Bill 148Fair Workplaces Better Jobs Act

Agenda

1. OverviewofChanges2. Advocacy3. HelpingEmployersTransition

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Overview of Changes

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Fair Workplaces Better Jobs Legislative TimelinesJanuary 1,2018 January1,2019

$14perhourminimumwage $15perhourminimumwage

VacationPay Locationchangerequests

PersonalEmergencyLeave Minimumthreehourspay

EqualPay forEqualWork(April1,2018) Refusalofshiftswith lessthan4daysnotice

AllLabourRelationsActprovisions(ie.unioncertificationandbargaining),willoccur6monthsafterroyalassent.

ELECTIONJune7,2018

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Fair Workplaces Better JobsMinimum Wage

MinimumWageCategories

CurrenttoSept.30,2017

Oct.1,2017toDec.31,2017

Jan.1,2018toDec31,2018

Jan12019toSept.30,2019

GeneralMinimumWage

$11.40perhour $11.60 $14.00 $15.00

Studentsunder18whoworknotmorethan28hoursperweek

$10.70perhour $10.90 $13.15 $14.10

LiquorServers $9.90perhour $10.10 $12.20 $13.05PercentageIncreasefromCurrentMinimumWage

2% 23% 32%

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Fair Workplaces Better Jobs Act

• Card-basedunioncertificationprocessfortemporaryhelpagencies,buildingservicessectorandhomecare/communityservices.

• Accesstoemployeelistsonceunionhassupportof20%ofemployees.• OntarioLabourRelationsBoardcanconductvotesoutsidetheworkplace.

UnionCertification

• Allemployeespaidequallywhenperformingthesamejobforthesameemployer.• TemporaryHelpAgenciespaidequallytopermanentstaffwhenperformingthesamejob.

• Exemptionsforequalwagesbasedon:seniority,merit,productionoutput.

EqualPayforEqualWork

• Allemployeesentitledto10PELdays/year(2paid)• Norequirementfordoctorsnotes

PersonalEmergencyLeave

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• Employeerequestedschedule/locationchangesafter3monthsemployment.• Mustbepaid3hoursifashiftiscancelledwithin48hoursoran“on-call”employeeisnotcalledinforwork.

• Abilitytorefuseshiftsifrequestslessthan4daysinadvance.• Thelegislationlacksclarityastowhatdefinesexemptionstoprovisionsinregardstoweather.

Scheduling

• 3weeksafter5yearswithsameemployerPaidVacation

• AverageregulardailywagebasedoffofmonthpriorPublicHoliday

• 175moreemploymentstandardsofficers• MinistryofLabourprogramtoeducateSMEsaboutrightsandobligations

Enforcement

Fair Workplaces Better Jobs Act

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Advocacy

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InresponsetorequestsfromgovernmentforincreasedemployerinputintotheChangingWorkplacesReview,theOCChasformedKeepOntarioWorking(KOW)– asectorally diverseallianceofindustrygroupscommittedtoevidence-basedlabour reforminOntario.Thisgroupincludes:

Keep Ontario Working Coalition

Overall,theKOWgroupfeltaneedtobemoreoutspokenagainsttheproposedchangeswithanemphasisontheharmfulandunknownconsequencestobusinessprovision,supplychains,automationandtheconsumermarkets

Throughdigitalmediaactivity,KeepOntarioWorkingisactivelyencouragingthebusinesscommunitytosharetheirperspectivesonchangingworkplacesandthelegislationwiththegovernment

CanadianFranchiseAssociation

Food&BeverageOntario

NationalAssociationofCanadianConsultingBusinesses

OntarioChamberofCommerce

OntarioForest

IndustriesAssociation

OntarioRestaurant,Hotel&Motel

Association

RestaurantsCanada

RetailCouncilofCanada

TourismIndustry

AssociationofOntario

OntarioRealEstateAssociation

FoodandConsumerProductsofCanada

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Strategic Approach

• SentalettertothePremierinadvanceofBill148toaddresssuggestedchanges.

• Releasedastatementtoourlocalnetworkinformingthemofchangesandnextsteps.

• ContinuingconversationswiththeSecretaryofCabinet,thePremier’sOffice,theMinistryofLabour,theMinisterResponsibleforSmallBusiness,theMinistryofFinance,theMinistryofEconomicDevelopmentandGrowthandtheTreasuryBoard.

• MediarelationsincludingTheNational,FinancialPostandtheAgendawithStevePaikin.

