Friday, November 26, 2010

Wall government refusing to release Minimum Wage Board minutes; axes equal representation for employees and employers on the board

The Saskatchewan Party government’s latest attack on workers occurred this summer when Labour Relations and Workplace Safety Minister Don Morgan announced the minimum wage would remain unchanged until the Minimum Wage Board conducts its next review in 2011.

The stage was also set for the introduction of a “training wage” that would see new entrants to the workforce or people who change jobs discriminated against by paying them less than the minimum wage.

Welcome to the New West, courtesy of Premier Brad Wall.

The despicable assault began on July 9, 2009, when Wall signed an order in council firing the entire minimum wage board and replacing them with business people and friends of the Saskatchewan Party. The new board members are:

▪ Wayne Watts, Saskatoon (Chairperson)
▪ Wayne Sannes, Moose Jaw
▪ Margaret (Peggy) Hasein, Biggar
▪ Judith Riddell, Carlyle
▪ Sandy Ewert, Martensville

Mr. Watts is president of Liquid Capital Prairie Corp. in Saskatoon. According to Saskatchewan Party financial statements filed with Elections Saskatchewan, Watts has contributed $2,452.24 to the party since 2006. He also attended the party’s leader’s dinner at TCU Place in Saskatoon on April 29, 2010. Tickets to the event cost $250.00.

Mr. Sannes and his wife owned Wayne & Laverne’s Pizza & Steak House in Moose Jaw. The restaurant closed in March 2008 after over 20 years of business.

Ms. Hasein and her husband Daryl own The Independent Printers Ltd. and publish a weekly newspaper, the Biggar Independent. On January 18, 2010, the Wall government announced that Mr. Hasein had been appointed to the Saskatchewan Rate Review Panel.

Ms. Riddell is the executive director of the Cornerstone Regional Economic Development Authority, based in Carlyle.

Ms. Ewert, a registered nurse, was the Saskatchewan Party candidate for the Saskatoon Nutana riding in the 2003 provincial election.

According to a redacted ministry briefing note dated January 18, 2010, the board chair is paid $230 per day and members receive $155 plus expenses at current government rates.

In the past, the composition of the minimum wage board has included equal representation from business and labour. In 2007, employers were represented by Clarke Curtis and Luisa Graybiel, and the employees by Carol Cisecki and Dan Wirl. The chairperson was John Yeo.

The new board’s report does not identify the business and labour representatives. With that in mind, an email was sent to Labour Relations and Workplace Safety requesting that information.

Mike Carr, the deputy minister of labour relations and workplace safety, responded in a letter dated November 18, 2010, stating:

“Section 15 of the Labour Standards Act directs that the Minimum Wage Board consist of five members, one of whom will serve as Chair. The legislation states that at least two of the Board members must be female.

“Beyond those measures, however, there are no other specific requirements with respect to the composition of the Board. For example, there is no provision in the legislation for equal representation for employees and employers on the Board.

“The current members of the Board were appointed to act in the public interest and are charged with serving the people of Saskatchewan to the best of their abilities.”

The January 18 briefing note shows that the Wall government cared little about the concept of equal representation saying the existence of the long standing practice was only “by tradition (not legislation).”

The Wall government stripped the process of any sense of fairness, stacked the board in its favour, and didn’t bother to tell the public.

It should be noted that Mike Carr was appointed (without competition) associate deputy minister of Advanced, Education, Employment and Labour on March 6, 2008, at a salary of $155,000 per year. On June 29, 2010, he was appointed deputy minister of labour relations and workplace safety at a yearly salary of $192,036, a 23.89 per cent increase after just 2 years and 4 months on the job.

Prior to his appointments, Carr was co-chair of the Saskatchewan Chamber of Commerce’s human resources committee. He is also a contributor to the Saskatchewan Party.

Under Section 15 of The Labour Standards Act, the board’s mandate includes reviewing Saskatchewan’s minimum wage every two years, which currently sits at $9.25 an hour.

On September 25, 2009, the province announced that a review of the minimum wage was underway and invited the public to submit their opinions and concerns by October 30, 2009.

