Minimum Wage Increases Do Not Lead to Job Loss: AFL analysis shows service industry employment has increased after minimum wage adjustments
"Employers in the service sector have convinced the current Employment and Immigration Minister that the sky will fall if the minimum wage is given even a modest boost. But the evidence from right here in Alberta shows that increasing the minimum is something that is all up side and no down side," says McGowan. "There is much to be gained and nothing to be feared."
The Alberta Federation of Labour conducted a five-year analysis of the occupations most likely to pay minimum or low wages - retail sales, cashiers and clerks, food and beverage service, and travel and accommodation retail services.
The AFL examined the number of Albertans employed in these sectors after increases in the minimum wage. Since 2005, Alberta has made four upward adjustments to the minimum wage and every time, the number of Albertans working in retail sales, food and beverage service, and travel/accommodation increased after the minimum wage went up.
- In 2005, the minimum wage was boosted from $5.90 to $7.00 per hour. One year after the increase, there were 26,700 more Albertans working in the food and beverage, service, and travel/accommodation industries.
- In September 2007, the Alberta government boosted the minimum wage from $7.00 to $8.00 per hour. In April 2008, they increased it again to $8.40 per hour. In the 8-month interval between increases to the minimum wage - and just as the global credit crisis was beginning to shake business and consumer confidence - the number of Albertans working in the food and beverage, retail, and travel/accommodation industries grew from a total of 342,800 employees to 363,300.
- The minimum wage went from $8.40 to $8.80 in April 2009. There were 380,100 Albertans working in service industries in April 2009. There are currently 399,500 Albertans working in service industries. At the same time, Alberta unemployment increased from 6% in April 2009 to 7.4% in May 2010.
"When Minister Lukaszuk chose to freeze the minimum wage, he justified the decision by claiming that tying the minimum wage to the average weekly earnings index costs jobs. Our research shows these arguments aren't based on evidence, but are simply the product of some employer groups' imaginations," said McGowan.
"If hardship is claimed, it should be accompanied by proof. But there is no credible, publicly available evidence to show that predictable and reasonable increases to the minimum wage lead to job losses," concludes McGowan.
McGowan's presentation was one of several made Wednesday to an all-party committee of the provincial Legislature that is reviewing the government's current policy of indexing the minimum wage annually to match changes in the Alberta's average weekly earnings index. The policy was suspended earlier this year by Employment and Immigration Minister Thomas Lukaszuk, pending the review.
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Media contact:
Gil McGowan, President, Alberta Federation of Labour, 780-218-9888
Source: Statistics Canada, National Occupational Classification, Alberta, monthly, 2005-2010. CANSIM.
2010 Jun Speaking Notes - Presentation to Alberta Legislative Assembly Standing Committee on the Economy - Minimum Wage
As most of you know, the AFL is Alberta's largest labour organization, representing 29 unions in the public and private sectors with a collective membership of about 140,000 Albertans.
On behalf of that membership I'd like to thank you for this opportunity to present to this committee on the important question of how to set Alberta's minimum wage.
I've often been described in the media as one of the government's most vocal and persistent critics.
I'm the first to admit there's a lot of truth in that label.
On behalf of my members, I've raised concerns about this government's approach to workplace health and safety; its approach to labour law; its approach to temporary foreign workers; and its approach to development in the oil sands... among many other things.
So you can imagine my surprise when, two years ago, I found myself in agreement with a major decision made by the Premier and his then Minister of Employment, Hector Goudreau.
And I didn't just agree...I actually wanted to shout my enthusiastic support from the roof tops.
The decision I'm referring to, of course, was the decision to increase the minimum wage - and even more importantly - to explicitly tie future increases to changes in the average weekly wage index.
At the time, the premier and the minister basically said that whenever other Albertans got a raise, the lowest paid Albertans should get a raise too.
It was the same logic - and the same mechanism - that the government used to determine pay increases for MLAs.
I had a few quibbles. I thought the starting base wage should be set a little higher. And I thought the Alberta Consumer Price Index might have provided a more appropriate benchmark.
