Confidential documents suggest B.C.'s new $10.45 minimum wage may have been one big mistake

Hundreds of pages of documents show B.C.'s relatively-low minimum wage was most-likely an accident, a mistake that the government is now refusing to acknowledge or redress.

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      British Columbia’s new minimum wage of $10.45 an hour is the second-lowest in all of Canada, according to the federal government’s Labour Program. When New Brunswick implements a promised increase in 2017, B.C.’s rate will rank dead last among Canada’s 13 provinces and territories.

      And that’s where it is going to stay. Each jurisdictions’ minimum wage is tied to the Consumer Price Index (CPI) or a similar economic indicator. So even though B.C.’s wage is scheduled to rise each September, it will remain low compared to all other provinces because rates there will rise the same way.

      It is unlikely this situation was an intentional outcome of the provincial government.

      After reviewing hundreds of pages of government documents related to changes to B.C.’s minimum wage implemented on September 15, the Straight can report it was most likely an accident, a mistake that the government is now refusing to acknowledge or redress.

      Good intentions

      Upon assuming office in 2011, B.C. Premier Christy Clark personally took an interest in the minimum wage. After her predecessor, Gordon Campbell, left it at $8 an hour for a decade, Clark promised to raise it from the gutter.

      “We’re not going to be number one in the country by any stretch,” Clark said on CKNW radio on March 17, 2011. “But we’re going to be catching up. We won’t be at the bottom anymore.”

      Stephanie Cadeiux, B.C. minister of labour at the time, repeated that pledge in the legislature on May 9, 2011: “In fact, it is not going to be the lowest in Canada,” she said. “When it reaches $10.25 next year, we will be tied for the second-highest in Canada, actually.”

      The good intent expressed in those public remarks is supported by cabinet submissions and briefing papers the Straight obtained through freedom of information legislation.

      In those documents, bureaucrats repeatedly describe B.C.’s minimum wage as among the country’s lowest, express concern for that fact, and offer solutions to improve the state of B.C.’s lowest earners.

      So how did B.C.’s new minimum wage end up near the bottom in the country?

      Sliding back to near last place

      Although some of the released documents are heavily redacted, those files make clear there was a great deal of time and thought put into the 20-cent increase to $10.45 and the decision to tie the new wage to the CPI.

      There were meetings and many emails on the matter. Civil servants looked at different minimum rates across the country, gathered information on other provinces’ plans for the future, and projected how B.C.’s minimum wage would compare to those plans.

      “In 2014, every province other than B.C. raised its minimum wage at least once,” reads a February 2015 cabinet submission marked confidential. “Several provinces have scheduled increases for 2015. Since May 1, 2012, B.C. has slid from 3rd (behind only Yukon and Nunavut) to 9th among all Canadian jurisdictions as of January 1, 2015. Based on current commitments in other jurisdictions, B.C. will likely be last among Canadian jurisdictions if there is no increase by October 2015.”

      The month after that cabinet submission was received by the premier’s office, the government announced its new rate of $10.45, stating that this latest increase would place B.C. at about the middle of the pack.

      Which it did, but only for 15 days from the time it was enacted.

      The documents include specific comparisons to other jurisdictions' plans to raise their minimum wages, but not to increases scheduled for later than mid-2015.

      On October 1, Alberta went to $11.20, Manitoba  to $11,  Saskatchewan to $10.50, Ontario to $11.25, and Newfoundland and Labrador to $10.50. Those changes dropped B.C. back to second-to-last place in the country.

      A predictable outcome

      Repeated interview requests sent to the premier’s office and the B.C. Ministry of Jobs, Tourism and Skills Training in September and October were either refused or ignored. When the Straight asked in writing if the government was aware that $10.45 ranked near the bottom of the country, Ministry of Jobs spokesperson Gabrielle Price supplied statements that ignored the question. She also refused to say whether or not the government would be willing to re-examine the issue.

      Shane Simpson is B.C.'s opposition critic for economic development, jobs, labour, and skills and NDP MLA for Vancouver-Hastings. In a telephone interview, he recounted taking similar questions to his government counterpart, Shirley Bond.

      “I talked to the Minister of Jobs in the estimates process in the spring about this, and I asked whether there were any plans or intentions to make any other adjustments to the minimum wage over and above the CPI,” Simpson recounted. “She said, ‘No’. She said, ‘We’re pretty comfortable with where we are and we are going to stay here.’ ”

      If this situation was the result of a mistake, the documents suggest the province will now resist returning to the matter to correct it.

      In several places in the released papers, it is stated that pegging B.C.’s minimum wage to the CPI would help prevent a build-up of discontent among low-income earners that, history had shown, would eventually force the government to implement a dramatic wage increase that would upset business owners.

      “Experience indicates that when the minimum wage is fixed for long stretches of time, political pressure eventually builds to enact big increases—and it is these, rather than small periodic increases, which cause the most serious disruptions for the business sectors that rely on relatively low-paid employees to staff their facilities and run their operations,” reads a February 2015 cabinet submission.

      Calls for a correction

      B.C. Federation of Labour president Irene Lanzinger told the Straight her organization predicted that the 20-cent increase would not be enough relative to other jurisdictions. She asked, therefore, why bureaucrats in the B.C. Ministry of Jobs were not able to do the same.

      Confidential  documents obtained by the Straight show that in selecting a new minimum wage, the B.C. government looked at other jurisdictions to project how B.C. would compare. Which begs the question, why did our province eventually decide on a rate that's the second-lowest of in all of Canada?

      After reviewing a number of the documents obtained by the Straight, Lanzinger said her staff came to the same conclusion: that the provincial government did compare B.C.’s new minimum wage to that of other provinces, and also that it looked at how those jurisdictions planned on increasing their rates in the near future. But what they didn’t do is look far enough down the road.

      “The quote in the documents is, ‘If we don’t do something by October 2015, we will be last,’ ” she said. “So they did something by October 2015. But what they did was just so inadequate and so minimal.”

      Lanzinger encouraged the government to re-examine the province’s new minimum wage and consider another raise that will lift B.C. from the bottom in the country.

      “She [Clark] specifically said we weren’t going to be at the bottom, that we were going to put things in place to make sure that we didn’t end up at the bottom,” she said. “And here we are at the bottom.”

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