A proposal from Ontario’s new Tory leader to eliminate income tax for cash-strapped workers in the province is coming under fire from critics and the governing Liberals, who say raising the minimum wage provides more relief for those struggling to make ends meet.
Labour Minister Kevin Flynn took aim at Doug Ford’s plan in a news conference Thursday morning, saying the latest move by the Progressive Conservative leader and his party shows they “just don’t care about workers.”
“I think Doug Ford’s beginning to emerge as a person that’s very, very interested in helping a group of people, but I think it’s the wealthy elites,” Flynn said. “I think it’s those people who are doing very well in today’s economy and what he’s doing is he’s really ignoring those people that really need the help the most.”
Ford, who was selected to lead the Opposition last weekend, has said that if the Tories form government after the spring election, he would freeze the minimum wage at $14 rather than bumping it to $15 next year as the Liberals plan.
The former Toronto city councillor has told media outlets he instead wants to eliminate income tax for those making less than $30,000. As premier, he would only have jurisdiction over the provincial income tax.
Ford did not immediately respond to a request for comment.
The minimum wage hike was a key topic in the Progressive Conservative leadership race, with all four candidates criticizing the Liberals for what they said was insufficient consultation on the issue and vowing to either slow or halt the increase.
The Liberals, however, pointed Thursday to an economic analysis that suggests low-income workers would benefit more from a bigger paycheque than fewer taxes.
Sheila Block, a senior economist with the Canadian Centre for Policy Alternatives, said the most recent data from the Canada Revenue Agency show the majority of those who earn less than $30,000 already don’t pay income tax, due to existing deductions and credits.
Those who do pay taxes — about a third of people who make less than $30,000 — paid an average of $485 that year, Block said.
In comparison, she said, the minimum wage hike would give people significantly more money — close to $2,000 a year on average for those working 37.5 hours per week — than the tax cut would save them.
Even once income tax is deducted, those people would “still be left ahead,” she said.
“As a policy choice, if your focus is on putting money in the pockets of low-income households, this is the way to do it,” she said.
“We also have to look at what’s lost in terms of public services that everybody relies on if we’re cutting taxes as opposed to expecting employers to pay something closer to a living wage. Everybody relies on public services but low-income people can’t buy their way out of it.”
The Ontario government’s decision to increase its minimum wage to $14 per hour this year and to $15 in 2019 has faced significant pushback from business groups, who have said it will force employers to find other ways to cut costs, such as hiring less and increasing automation.
The Tories have also denounced the pace of the increase, while New Democrats have reproached the government for not boosting the minimum wage earlier.
The labour minister acknowledged Thursday that the move came late and that it would be “tough” on business.
“The truth is it should have been done earlier,” Flynn said. “We didn’t realize that costs had escalated in the province of Ontario, the cost of living was somewhere in the neighbourhood of $16-$17 an hour, even higher in some areas, and we’d let our minimum wage fall behind.”