-off? What measurement are you referring to there?
Hon. Mr. Forbes: — Stats Canada has a process by which they establish a wage based on the size of city and location in Canada. And I may want to ask John Boyd to come forward, and he might be able to give us more information. But roughly speaking, what that means for Saskatchewan . . . At the end of the year I believe it was 8.65; we may be a few months behind right now.
Now the vulnerable . . . the Pearson Commission on Improving Work Opportunities for Saskatchewan Residents in recommendation no. 1 asked that we take a look at establishing or tying the minimum wage to that and then indexing it every year thereafter to the Canadian consumer price index.
And so the Minimum Wage Board now is in the process of conducting hearings and consultations with stakeholders. And this would be an opportune time to talk about that, to examine the viability of setting it at a certain benchmark. This, in many ways, would be something I think would be worthy of study because clearly if you’re making a wage below that, then you could well be argued that you’re making a wage of poverty, that keeps you in poverty. And it’s unfortunate if you’re working full-time, 40 hours a week, full-time, how is it that your wage is still keeping you in poverty? And so this is a good time for the board to take a look at this question.
Mr. Hart: — I wonder if you could have one of your officials explain what the definition of the low-income cut-off . . . what constitutes this measurement? What factors or guidelines are used to determine that? And particularly we’ll speak about the Saskatchewan context and is there variability between Reginas and Saskatoons and the, you know, small rural communities and that sort of thing? I wonder if you could just, briefly just explain that.
Hon. Mr. Forbes: — I’ll ask John Boyd.
Mr. Boyd: — The low-income cut-off is a measure, as the minister said, developed by Statistics Canada. It’s not a measure of poverty. It’s a measure of what an individual or a family of two dependants up to, I believe, it’s 11 dependants would reasonably expect to spend in different geographic areas. And they don’t differentiate from one provincial jurisdiction to another. It’s on the basis of community size.
And so there’s a measure for communities, cities of over 500,000. There’s another measure for communities of 100,000 and above. There is a measure for smaller communities. Then there’s a measure for rural areas. And the measures, the low-income cut-offs are the same across the country. So the low-income cut-off, say, for the city of Regina would be the same as, say, the city of Victoria. So it’s not specific to individual provinces.
And so there’s a measure for an individual. So if you’re a single person living in rural Saskatchewan or any rural province, there’s a specific amount that you would reasonably expect to spend to live. And then if you’re a family of two, it’s a different amount all the way up to, you know, a large family with several dependants.
Mr. Hart: — Well, Minister, you mentioned that the figure at the end of last year was 8.60 or 8.65. So for using all these variables and, you know, a different figure for families versus single versus larger centres versus small centres, how did you arrive at that figure of whether it was 8.60 or 8.65 — whatever that figure was? How did you then arrive at saying well, if we follow this procedure, this is where the minimum wage would be? How did you arrive there?
Hon. Mr. Forbes: — Now that’s the number, that’s the figure that’s used for a single wage earner in Saskatchewan. So it would be — of the different groups that John was speaking of — it would be the lowest amount of those I understand. But this is the one that Lynne Pearson in her report had used and asked us to take a look at, and so that’s why we’re asking the Minimum Wage Board to examine the viability of that.
Mr. Hart: — So then if I understand it correctly, then in order to set a minimum wage for the province using that process, you would be taking the single worker living in either Regina or Saskatoon as the measuring criteria for the minimum wage? Or are you envisioning having a minimum wage for single workers versus family workers, you know, a whole suite of minimum wages as such which could be somewhat confusing?
Hon. Mr. Forbes: — And this is the bait that Pearson and her group tackled. It was an interesting thing because sometimes people say students should be included, maybe not. And then you know for sure that the vast majority of . . . especially when it comes to full-time workers who are on minimum wage that they are mostly women and many of the single parent families who are headed up by a single worker, are women making minimum wage.
There are the disparities, and actually Pearson in the report actually talks about this, some of the cost factors of living in rural Saskatchewan versus the cost factors of living in urban Saskatchewan, the transportation issue is an issue.
And so this is why it’s important for the board to take a look at this. This is one that we were asked to take a look at. This is what they’re tasked with, and so I’m sure they’ll have many presentations to them about the complexity of this. It’s one that, well, at the end of the day they have to come down on balancing those interests out.
Mr. Hart: — The board will be coming forward with their recommendations within a two-year period, is that what we’re looking at? I guess the question is when will we receive the next recommendation from the Minimum Wage Board?
Hon. Mr. Forbes: — I would anticipate sometime in either late summer or early fall. And I think this would be quite appropriate because the last raise, the wage was in March, so I think that employers would hope that if there is another raise that it would be annual, and so it would make sense that that would give lots of notice for them. But again I’m not sure what their recommendations will be, so we’ll have to wait and see.