Pre-legislation

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Strategic Approach

•EconomicImpactAnalysistooutlinenegativeimpactsoflegislation.•UpdateandPromotionoftheKeepOntarioWorkingwebpage.•ReleasedanopenlettertothePremiersurroundingthepaceofBill148implementation.• PresentationtotheStandingCommitteeonFinanceandEconomicAffairs• LetterwritingtoPremier,OppositionLeaders,Ministers,CriticsandlocalMPPs.•GatheringstoriesfromOntarioBusinesswithheavyemphasisonnegativeconsumereffects.• Regionaleventsandtownhalls.

Phase1:JunetoMid-August

•Utilizingoutcomesoftheeconomicanalysistoconsidermethodsforeffectiveengagementandcommunicationoflegislativeimpacts.

•Governmentrelations,socialmedia,andmediarelationstopromotereportkeyfindings.• Strategieswillplaceheavypoliticalpressureintermsofvoterbasis,support,andoutreach.

Phase2:Mid-AugusttoSeptember

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Economic Impacts

OnAugust14th,theKeepOntarioWorkingcoalitionreleasedthefirstandonlyindependenteconomicimpactanalysisoftheimpactofBill148.Theanalysisindicatesthat:Bill148willcreate$23billionhittobusinessesoverthenext2years.• Guidedbyliterature,CANCEAhasmadeanassumptionthatemployerswillabsorbthose

costsasfollows:– Employeesbear50%oftheinitialcost($11.4Bofthe$22.9B)Employerswilldetermine

howtosqueezethisamountoutoftheirlabourforce– Consumersbear29%oftheinitialcost($6.7Bofthe$22.9B)Priceincreasesaren't

stimulative– Businessesbear21%oftheinitialcost($4.8Bofthe$22.9B)The$4.8billion,whichwill

translateintohighersalariesandemployeebenefits,willturnintoastimulatoryeffectof$11billionovertwoyears

$23billion Hittobusiness- $11billion Stimulative impactfromincreasedconsumerspending$12billion Problemforoureconomy

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Economic Impacts

• Consumerscanexpecta50percentincreasetoinflationforthisyearandtheforeseeablefuture,increasingeverydayconsumergoodsandservicesby$1,300perhouseholdonaverageeachandeveryyear.

• About185,000jobsareexpectedtobeatriskoverthecomingyears.ThiswillgreatlyimpactOntario’smostvulnerableworkers.2.7%ofthejobswithintheNiagararegionarepredictedtobeatrisk.

– 30,000ofthoseatriskareunder25.– 96,000ofthoseatriskareexpectedtobewomen.

• Sectorsfacingthehighestrisktojobsinclude(estimatedjobsatrisk):– Manufacturing(16,800jobs)– Accommodationandfoodservices(17,300jobs)– Retailtrades(14,700jobs)– Wholesaletrades(16,000jobs)– Professional,scientificandtechnicalservices(14,000jobs)– Financeandinsurance(13,000jobs)– Privatesectorhealthcareandsocialassistance(8,000jobs)

Protecting Against Unintended ConsequencesConsideringtherisksoutlinedinthiseconomicimpactanalysis,itisimpossiblefortheGovernmentofOntariotoensurebusinesssuccessthroughoffsetsalone.

Todemonstratetruefairness,theGovernmentmust:• Slowdownimplementationtoavoidunintendedconsequencesand

protectOntario’sjobs,communitiesandourmostvulnerable• ImplementbroadamendmentstoBill148;and,• PresentpolicyoptionsandoffsetstoensureOntario’semployersaresupportedin

transitioningintoBill148.

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Bill 148 AmendmentsMinimumWage• Toallowforpredictabilityandtheabilitytoadjust,aslowerpaceofminimumwagemustbe

considered.EqualPayforEqualWork• Theseprovisionsshouldnotapplyduringthefirstsixmonthsthatassignmentworkersandseasonal

employeesareperformingworksimilartofull-timeemployees.Scheduling• Thegovernmentshouldlookforsectorbasedexemptionsasone-size-fits-allsolutionsfor

schedulingprovisionsdonotwork.UnionCertification• Thesecretballotprocessforcertificationshouldbepreservedforallsectors.• Certificationprocessesforunionformationandaccesstoemployeelistsshouldremainat40per

centofemployeesinvolved.PaidEmergencyLeave• Thegovernmentshouldpreservethe50-employeethresholdforPELandclarifythegreaterrightor

benefitprovisionintheESA.JointEmployer• AmendS4.1(b)oftheESAtoallowfordiscretionarynotobligatoryobligations

forseparatepersonstobetreatedasoneemployer.15

Helping Employers Transition

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Keeping Ontario Competitive

The OCC is meeting with key officials to discuss how the Government can ensure that Ontario’s business community remains competitive, while also helping employers transition to new regulations and requirements. The OCC recommends that the Government of Ontario:

1. Reinstate scheduled reductions in the Business Education Tax.2. Reduce the Corporate Income Tax.3. Reduce the Employer Health Tax.4. Restore the Ontario Research & Development and

Innovation Tax Credits to 2016 amounts. 5. Increase the charitable HST rebate.

