Canada's Ontario province plans to raise minimum wage to C$15 per hour

TORONTO (Reuters) - Ontario, Canada’s most populous province and industrial heartland, plans to raise its minimum wage to C$15 ($11.14) an hour by 2019, its premier said on Tuesday, putting it far above the current range for the rest of the country.

The Toronto city skyline is shown in this aerial photo over Lake Ontario in Toronto November 1, 2015. REUTERS/Hyungwon Kang

The provincial Liberal government, which is lagging in polls ahead of an election next year, plans to phase in the increase from the current C$11.40 an hour.

Premier Kathleen Wynne said the minimum wage would rise to C$14.00 on Jan. 1, 2018, and climb to C$15 on Jan. 1, 2019.

“It has always been a challenge to raise a family on a minimum wage job ... but in recent years it has become almost impossible,” Wynne said. “Increasing the minimum wage will make a world of difference in millions of lives.”

Canada’s minimum wage currently ranges from C$10.72 to C$13 provincially. Energy heavyweight Alberta is planning to raise its minimum wage to C$15 by 2018.

“Raising the minimum wage is one tool that a government can use to help those who are struggling to get by,” Hank Beekhuis, a director at CLAC Ontario, an independent labor union, said.

The economy of Ontario, which accounts for nearly 40 percent of Canada’s gross domestic product, grew 2.7 percent in 2016, helped by low oil prices, a weak Canadian dollar and a red-hot housing market.

The province’s unemployment rate has fallen to 5.8 percent in April from 9.6 percent during the global recession. But businesses faced with increased wage costs could respond by hiring fewer workers or raising prices.

“I would suspect that in the very near future the cost of a cup of coffee, or a hamburger, or products that we purchase on a regular basis, ... will increase,” said Karl Baldauf, vice president, policy and government relations at the Ontario Chamber of Commerce.

“Many businesses will not be able to find a way to absorb these costs and many ... will have to go out of business.”

Measures proposed by the province also include mandating equal pay for part-time and full-time workers, according to a news release. But it is the hike to the minimum wage that most concerns the Retail Council of Canada.

“It is the quantum of the change and also the pace of the change; it doesn’t allow a lot of time for businesses to adjust,” said Karl Littler, vice-president, public affairs.

“Our competitors are not necessarily over the street or down the block, they are over the border or overseas in an online fulfillment warehouse and they are not employing as many people.”

Reporting by Fergal Smith; Editing by Chizu Nomiyama and James Dalgleish