But, on balance, I felt the government had done the right thing for the right reasons. It was a simple system; a transparent system; a predictable system; and a fair system. It was, I would argue, an example of public policy at its thoughtful best.
I'm a strong believer in giving credit where credit is due, so I wasn't shy about praising the government. I did it in writing; I did it press releases and I said it to anyone who would listen.
Whole-heartedly supporting the Alberta government on a major policy issue was uncharted territory for me - but honestly, it felt good.
Unfortunately, today find myself in more familiar territory.
We're here because the new Minister of Employment, Thomas Lukazuk, has called for a review of Alberta's Minimum Wage policy and has suspended the small increase that was supposed to be given to minimum wage workers this spring.
To say that I'm disappointed by this turn of events would be an understatement.
When the Minister made his announcement about the freeze and the review, he said he was doing so because many employers had told him that an increases in the minimum wage, however small, would lead to significant job loss.
That's really why we're here today - because business owners - especially business owner in the service sector - played the jobs card ... and they did it during a recession.
To be fair, anyone sitting in the Employment Minister's chair, has to take concerns about job loss seriously - especially at a time when the number of unemployed is increasing.
But if you're a business or a business lobby group that is asking the government to take money out of the pockets of our poorest citizens, then the onus is on you to back up your arguments with facts, not fear.
Anecdotes aren't evidence and rhetoric is not reality.
But that's what this review is based on: unsubstantiated anecdotes; overheated rhetoric; and thinly disguised self interest.
I say all of this because when it comes to the argument that is at the core of this debate - the argument that even a small increase in the minimum wage would kill jobs - there is no evidence.
In fact, what the evidence shows is exactly the opposite. What the evidence shows is that employment in the low-wage service sector has actually INCREASED in Alberta whenever we've increased the minimum wage.
The Alberta Federation of Labour has conducted an five-year analysis of the occupations most likely to pay minimum or low wages - occupations in retail sales, cashiers and clerks, food and beverage service workers, and those employed in travel and accommodation.
Since 2005, Alberta has made four upward adjustments in the minimum wage...and every time the number of Albertans working in low wage jobs went up.
In 2005, the minimum wage was boosted from $5.90 to $7.00/hour. One year after the increase, there were 26,700 more Albertans working in the food and beverage, service, and travel/accommodation industries.
In September 2007, the Alberta government boosted the minimum wage from $7.00 to $8.00/hour. In April 2008, they increased it again to $8.40/hour. In the 8-month interval between these increases - and just as the global credit crisis was beginning to shake business and consumer confidence - the number of Albertans working in the food and beverage, retail, and travel/accommodation industries grew from a total of 342,800 to 363,300 employees.
Finally, in April 2009, the minimum wage increased again - from $8.40 to $8.80 per hour.
Around this time overall unemployment in Alberta had increased from 6% in April 2009 to 7.4% in May 2010. If increases in the minimum wage really killed jobs, you'd think surely at this time, when other jobs were being shed, this would happen. But it didn't.
- Employment in food and beverage service, retail sales, and travel/accommodations actually grew in the year since the last minimum wage increase.
- Albertans employed in retail sales as clerks and cashiers grew from 129,600 in April 2009 to 142,400 individuals in May 2010
- Albertans working in food and beverage service went from 64,700 in April 2009 to 68,700 in May 2010
- Albertans working in travel and accommodation services grew from 185,800 in April 2009 to 188,400 individuals in May 2010.
So why have all the conservative predictions about job loss related to minimum wage turned out to be empty phantoms. Partly because they we motivated more by the self-interested desire by some employers to keep wages low. But more importantly, those predictions were wrong because they were based on economic models as opposed to empirical evidence.
Models only work if the assumptions that they're based on a true ... that's why they're dangerous tools to rely on for policy making. Empirical evidence, on the other hand, is by definition true ... it's reality. And reality, not ideologically driven conjecture, should be the basis of all public policy - especially those policies that affect our most vulnerable citizens.
What the empirical evidence from right here in Alberta shows is that there is no substance to the argument that modest, predictable increases in the minimum wage kill jobs. It's a myth, plain an simply.