The board submitted its report (dated December 11, 2009) to former Advanced Education, Employment and Labour (AEEL) Minister Rob Norris on December 30, 2009. The Wall government sat on the results for ten months. Only after public criticism were they released on July 30, 2010, the Friday of a long weekend. The board made the following recommendations:

1) That the minimum wage be maintained at its current rate of $9.25 per hour, until the next review;

2) That further consideration be given to the indexation of the minimum wage and that a more extensive review of the methodology for indexation be undertaken with recommendations to be presented to the Minister in 2010;

3) That a training wage of 90 per cent of the minimum wage be instituted, rounded up to the nearest 5 cents. The training wage would apply for the first 6 months of employment with the employer. This rate would only apply to employees hired after the implementation of the regulation; and,

4) That the Government consider alternate ways to assist low wage earners through changes in the following: Basic personal income tax exemption; limit the clawback of social assistance benefits; and, promotion of continuing education.

The Wall government adopted the first recommendation; ordered the board to conduct a more extensive review of the second and report back by December 31, 2010; and, was silent on the third and fourth recommendations.

The “training wage” is a nasty piece of business that the Canadian Federation of Independent Business has been after for a long time. The organization has a very close working relationship with the Saskatchewan Party. Now that the idea is on the table it’s only a matter of time before the Wall government endorses it.

As far as the Wall government is concerned, poor people in Saskatchewan make enough money.

“We have implemented significant increases in the minimum wage since we came to office,” said Morgan in a July 30, 2010, news release. “Low income earners have also benefited from changes in income tax policy with 80,000 people being removed from the tax rolls.”

As a minister, Morgan receives an annual salary of $132,904. As a full-time hourly wage that works out to $63.89 per hour, almost seven times the minimum wage.

On October 1, 2010, the Wall government turned down an access to information request for copies of the agendas and minutes to any meetings of the minimum wage board that occurred between September 1, 2009, and December 31, 2009.

“Access to the records relevant to your request is denied, pursuant to section 17(1)(f)(i) of The Freedom of Information and Protection of Privacy Act,” said Mike Carr, the deputy minister of Labour Relations and Workplace Safety.

This section of the Act pertains to advice from officials and is a discretionary exemption. It permits government institutions to refuse access to a record that could reasonably be expected to disclose agendas or minutes of a board, commission, Crown corporation or other government body.

In response to a follow-up query, the ministry’s privacy officer confirmed in an email on October 19, 2010, that eight documents totaling 11 pages are being withheld in their entirety. What is the Wall government hiding?

There are significant differences between the latest minimum wage board report and the last one conducted in 2007 under the previous Saskatchewan NDP government.

The 2007 review was guided by a set of four ‘objectives,’ two of which were: Review statistical, economic and social data that pertain to the minimum wage; and, consider the social and economic needs of the minimum wage worker.

The 2009 review, on the other hand, was guided by three ‘principles’: Sustainability, competitiveness, and prosperity. It appears the board did not concern itself with such things as reviewing social data or considering the social and economic needs of low wage earners.

The Watts-led board was instead asked to “ensure that the minimum wage guarantees the people of Saskatchewan realize the benefit of active participation in a growing economy.” The board, in its report, never gets around to explaining what this gobbledygook really means or how its recommendations achieve this principle.

What is known, however, is that poverty and food bank usage in Saskatchewan is escalating, the gap between rich and poor is among the largest of all provinces, level of child poverty is appalling, Northern Saskatchewan is one of the five poorest regions in the country, the Salvation Army in Saskatoon is having to turn people away due to lack of capacity, and apartment rental rates in Saskatoon and Regina have skyrocketed.

The Canada Mortgage and Housing Corporation’s (CMHC) rental market report for October 2006 shows that the average rate for one and two bedroom apartments in Saskatoon was $496 and $608 respectively. In Regina, it was $515 and $619. As of April 2010, those same units were going for $747 and $923 in Saskatoon; and $717 and $858 in Regina.

A single person working 40 hours a week at the current minimum wage would gross $1,603 a month and use 46.6 per cent of that to rent a one bedroom apartment in Saskatoon. In Regina, it would be slightly lower at 44.7 per cent.