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Business Education Tax (BET)

• Provincialpropertytaxes,effectivelyknownastheResidentialEducationTax(RET)andtheBusinessEducationTax(BET)arecontrolledandregulationbytheProvince.

• TheBETratevariesthroughouttheprovince,dependingonabusinessesmunicipality.• In1998,anadvisorypanelrecommendedthestandardizationoftheBETratethroughoutthe

province,stating“Aprovince-wideuniformrateappliedtoabroadbasewithfewexemptionswouldbefair,clearandsimple.

TheOCCrecommendsthattheGovernmentreinstatescheduledBETreductionstoauniformrate.

Municipality BusinessEducationTaxRateHalton,Regionof 0.86%Peel,Regionof 1.04%Haliburton,Countyof 1.08%ThunderBay,Cityof 1.14%Toronto,Cityof 1.14%Windsor,Cityof 1.37%London,Cityof 1.39%

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Ontario Corporate Income Tax

• Inthe2009Budget,theGovernmentpledgedtoreducetheCorporateIncomeTax(CIT)rateto10percentby2013.AccordingtotheMinistryofFinancewebsite,thiswouldprovideatenyearbenefitof:– Increasedcapitalinvestmentof$47billion;– Increasedannualincomesofupto8.8percent,or$29.4billion;and– Anestimated591,000netnewjobs.

• Thiswashaltedin2012andthecurrentrateremainsat11.5percent.

TheOCCrecommendsthattheGovernmentreinstatethescheduledprovincialCorporateIncomeTaxreductionfrom11.5%to10%.

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Employer Health Tax (EHT)

• EHTpremiumsarecalculatedbymultiplyingtotalOntariogrosscalendaryearpayrollbythetaxrateapplicabletothatamount.Forgrossemploymentover$400,000/yeartheEHTtaxrateis1.95%.

• Areductioninthetaxablepayrollamountswouldlowertheburdenonbusinessesandprovidetheabilityforgreaterproductivityandcompetitivenessthroughincreasedcapitalinvestments.

TheOCCrecommendstheGovernmentlowertheEHTratefromthecurrentrateof1.95%.

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Charity HST Rebate

• ThecharitablesectorhasexpandedrapidlyinthelasttwodecadesandisnowamajorsectorinCanadaandOntario.Thisgrowthhassupportedalargenumberofjobsandiscreatingsignificanteconomicgrowth.

• Thisgrowthisdrivenbydemandforanincreaseinthenumberofcharities.Aspopulationgrows,ages,andbecomesmorediverse,thedemandfortheservicesthatthesectorprovides— health,socialservices,recreation,cultureandsoon-tendtoincrease.

• CharitiesandpublicinstitutionsresidentinOntarioqualifyforan 82% rebateofthe provincial partoftheHSTon non-selected publicservicebody activities.

TheOCCrecommendstheprovincialgovernmentincreasethecharityHSTrebateto100%toensurethatthesectorcancontinuetomeetrapidlyincreasingdemands.

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Research & Development and Innovation Tax Credits• Inaglobalized,technology-driveneconomywherebusinessesareexpectedtoinnovate

regularly,CanadamustinvestinR&Dinordertostaycompetitive.

• In2016,theGovernmentofOntariomadesignificantcutstotheResearch&DevelopmentandInnovationTaxCreditsinfavourofspecificgrantsprograms.

• WhenCanadianandOntarioresearchandinnovationarefallingbehind,cuttingtheprogramsthatencourageandnurtureprivatesectorR&Dcanonlyexacerbatetheproblem.

TheOCCrecommendsthattheProvincialGovernment:• RestoretheOntarioResearch&DevelopmentTaxCreditto4.5%,asitwasbeforethe2016

Budget.• RestoretheOntarioInnovationTaxCreditto10%,asitwasbeforethe2016Budget.

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Small Business Offsets

• Ontario’sgovernmentismakinganefforttoboostentrepreneurshipandcreatenewandinnovativebusinesses.Theobjectivesofthisefforthasbeentoenablesustainableandlong-termeconomicgrowth.

