Ontario’s plan to increase the minimum wage will hit the bottom line at London city hall, city officials say.
In an email to AM980 News, city hall officials say they estimate the additional costs to be in excess of $1 million when the minimum wage rises to $14 an hour in 2018 and another $1 million when it jumps to $15 an hour in 2019.
City officials budgeted for modest increases to the minimum wage but the proposed increase for 2018 and 2019 goes beyond their budget forecasts.
“The proposed increases are well in excess of those included in the 2016-2019 Multi Year Budget,” said city treasurer Anna Lisa Barbon in an email.
Barbon says civic administration will present a business case to make up the difference during budget talks this fall.
The city of London switched to a multi-year budget in 2016 following the election of the current council in the 2014 municipal election. The multi-year budget will carry London through 2019. Despite budgeting for a four-year period, city councillors must still approve the budget for each fiscal year, allowing for changes to be made.
London could get off easy by the planned increase compared to other Ontario cities. In August, Ottawa’s city treasurer estimated the planned increased would cost the nation’s capital an extra $3.6 million.
Ward 11 Coun. Stephen Turner told AM980 he’s not worried about the increased cost saying the city has flexibility within the budget.
“Every budget is a template, it’s not money we’ve already spent, it’s money we anticipate spending and programs we anticipate delivering. If new pressures come along we have to adjust that, that’s the whole point of a budget,” he said.
Turner also pointed out that raising the minimum wage to $15 an hour gets London closer to what it has determined to be a living wage in the Forest City. Last year, a report was released saying a person would need to make $15.53 an hour or $30,284 a year to meet their basic needs.
“A few companies started to do that and I think sometimes your hand gets forced and that might not be a bad thing,” said Turner.
In July, Premier Kathleen Wynne announced her government would increase the minimum wage to $15 an hour by Jan. 1, 2019. The increase would be phased in gradually and would rise with inflation, as scheduled, from $11.40 currently to $11.60 in October to $14 an hour on Jan. 1, 2018 and $15 the following year.
The minimum wage is set to hit $11.60 on Sunday, the fourth straight year it has increased.
As of Sunday, the general minimum wage will have increased by almost 70 per cent since 2004, when it stood at $6.85. The minimum wage remained frozen between 1996 and 2003.
This will be the 11th minimum wage increase since 2004.
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