Unfortunately, it's not the only myth that has been clouding the debate on minimum wage.
For example, there's the minimum wage is a living wage. It's not.
An Albertan earning the minimum wage of $8.80/hour, working 40 hours per week and 50 weeks per year earns $17,600 per year before taxes, which is $4,533 below the before-tax Low-Income Cut-Off for an individual living in a city, better known as the poverty line.
If one is the head of a lone-parent family with two children in Edmonton or Calgary, a full-time hourly wage of $10/hour - the wage earned by 6.9% of working Albertans - still sees that family earning $13,133 per year less than the before-tax Low-Income Cut-Off.
Another myth has to do with the number of Albertans who struggle with low wages. Some people in government and business fond of reminding Albertans that very few workers earn minimum wage - as if this is a justification for keeping the minimum wage far below any accepted measure of poverty.
While it is true that only 1.4% of Alberta workers earn the bare minimum, fully 6.9% of the Alberta workforce earns less than $10/hour and 13.7% earned less than $12/hour, a wage that still constitutes a life of poverty.
The minimum wage is a floor. If the floor is too low, all workers at the lower end of the income ladder suffer... they're dragged down. That's why the minimum wage matters, even if only a small number of workers actually earn that wage.
Another myth is that low-wage earners are predominantly high school students living with their parents, who only work to pay for the latest video game or new cell phone.
This stereotype is an insult to the tens of thousands of Albertans - predominantly women - who are working for low wages in order to put food on the table.
59% of low-wage earners (less than $10/hour) are over 20, and 42% are over 25.
In other words, 42% of low-wage earners are likely to have family responsibilities.
The final myth that I want to address is the myth that Alberta is doing enough for its poor, especially its working poor.
In his letter of invitation for groups to present to this review, Minister of Employment and Immigration Thomas Lukaszuk urged the Standing Committee on the Economy to examine practices in other jurisdictions.
Minimum wage standards are part of an overall strategy to combat poverty and ensure economic security for all Albertans.
However, Alberta is in a minority of provinces without some form of anti-poverty strategy. For example:
- New Brunswick, Nova Scotia, Ontario and Manitoba all have comprehensive anti-poverty strategies, and part of the strategy in all of these provinces is ensuring the minimum wage keeps pace with the economy.
- 6 out of 10 provinces have provincial child benefits similar to the federal Child Tax Benefit, which supplement incomes for families headed by low-wage earners. Alberta is in the minority of provinces without a provincial child benefit.
So what conclusions can be drawn from all of this?
The main conclusion, I think, is that Alberta can and should do better. The other main conclusion is that Alberta can and should base its policy on minimum wage on facts and empirical evidence, not hearsay, rhetoric and self-interested fear-mongering.
And what do the facts tell us?
They tell us that too many working Albertans are suffering with low wages.
They tell us that regular, predictable increases to the minimum wage would help those struggling Albertans.
And they tell us that increases in the minimum wage have not in the pass and will not likely in the future result in the loss of jobs.
The bottom line for us is that Alberta can afford to be a leader in fighting poverty - and any serious strategy to fighting poverty has to include a regularly indexed minimum wage that is at least close to being a living wage.
We believe that anyone who works full-time, full-year in our province should earn a wage that allows them to stay out of poverty. The current minimum wage doesn't do that - and without a system for guaranteeing regular increases, the situation will only get worse as the value of the minimum wage is eroded by inflation.
The Alberta Federation of Labour applauded the government's 2007 decision to tie increases in the minimum wage to the average weekly earnings index.
We recommend that the government return immediately to following its own policy, and boost the minimum wage immediately to $9.05, as it was supposed to happen earlier this year.
In addition, as the economy recovers, the government should consider a one-time boost to the minimum wage in the months ahead.
As we have seen, thousands of Albertans earn less than $10/hour, and many of them are likely to have family responsibilities.
Boosting the minimum wage to $10/hour in the months ahead is unlikely to have any effect on the economy besides giving low-income families a little more breathing room.
Putting more money in the hands of hard-working, low-income people, according to every economic analysis available, actually provides a boost to the economy in times of recession.