Mr. Hart: — Minister, I believe under the current minimum wage, single workers will find, if they’re working the regular 40-hour week, will find themselves in a taxable position. Would you not want to look at perhaps increasing the basic personal allowances and removing these low-income wage earners from the tax roll? That way not only the employers would be bearing, you know, some of the increased costs of an increase in the minimum wage, but also government would also share in that burden.
And it just seems somewhat ludicrous to have people working for minimum wage and still paying provincial taxes. You know, we certainly can’t deal with the federal taxes. And I haven’t done a recent tax calculation to see whether they would trigger federal taxes, but I believe provincial taxes they would trigger, and it seems to me that’s another option. And I wonder why you wouldn’t have also asked the board to look at that particular option, at least determine the effect of it.
Hon. Mr. Forbes: —I have to say, Mr. Hart, I’m disappointed I didn’t bring the report with me because I’d read you the paragraphs in the report that Pearson actually tackled this issue. And it was very clear that that in terms of the minimum wage earner and the issue of getting more disposable income to them, the most effective way was in terms of the wage itself, and they talked about this. So what I will undertake to give to you is the detailed explanation of that because I don’t want to misquote that, and it was quite thorough in her report. She looked at it and at that idea.
I would say that as a government we have cut personal income taxes. We think that’s an appropriate way but we also . . . At this particular issue that when you’re targeting low-income workers and getting them disposable income, that the best way is to make sure the wage is fair and that it’s a decent wage. That’s you know a primary tool to make sure that their needs are met.
Mr. Hart: — Minister, quite often what happens in the workplace when the minimum wage is increased, employers are also looking at increased wages for those workers who are earning perhaps $1 or $2 above the minimum wage because quite often wages are set based off of the minimum wage which then . . . Employers are not only looking at additional salary costs for the minimum wage earners but for a number of other employees.
And I mean certainly there are, you know, quite a number of employers under current economic conditions that I guess would, if forced to, would have to admit that you know they could probably look after those costs. But there are still a great number of small-business owners who find these additional costs in salary you know quite burdensome to their businesses. When the last go-round, when we looked at the issues of minimum wage and available hours and all those sorts of things, we heard from quite a number of small-business owners who really felt that you know these kind of increases were quite a burden.
I mean they certainly value their employees, but they said well, why is it that only we as employers have to bear the full brunt of increased salary costs, when by allowing a greater basic personal exemption we could accomplish the same thing, and we could share the extra costs between employers and government? And they were advocating quite strongly to at least look at that and evaluate it.
Now you mention Ms. Pearson’s report, and I have to admit I haven’t seen that. But it seems to me I would like to, you know, certainly look at that and see the rationale of why it may not work. But I need to be convinced that it isn’t a viable solution to providing decent salaries for the lowest wage earners in our society. I guess maybe not the decent salaries but the take-home pay, the amount of money, as they say in the jeans, as such. That’s what’s important. And we can accomplish that in a number of ways, in a couple of ways as I’ve outlined.
Hon. Mr. Forbes: — Well I now have the page in the report, page 32, and it’s just a short part, and maybe I’ll just read it into the record because I think it’s important. And I quote:
The Commission explored the possibility of using the tax system to increase disposable income for low income workers. Unfortunately, it appears that this is not a particularly viable option. When the tax exemption is raised, it is applicable to all taxpayers, not just those who are low income. We were informed that for every $500 of exemption for individuals, the cost to the provincial treasury would be between $25 and $26 million. Instituting a $500 exemption would translate into only a $55 per year benefit for each low income individual.
So you can see that for $55 it’s very expensive for the provincial treasury to do that. It would be approximately 25 or $26 million. And then the benefits, the vast majority of the benefits actually fall to the higher income individuals. So they determined that this was not workable and inefficient.
Mr. Hart: — But, Minister, I think some of those problems could be rectified or alleviated if it was a targeted program, that would target people that earn below a certain figure, and I don’t have all those figures with me tonight. That would be aimed at low-income wage earners, if their income fell below a certain level whether it’s — you know, I’ll just pull a number out of the air — 25,000 or something like that, that they would be eligible for an additional personal exemption which would then effectively remove them from the tax role, but yet would prevent high-income families or individuals from accessing that tax benefit. I think that may be a workable solution. I mean, you certainly have the resources of the officials of the Department of Finance to look at that and run those scenarios. And I think perhaps I would suggest that maybe you may want to have the board have a look at that particular proposal also.