In October 2006, when the minimum wage in Saskatchewan was $7.55 an hour, a single person earning the minimum was using 37.9 per cent and 39.3 per cent of their monthly gross income ($1,308) on rent in Saskatoon and Regina.

The Wall government’s answer to fighting poverty is to kick people when they’re down.

In its report, the Watts-led minimum wage board fails to explain where the principles that guided their deliberations originated.

The answer is they came from former Advanced Education, Employment and Labour Minister Rob Norris in a two-page letter to Watts dated September 8, 2009, a copy of which was obtained through an access to information request. The board adopted the Wall government’s principles word for word.

The Wall government’s insistence on using competitiveness as a key factor killed any chance of a minimum wage increase. It was cited by the board as the main reason for kiboshing the idea.

“There is a concern that a change in the minimum wage at this time could have a negative impact on the economy,” the board said in recommending no increase.

The concern was from the business community. With this bunch, no time is ever the right time to hike the minimum wage.

The board’s emphasis was on Western Canadian competitiveness, something that was absent from the 2007 report.

“Saskatchewan’s minimum wage is higher than the other western Provinces. This has a direct impact on the competitiveness of Saskatchewan businesses with their counterparts in the other provinces,” the report states on page 11.

With Alberta’s minimum wage stalled at $8.80 per hour and British Columbia’s at a disgraceful $8.00 per hour, there was no hope that Saskatchewan’s rate would be viewed as being competitive by the pro-business board. Until the westernmost provinces match or surpass Saskatchewan’s rate the likelihood of the right wing Wall government increasing the minimum wage any time soon is remote at best.

Only Manitoba, which increased its minimum wage on October 1, 2010, to $9.50 an hour, is higher than Saskatchewan’s, but the Wall government’s obsession with competitiveness has always been focused on Alberta and British Columbia.

Another big difference between the current and previous reports is that in 2007 the board not only reviewed the written submissions to identify the concerns of stakeholders and options for addressing minimum wage issues, it also “considered emerging social and economic issues by analyzing statistical data.” Through this process the board identified seven trends. The following are the top three:

Trend Number One: “The rationale for opposing an increase was the high cost of operating a business. An increase will cause a negative impact on hiring part-time employees and an increase will cause layoffs of minimum wage workers.”

The board found that a large proportion of total minimum wage earners work in two sectors: the accommodation and foodservices industry and the retail sales industry, and noted that sales volumes in these industries rose approximately 100% from 1991 to 2006. Whereas, the minimum wage increased by approximately 50%.

Trend Number Two: “Government should raise the basic exemption of low-income earners thereby eliminating the claw back effect of taxation on the minimum wage and low-wage earners.”

The board found that while every taxpayer would benefit from an increase in the personal exemption, figures show that very few low-income workers would benefit. An increase to the basic personal income tax exemption is of no benefit to single parents and one-income families. “In addition, tax revenues for the province would fall by an estimated $53.6 million for every $1,000 increase in the personal exemption. The conclusion is that increasing the personal exemption is not a very good way of helping low-income workers,” the board said.

Trend Number Three: “An increase to the minimum wage would reduce the number of jobs and the number of hours available to minimum wage workers.”

According to a Sask Trends Monitor study prepared for the board, “there is no obvious relationship between the number of paid workers in the retail trade sector and increases in the minimum wage.” The study also states, “Increases in the minimum wage during the 1990s also had no observable impact on the number of paid workers in the accommodation and foodservices sector.”

The board noted that two increases in 2002 may have contributed to employment declines in restaurants in 2003 and 2004, but this coincided with more restrictive smoking regulations.

“Hence, over time there does not appear to be verifiable evidence that minimum wage increases have resulted in employment losses in the two main sectors of the economy with minimum wage workers,” the board said.

The board also found that after numerous minimum wage increases between 1999 and 2006, the average employment rate provincially, and in the accommodation and foodservices sector, grew.

By contrast, the Watts-led board in 2009 ignored these types of trends altogether. It appears no effort was made to update the previous board’s findings. The board instead kept its analysis to a minimum, giving blanket endorsement to the business community’s demands that the provincial government leave the minimum wage alone and focus on raising the basic personal income tax exemption.