As I've said, this is a government that did the right thing for the right reasons on minimum wage. Please do the right thing again. Thank you.
Gil McGowan, President
Alberta Federation of Labour
June 23, 2010
Calgary
Major labour shortage predicted for oilpatch by 2014
CALGARY - Canada's oilpatch may once again be a magnet for workers from across the country and around the world, an economist said Monday after a study predicted a major labour shortfall in the energy sector by 2014.
Human resources consulting firm Mercer surveyed 135 oil, natural gas and utility companies and found the sector will be short some 24,000 workers in four years.
"I've been expecting labour shortages to lurk their heads once again in Alberta's economy as the recovery takes firmer hold," said Todd Hirsch, a senior economist at ATB Financial.
As a result, a program to recruit temporary workers from abroad may need to be ratcheted up, he added.
"It seemed to take us a long time when the labour shortages were upon us last time to get the temporary foreign worker process up to speed. But once it was up to speed, then companies could bring in those foreign workers very quickly," Hirsch said.
"I think that process will stay in place and I don't think they'll have as much of a time lag getting those foreign workers."
In 2009 and the early part of this year, Alberta saw more people leaving the province than coming in. But that's likely to change, Hirsch said.
"I do expect as Alberta's economy gradually picks up steam and as the oilpatch kicks into fuller gear that we will see more inter-provincial migration," he said.
"There's still a lot of under-utilized workers in other parts of the country where the unemployment rates are higher.
Gil McGowan, president of the Alberta Federation of Labour, was dubious the province will return to a labour market as tight as the 2005 to 2008 boom.
"We're not going back there, so we can't be cavalier about keeping jobs in the province," he said.
The AFL worries about how many high-paying jobs can be sustained in Alberta's oilpatch, given how much manufacturing is being done overseas and how much oilsands processing is being done in the United States.
The Mercer report found the workforce is becoming increasingly divided between the baby boom generation, 45 and older, and employees under the age of 30, so companies will need to tailor their programs to suit the needs of each age group.
Mercer also said companies need to do more to build talent within their ranks, rather than looking outside. It was that "buy talent" phenomenon that caused wages to spiral out of control during the last boom.
Thestar.com, Mon June 21 2010
June 2010: Which Way Will We Pay?; Health-care public meetings; Public education petition
Which way will we pay for our vital public services?
- Despite all the media reports and shrill calls for cuts, Alberta does not have a spending problem, it has a revenue problem. We could raise billions of dollars simply by making our overall tax regime comparable to other provinces. In a new report, the AFL calls for a grown-up conversation about how we can pay for the vital public services Albertans want. To become a part of this conversation, join us as we launch our new report. For details ...
Let the government know how much you still value public health care
- The Alberta government is pressing ahead with its controversial health-care plans, giving the public little opportunity to have a say. After intense pressure, it has reversed its policy on invitation-only meetings on the issue and is now allowing the public to attend. It also has an online survey, full of code words and language that replicates the rhetoric of Ralph Klein's Third Way and the 2002 Mazankowski report. Privatization of our health-care system remains a threat. For information ...
Spending cuts hurt youth and aboriginals just when they need help
- The Alberta government cut spending on employment training programs by $23 million, despite its own numbers showing dramatic job losses in the province. The recession is hurting young people, aboriginal people, workers in forestry industries, and workers in the construction trades, just to name a few. And yet, AFL analysis shows that the government targeted funding cuts to programs that benefit those Albertans. For press release ...
Remember Bill 11? We do
- Bill 11 (Alberta Healthcare Protection Act) was introduced in April 2000. It was a blatant attempt by the government to privatize health care, but opposition through protests organized by labour and the Friends of Medicare forced the government to remove most of the offensive sections. For the poster ...
Urgent Action
Sign the petition on the future of education in Alberta
- The Alberta Government intends to introduce a new School Act. This act needs to be based on some key principles, among them that educational success should not depend on the background, social status or economic characteristics of learners and their families. For Alberta to thrive, all children must have the opportunity to find and nurture their talent. To read more ...
