2017-07-20 Source: farm.com
A southern Ontario producer is worried she may have to take drastic measures if the province’s minimum wage jumps to $15 per hour by 2019.
Sarah Harrison operates Mazak Farms, a 40-year-old asparagus, garlic and rhubarb farm started by her parents near St.Thomas, with her husband Barry.
The asparagus industry’s farm value in 2016 was more than $24 million, according to OMAFRA.
But Harrison is concerned that, if the Ontario government’s proposal to increase the minimum wage to $15 per hour in the next two years goes through, changes will need to be made.
“It’s going to change the way we farm. We are going to have to do things differently for sure,” Harrison told Farms.com. “Our farm could look very different. We just can’t afford to pay people $15 per hour.
“It just doesn’t make sense in the produce world to have your biggest expense increase by 32 per cent in 18 months.
And the increase in minimum wage could be reflected in grocery stores too.
“Ontario producers compete on a global scale,” Harrison said. “How do we compete with Peruvian asparagus when they pay their people between $5 and $8 per day? There’s no way to bury that cost in the price of your product.”
Mazak Farms employed six people last year. That number dropped to four this year and could fall again to two employees next year.
And it isn’t because they don’t want to pay people enough to feed their families, Harrison said. But the jump from $11.40 now, to $14 per hour by 2018 and $15 per hour in 2019 only scratches the surface of the impact the increases have on small business owners.
“There’s more to it than the $15 an hour,” she said. “As an employer I don’t just pay that (wage). I have to have employment insurance, Workplace Safety and Insurance Board contributions and CPP contributions. For me, it’s more than $15.
“When I processed the employees’ last paycheque, our hourly paid, minimum wage employees made more money than we did and that’s at $11.40 per hour,” Harrison said. “We aren’t saying people aren’t worth the minimum wage, we’re saying there has to be a better way of implementing this.”
But Harrison isn’t the only member of Ontario’s agricultural community to voice concerns over the potential wage increase.
A study commissioned by the Ontario Fruit and Vegetable Growers’ Association (OFVGA) outlined the potential impact a $15 per hour minimum wage could have.
“…the costs of such a dramatic increase in minimum wage would cost Ontario agriculture $406 million, with an estimated $225 million in costs just to horticulture,” OFVGA said in a June 18 release about the study.
And a fruit producer from Simcoe County echoed Harrison’s warning that if the minimum wage goes up, so will production costs and, ultimately, food prices.
“My biggest single cost of production is hand labour and that’s going to increase by 30 per cent in about 18 months,” Morris Gervais, operator of Barrie Hill Farms, told Farms.com in June. “If a quart of Ontario strawberries costs $4.00 now, it could cost $5.00 next year.”
The Ontario Federation of Agriculture and OMAFRA have also suggested an increase in minimum wage could put pressure on the province’s agricultural industry.
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