“The Board recognizes that the 2008 increase of the basic personal income tax exemption by $4,000 was a positive impact on the provincial economy,” the 2009 report states.

“This increase resulted in 80,000 low income tax payers no longer paying income tax. In addition, the increased exemption resulted in more personal disposable income of approximately $440 per taxable individual.”

For low income earners, the extra $440 a year is more than likely gobbled up by outstanding bills or rising costs.

The board added: “It is the Board’s belief that further consideration of the benefit of increasing the basic personal income tax exemption should be contemplated to ensure that more money is in the hands of residents of the Province which in turn will stimulate the economy.”

The Watts-led board steers clear of explaining how the provincial treasury is supposed to absorb another hit.

The so-called ‘historic’ tax cuts announced by Premier Brad Wall on October 21, 2008, were retroactive for 2008 and cost the provincial government an estimated $334 million in that fiscal year and about $300 million thereafter.

Depleting the province’s fiscal capacity reduces its ability to finance important public programs. But then again, that’s what the business community wants. Less programs and services mean less government.

The justification for freezing the minimum wage, which has increased 16.3 per cent since January 1, 2008, is that it has risen faster than the rate of inflation.

Peter Gilmer, the Regina Anti-Poverty Ministry’s executive director, says that line of thinking is faulty.

“That argument is based on a premise that ignores [the fact] that, for two decades, the provincial minimum wage fell further and further behind the provincial standard of living and the low-income cut-off line. It’s only since 2005 that [the Province] has been in a process where the government committed itself to an approach to linking the minimum wage to the low-income cut-off line.” [Just like old times (Planet S Magazine, August 12, 2010)]

It’s interesting to note that when Macleans revealed last year that in the past 12 years, there’s been a 444 per cent salary increase for Canada’s top CEOs, there were no outcries from the business community.

Analysis by Susan Mohammad and Duncan Hood showed that the top 10 earners collected a total of $60.7 million in 1995 — by 2007, that number had jumped to $330.3 million. For example, Paul Desmarais, CEO of Power Corp, made more than $5 million in 1995; in 2007, his take-home was more than $29 million. [Cashing in: Canada’s CEO salary surge (Macleans, May 1, 2009)]

Nope. Not a peep out of the CFIB, Saskatchewan Chamber of Commerce, Saskatchewan Business Council or North Saskatoon Business Association on that story. They save their energy for beating up on the employees of the businesses they represent.


The following summarizes information contained in the submissions made by various business and industry lobby groups to the minimum wage board:

Canadian Federation of Independent Business – Saskatchewan Office
▪ no minimum wage increase
▪ no indexing of the minimum wage
▪ introduce a “training wage”
▪ increase basic personal income tax exemption

Saskatchewan Business Council
▪ no minimum wage increase
▪ increase basic personal income tax exemption

Retail Council of Canada – Manitoba/Saskatchewan Office
▪ no minimum wage increase
▪ no indexing of the minimum wage
▪ increase basic personal income tax exemption

Saskatchewan Chamber of Commerce
▪ no minimum wage increase
▪ no indexing of the minimum wage
▪ increase basic personal income tax exemption

North Saskatoon Business Association
▪ no minimum wage increase
▪ increase basic personal income tax exemption

Canadian Restaurant and Foodservices Association*
▪ no minimum wage increase
▪ introduce wage differentials for trainees and tipped servers
* The CRFA is not listed in the Minimum Wage Board’s report as having made a submission, but in a news release on August 19, 2010, the lobby group said it met with the board in late 2009 “to encourage a wage freeze, as well as wage differentials for trainees and tipped servers.”

Letter denying access to minimum wage board agendas and minutes

Premier Brad Wall fires minimum wage board


At 11:52 AM, Blogger amypeters said...

This was an interesting post. I didn't know that there was so much going behind the scenes of this change. In addition, I am always curious about how things like this will impact other parts of our lives. If the new board's review ends up hurting workers more, will things like rent in Saskatoon also change? I know there is no real set answer for that, at least not yet, but I like to think about these things.


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