Events
June 21, 2010 - National Aboriginal Day
For more information on community events leading up to the celebration, go to: http://www.aboriginal.alberta.ca/documents/NAD_eventListJune16.pdf
June 22, 2010 - No Free Lunch: Financing the Priorities of Calgarians (Parkland Institute)
120, 333 - 5 Avenue SW
For more information, go to http://www.facebook.com/?ref=home#!/event.php?eid=128332787200279&ref=mf
June 25, 2010 - 6:00 p.m. to 9:00 p.m.; June 26, 2010 - 9:00 a.m. to 5:00 p.m.
Labour Centre Meeting Hall (downstairs), 10425 Princess Elizabeth Avenue. For more information, go to: http://www.edlc.ca/index.php?option=com_content&view=article&id=105:edmonton-municipal-election-training&catid=38:our-schools&Itemid=13
June 22, 2010 - Grande Prairie - Alberta Health Act Consultation
June 23, 2010 - Peace River - Alberta Health Act Consultation
Did you know ...
- $5.5 billion - the amount Alberta could increase its revenue by abandoning the flat-rate income tax that benefits primarily wealthy Albertans;
- $10 billion to $18 billion - the amount Alberta could increase its revenue if it adopted an overall tax regime comparable to other provinces;
- $90 billion - the amount collected in non-renewable resource revenues since Alberta's net debt was eliminated in 1999-2000;
- $4 billion - amount put into the Heritage Fund since 2000;
- $5 billion - amount withdrawn from the Heritage Fund in since 2000;
- $135 billion - amount that would be in the Heritage Fund if all resource revenues had been put in since 2000;
- $7 billion - how much would be generated annually by the Heritage Fund of $135 billion;
- $135 billion - (that's another $135 billion) amount the province would have generated by collecting and saving resource rents at a rate closer to other oil-producing jurisdictions;
- $460 billion - the amount in Norway's Heritage Fund.
Head of Alberta Federation of Labour says foreign workers exploited
Newly released figures from Citizenship and Immigration Canada show that on Dec. 1, 2009, there were 69,000 foreign workers in the province, compared to only 35,000 in 2006.
Alberta's unemployment rate currently sits at 6.6%.
Gil McGowan, head of the Alberta Federation of Labour, calls it a ``lose-lose situation.'' He says it's a bad deal for the foreigners because many are forced to work in poor conditions for low pay that no Canadian would accept.
Meanwhile, he says, Canadian workers suffer because the steady supply of foreigners allows employers to keep wages low.
i880 News, Wed Jun 16 2010
Temporary foreign worker numbers soar
There are nearly twice as many temporary foreign workers in Alberta now as there were at the height of the economic boom.
Newly-released figures from Citizenship and Immigration Canada show that on Dec. 1, 2009, there were 69,000 foreign workers in the province, compared to only 35,000 in 2006.
Alberta's unemployment rate currently sits at 6.6%.
"It doesn't make sense," said Terry Andriuk, head of the temporary foreign worker program at Edmonton's Mennonite Centre for Newcomers.
The head of the Alberta Federation of Labour calls it a "lose-lose situation."
It's been a bad deal for the foreigners, says Gil McGowan, because many are forced to work in poor conditions for low pay that no Canadian would accept. Meanwhile, he says, Canadian workers suffer because the steady supply of foreigners allows employers to keep wages low.
Interestingly, the Alberta government froze the minimum wage at $8.80 per hour earlier this year, arguing that it had no choice in this tough economic climate.
"Canada is a country that was built by immigrants," he says. "But the temporary foreign worker program is not immigration. It's a thinly-disguised guest worker program that creates an under class of exploitable workers."
Recruiters, meanwhile, lure workers to Canada by telling them it's a foot in the door for immigration, says Andriuk, who says some of her clients were told by recruiters in their homeland that they can come here under a temporary visa and work their way to permanent residency.
"It puts entire families in very precarious positions," she says.
Some, from countries like Britain and Germany, sell their homes in anticipation of immigrating. A few have become so distraught that Andriuk has had to refer them to mental health workers.