Hon. Mr. Forbes: — I think though, that really at the end of the day, what we’re talking about is a fair wage for a fair day’s work, and that’s what’s really important because, you know, I think as a government we’ve done an awful lot in terms of helping all different sectors of the economy in terms of tax cuts. In fact just last fall we cut the PST [provincial sales tax] by two points — a big thing for everyone including business. And so I think the low-income workers, I think that they would like to see themselves not categorized as low-income or at-poverty or below a living wage or all those terms. They’d just like to see themselves as people working and getting paid a fair wage.
And we know, and if you watched CBC [Canadian Broadcasting Corporation] on Friday night, you saw that the income gap is growing between those who are well paid and those who are not well paid. And I think that while I recognize — and this is why we have a Minimum Wage Board to determine the balance — I think though we still need to make sure the most efficient, well the most effective and efficient way to get money into people’s jeans is to give them a fair wage.
And what is a fair wage? And we’re trying to wrestle with that. And of course Pearson in her report said take a look at LICO [low income cut-off]. It seems to be a way of finding that balance. And then after that if we could get into indexing it, then we don’t have to have these political discussions because we know that there is a cost of living, and it does go up, and many of us who are in either unions or other professional groups get recognized for that. But somehow those low-income workers don’t get recognized for that.
And while we can devise schemes and maybe the government could pick up the tab, actually I think in many ways those people who are benefiting from the work that’s being done should be paying. I understand though that there are challenges out there, but we see in this booming economy that Saskatchewan has right now, if there’s ever a time to have a fair wage established, this would be the time. We’re very close to that. We should take a look to see if it’s viable. Other times it may not be, but here things are booming. We are doing well. And often Saskatchewan has been looked upon as being a low-income province, you know, and now is the time to say no. We pay fair wages for a fair day’s work. And that’s all people want.
Mr. Hart: — Well I think, Minister, we’re trying to accomplish the same thing — a fair income for those people that are at the lowest level of earning capability, whether they be young people starting out and acquiring skills or whether there be someone for whatever reason that cannot gain employment that traditionally pays a higher salary. I don’t think we’re arguing or disagreeing on the need to provide a fair and reasonable income for those people. It’s the matter of how we do it and who bears the cost, whether it’s all being borne by employers or whether there’s a sharing in the additional cost.
The program that we’re proposing or at least proposing that we take a serious look at is increasing the exemptions for the low-income earners that could be indexed so that, as the cost of living goes up, those exemptions grow. We could be looking at perhaps indexing the resulting minimum wage that is set and those sorts of things.
Again you know, we need to provide the employment opportunities for individuals. And as you said, a thriving economy is the best recipe for that. And if through some innovative measures that a provincial government can put in place we can enhance that growth within our economy and relieve some of the burden off of our . . . I think it’s our smaller . . . whether it be start-up businesses or there are certain industries that where the margin is quite small, and they really feel the effects of increased minimum wages, whatever. But if we can make those or create more employment opportunities where the employers have an ability to eventually provide, you know, a higher salary and an opportunity for our people that seem to be at that lower end of the income schedule, I think we should be looking at them and perhaps not just looking at the one option but looking at all options that are out there. And I would urge that perhaps you have the board have a look at some of these ideas.
Hon. Mr. Forbes: — Well in many ways, this is what the role of the Pearson commission was — to take a look at many of the challenges that low-income workers faced.
Whether that be training . . . And we’ve done an awful lot of work in that area. And I think many of the employers in this province . . . and I know I’ve talked to many of them who appreciate the work that we’ve done in that area. Child care is another area that we’ve taken some strong action — the barriers that low-income workers look at. We’re looking at how we can help First Nations and Métis people access work to the end that even with the adult basic education on reserves now, we’re making sure that we have a strong workforce that’s out there. And we were delighted to see . . . And of course when we talk about the Building Independence program, how can we transition people from social assistance to the workplace, and we really focused primarily on families.
But we were delighted as part of this budget to be able to help, in terms of health care, some pretty basic minimal . . . But it’s a start in terms of health care for singles and couples without children. How can we help them? And so many people might say, well we’re benefiting the employer on that part.
We think we are, but we still have to tackle the question of the wage. How much do you get paid an hour? And that’s a bottom line, and that’s one that we know. And whether you see the signs on Albert Street or wherever, it’s the question people, when they’re looking for work, want to know: how much am I going to get paid, and can I make it at the end of the paycheque to pay my bills? And they can’t wait till April to get their refund.
Mr. Hart: — Well, Minister, I guess we’re probably not going to agree on the best way to tackle the problem. I think we agree of the objective of providing reasonable incomes or take-home pay, money in the jeans, or however you want to term it, for people working at that salary level.
Mr. Chair, I think that pretty well concludes any questions I would have for the minister and his officials, and I’d just like to thank the minister and his officials for the information that they provided and the discussions that we’ve had over the last number of sessions in Labour estimates. I certainly appreciate the co-operation of both the minister and his officials, and I thank him for that.
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