Increasing the minimum wage to $18 per hour in Quebec could have a negative impact on nine out of ten small and medium-sized businesses, according to a consultation released Thursday by the Canadian Federation of Independent Business (CFIB).
The current minimum hourly wage in Quebec is $13.50.
The study, based on an online consultation of 424 CFIB members in Quebec between Sept. 9 and 24, predicts that such an increase would impact the price of goods and services.
It would also, to a lesser degree, affect the number of employees and the survival rate of some businesses.
Of the CFIB members surveyed, 33 per cent say they would have to raise prices, while 30 per cent indicate the increase could have a domino effect on employee salaries, including those who are not on minimum wage.
In addition, 18 per cent of small business owners say they would have to compensate by working longer hours, 11 per cent would reduce the number of employees and another 11 per cent say it could force them to close.
CFIB’s Quebec vice-president, François Vincent, states small and medium businesses in the province are facing significant increases in operating costs, with half of them still not returning to normal revenue amounts.
The suggestion to increase the minimum wage to $18 per hour came after Quebec Finance Minister Eric Girard’s economic update on Nov. 25.
Quebec federation of labour (FTQ) President Daniel Boyer stated it was the best way to help close the wealth gap between Quebec and Ontario.
A few weeks earlier, Ontario Premier Doug Ford announced that the province would raise minimum wage to $15 per hour on Jan. 1, from the current $14.35.
Last October, Cogeco Chairman Louis Audet suggested raising minimum wage to $20, stating it would be a social justice measure to reduce income disparities in Quebec.
Quebec Labour Minister Jean Boulet reacted to the proposal by pointing out it would create a major economic shock.
He states the current calculation for setting minimum wage is 50 per cent of the average hourly rate in Quebec, which he says is around $26 or $27.
CFIB says there are more effective ways to fight poverty than a significant increase in minimum wage, such as improving work incentives or targeted tax credits that directly benefit lower-wage employees without creating additional pressure on businesses.
CFIB reports that for a survey probability sample with an equal number of respondents, the margin of error would be +/-4.8 per cent, 19 times out of 20.
— This report by The Canadian Press was first published in French on Dec. 2, 2021.