According to Human Resources and Skills Development Canada, employers can only hire temporary foreign workers if "reasonable efforts" have been made to hire a Canadian, but have been unsuccessful.
CIC has five classifications of foreign worker: managerial, professional, skilled and technical, intermediate and clerical, and labourer.
In 2004 there were only 169 TFWs in the unskilled labourer category in Alberta. By 2008 that figure had exploded to 13,445, making it the largest single category.
Andriuk says that in 2008 and 2009, when the economy tanked and temporary foreign workers found themselves out of work, they were initially denied EI, even though they paid for it.
"People in the EI offices didn't even know the rules," she says. "A few groups had to tell them."
Other TFWs had to wait more than year for income tax refunds, which often came long after they were back home.
"And what about their (Canada Pension Plan) contributions?" she says. "Nobody's figured what's going to happen there."
McGowan says the current temporary foreign worker program should be scrapped.
"Some of the horror stories we've been hearing lately in the news shows that it's not working," he says. "If we need these people, we should be bringing them in as prospective citizens, not as disposable workers."
Edmonton Sun, Tues Jun 15 2010
Byline: Andrew Hanlon
Track injuries better, deal with problem employers: Alberta opposition: Province comes under fire following mistakes in auditor general’s report
Opposition parties are calling on the Alberta government to do a better job of tracking and dealing with employers that fail to meet health and safety standards.
Merwan Saher, the province's acting auditing general, said he overstated the number of unsafe workplaces in his spring report because of the failure of provincial safety officers to update their records.
The auditor general's report
Saher urged the Department of Employment and Immigration to use its powers to enforce compliance with the Occupational Health and Safety Act for employers and workers who persistently fail to comply.
On page 40 of the report, Saher concludes: "The department does not systematically identify and track persistent non-compliance and does not have a clear decision ladder for escalating compliance action from promotion and education to enforcement."
The report stated that 63 unnamed Alberta employers - who employ a total of 31,000 workers - neglected to comply with occupational health and safety orders after one year or more. It also found there were109 open occupational health and safety orders on these 63 firms.
"This happened despite numerous reinspections by the department," said the report. "Our analysis of all 109 open orders shows that this group of employers' average disabling injury rate is three to four times the provincial average."
Government records inaccurate
But the Department of Employment and Immigration has now concluded that its records are inaccurate. The department's review determined that significant numbers of those orders were open because of administrative error. The department further states the OHS officers have failed to update the orders following reinspections that evidence compliance.
The report revealed contraventions with OHS orders were in areas such as lack of hazard assessment systems, absence of personal protective equipment, inadequate certification and training, and inadequate systems to control chemical and biological hazards.
Opposition wants names of unsafe employers released
The statistics released in the report were criticized by opposition parties who also demanded the province release the names of the employers that failed to comply with OHS orders.
Alberta's Employment and Immigration Minister, Thomas Lukaszuk, said he would release a revised list of the names of the employers that might have unsafe workplace practices to the public once he determined no privacy laws would be broken.
However, NDP MLA Rachel Notley said Lukaszuk made an empty promise to improve workplace safety.
"He's done absolutely nothing to stop chronically unsafe employers from flouting the law," said Notley. "He is being outrageously negligent in his responsibility to protect the health and safety of Alberta workers."
In addition, the report found one-half of those employers continue to hold a valid Certificate of Recognition (COR) that helps them win contracts and qualifies them for reduced workers' compensation rates while statistics show their workers are much more likely to get hurt on the job than the provincial average.
Also, in some cases, the government suspended compliance orders even though the employers in question had done little or nothing to address the issues.
"Every day he allows these companies to operate with impunity is another day he's gambling with the lives of Alberta workers," said Notley.
The Alberta Federation of Labour (AFL) demanded the auditor general's recommendations be implemented by cracking down on employers who continuously break OHS laws.
"The problem is that this government can't bring itself to crack down on employers - even if those employers have repeatedly violated the law," said AFL president Gil McGowan. "Voluntary compliance can only take you so far. Sometimes, for the good of all Albertans, the government has to be willing to take out the big stick and punish employers who break the law (otherwise) more working Albertans are going to pay with their lives."