• Despitetheseencouragingresults,theexpectedeconomicrewardsofbusinesscreationhavenotbeenrealized.

TheOCCisproposingfurtherrecommendationstoencouragemethodstoimprovethechallengesfacingthescaling-upofsmallbusinessesinOntario.1. LowertheprovincialsmallbusinessdeductioninconjunctionwithCITdeductions.2. AllowallOntario-incorporatedprivateenterprisestoqualifyforasmallbusinessdeduction.3. Exploreopportunitiestocreateabracketedsmallbusinessdeduction.4. Exempthigher-growthfirmsincrementalincometotheirrespectivecorporatetaxes.5. UtilizetheOCCinthecreationofthegovernment’sannouncedSMEconciergeservice.

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Ontario Small Business Deduction (SBD)• ThecurrentOntariosmallbusinessdeductiontaxrateof4.5%isthesecondhighestinCanada.

– Manitoba’sSBDwasreducedto0%in2015,whileBritishColumbiaandAlbertaareat2.5%and2%respectively.

• AreductionintheSBDtoalevelcomparablewithotherprovinceswouldallowsmallbusinessestoremaincompetitive.

• Currently,toapplyforOntario’sSMD,abusinessmustbea“Canadian-controlledprivatecorporation”(CCPC).ForOntario’ssmallbusinessestoscale-upandremaincompetitive,theCCPCruleshouldbechangedtoencourageinvestment.

• RemovaloftheCCPCrequirementwouldmeanthatforeignentrepreneursandinvestorswouldbeencouragedtoestablishwithinOntarioandutilizetheSBDtosupportandgrowOntario’ssmallbusinesseconomy.

TheOCCrecommendstheGovernmentlowertheprovincialsmallbusinessdeductiontaxrateinconjunctionwithCITdeductions.Additionally,thesmallbusinessdeductionshouldbeavailabletoOntario-incorporatedprivateenterprises(OPEI),allowingforincreasedinvestmentandinnovationintheprovince.

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Bracketed Tax and Income Exemptions• Ontariohasabove-averageearlystageentrepreneurialactivityamonginnovation-driven

economies,however,thisactivityhasnotresultedinfurthergrowthandinnovation.

• Overthepasttenyears,71percentofthejobscreatedintheprivatesectorcanbeattributedtotheactivitiesofSMEs.

• Asaresultofincreasesinbusinesstaxrateswhenannualincomeincreasesabove$500,000Ontario’ssmallbusinessesarenotencouragedtoseekopportunitiestoscale-up.

TheOCCrecommendsthecreationofabracketedsmallbusinessdeductionratherthanaflatrateforallbusinesseswithanannualincomelessthan$500,000.

TheOCCencouragesOntariotoexemptabusiness’annualincrementalincomefromtheSBDorCIT.Conditionstoqualifyfortheexemptionshouldbesettotargethigher-growthfirms.

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One-Window Service

• TheOCChaslongurgedgovernmenttoestablisha“one-windowregulatoryconciergeservice”toassistsmallbusinessesinunderstanding,navigating,andachievingcompliance.

• TheOntariogovernmentannouncedinMay2017thatitwillintroducenewlegislationtocutunnecessaryredtapeforbusinessbyintroducinga“one-windowservice”tohelpSMEs.

• Theprogrampromisestohelpsmallbusinessesaccesssupport,informationandresourceswhennavigatingOntario’sregulatoryenvironment.

• ByutilizingtheOCC’sdepthofunderstandingofthechallengesfacingOntario’sbusinessescommunity,ourcapacitytoleverageexistinglocalchambersofcommerceandregionalboardoftradesand,ourapproachtosolution-orientatedmethods,theOCCisataverystrongpositiontoworkwiththegovernmenttofacilitateanddelivervaluebasedprogramsforbusinessesacrosstheProvince.

TheOCCshouldundertakethecreationofthenewbusinessconciergeservicetoassistOntarioSMEswithregulationsandcompliancerequirements.

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Our Request

Followingthispresentation,theOCCencouragesyouto:1. VisittheKeepOntarioWorking.cawebsite2. SendlettersorphoneyourlocalMPPtoinformthemofyourthoughts.3. SharetheimpactsofBill148withyourfamily,friends,co-workersand

customers4. RecommendoffsetoptionstotheOCCwhichwillensureOntario

businessesremaincompetitiveandsuccessful.

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KarlBaldaufVice-President,PolicyandGovernment

Relationskarlbaldauf@occ.ca |647-888-2866