According to official government figures, last year there were 110 workplace-related deaths in Alberta.
Canadian Safety Reporter, Tues Jun 15 2010
Byline: Yaseen Hemeda
Gov't gains critical support for CPP hike: Alberta among minority of provinces opposed to higher premiums
Federal and provincial finance ministers have rallied around a mandatory, modest and gradual expansion of the Canada Pension Plan as the best route for fattening Canadians' retirement incomes.
Finance Minister Jim Flaherty said Monday a solid majority of the provincial ministers have endorsed the idea of increasing CPP contributions from employers and employees to boost the value of the benefits when they retire.
"We have a clear direction," Flaherty told a news conference following a meeting with his provincial and territorial counterparts in Prince Edward Island. "I think this is a significant step forward."
He acknowledged support for the direction was not unanimous, but indicated he is optimistic there would be enough provincial backing to make it happen. Changes to the CPP would require the support of two-thirds of the provinces and two-thirds of the population.
"We were not unanimous, but certainly the substantive majority view was that we should proceed," Flaherty said.
Senior officials were charged with working out the details and reporting their findings to a federal-provincial finance ministers' meeting in the late fall.
The next step will be to get an agreement on how much and how quickly to raise CPP contributions. The average CPP benefit is approximately $6,000 a year. The maximum is about $10,000.
Alberta Finance Minister Ted Morton has made no secret of his strong opposition to imposing what he calls a new "tax" on small business by upping the CPP contribution levels.
The Canadian Federation of Independent Business also has denounced the proposal as a job killer.
"It takes a solution that applies to all Canadian workers to solve a problem that only applies to a small cohort of workers," Morton said. "We're using a sledgehammer to kill a mosquito."
But others disagree. The Alberta Federation of Labour took out an ad in a P.E.I. newspaper urging Morton's counterparts to ignore his position.
"Don't allow Alberta's finance minister to derail pension reform for all Canadians," AFL President Gil McGowan said in the letter. "Please support reform that focuses on expansion of Canada s most efficient, economical and portable pension vehicle -- the CPP."
The AFL argues that fewer Albertans are covered by private pension plans than the national average.
Ken Georgetti, president of the Canadian Labour Congress, cheered the decision to embrace the CPP as the best vehicle to bolster retirement savings.
Noting that as many as six in 10 workers don't have workplace pensions, Georgetti said, the federal and provincial governments have no choice but to act "unless they want the next generation to pay for our mistakes."
Nova Scotia Finance Minister Graham Steele held back his support, saying he wanted to check with his cabinet colleagues.
Still, the political momentum has clearly shifted in favour of enriching the CPP, a plan that covers almost all Canadian workers. Quebec, which administers the parallel Quebec Pension Plan, signalled it would not put up any roadblocks.
Flaherty told reporters the ministers had decided to "take off the table" the idea of a voluntary, government-sponsored plan to complement the CPP, a proposal that had enjoyed significant provincial support as recently as last December. The federal Liberals also advocate a voluntary supplemental plan.
The decision to pursue an enhanced CPP -- a proposal consistently advocated by labour unions and the federal NDP -- was first floated last week by Flaherty and Ontario Finance Minister Dwight Duncan.
The CLC is among those pushing for a gradual doubling of contributions to ensure a doubling of the benefits upon retirement.
Although Flaherty and many provincial officials have already dismissed that formula as too costly for Canadians and their employers, Georgetti said he will use the coming months to persuade them they are wrong.
Debate over the adequacy of Canadians' retirement income has picked up in the last year after the economic recession exposed fault lines in the country's pension system.Edmonton Journal, Tues Jun 15 2010
Byline: Norma Greenaway
Alberta labour group questions CPP plans
One Alberta labour group says it doesn't believe the provincial finance minister when it comes to CPP.
In a letter published in a Charlottetown newspaper Sunday, Gil McGowan with the Alberta Federation of Labour says Ted Morton does not speak for most Albertans, who want pension reform.
He says only 33 per cent of Albertans are covered by a pension plan, less than the national rate of 38 per cent.
660News, Mon Jun 14 2010