Changes to the way labour is regulated and paid for in Ontario will have detrimental effects on farm profitability, say farm organizations.
Premier Kathleen Wynne and Labour Minister Kevin Flynn announced the changes this week, outlining the proposed legislation after a review of the acts that govern labour in Ontario was completed.
The largest impact on farms will be an increase in the minimum wage to $14 per hour on Jan. 1, 2018 and $15 per hour on Jan. 1, 2019.
“The horticulture guys will be hit hard,” said Ontario Federation of Agriculture president Keith Currie, referring to the large amount of seasonal and lower-paid labour needed to harvest fruits and vegetables.
Indeed, the Ontario Greenhouse Vegetable Growers said the increase of $3.60 per hour over the two years will mean “the imminent closure of many family-run greenhouse farms.”
The greenhouse sector has been hit hard by Ontario government policies which have led to soaring electricity costs, and the cap-and-trade policy which has also had an impact on greenhouse heating bills. The government created a new greenhouse program, with subsidies to pay for more energy-efficient solutions, but this third hit to greenhouses’ ability to operate profitably has the sector reeling.
Some farms who need fewer, but technically skilled workers pay more than $15 per hour in order to attract and maintain workers, but Currie said increasing minimum wage can have an inflationary effect on other worker salaries.
As well, farms are mostly price-takers, so can’t easily pass an increase in labour costs onto consumers.
Workers who receive an increase at fast food restaurants such as McDonald’s are a different case, he said, as the company can increase the price of a hamburger by a nickel to help cover the labour cost increase. Farmers can’t.
Jan VanderHout, chair of the board of the Ontario Fruit and Vegetable Growers Association (OFVGA), takes the restaurant analogy one step further.
Restaurants within a community or province compete with each other, so the rise in minimum wage puts them all on the same playing field.
For Ontario fruit and vegetable growers, “our real competition is coming from out of the province and this is a significant difference,” he said.
VanderHout, a greenhouse producer of English cucumbers, called the increased minimum wage “a devastating blow to horticulture in Ontario.”
Labour is the largest cost for most fruit and vegetable growers and a 30 per cent increase over two years is too quick a change, said VanderHout.
The OFA would prefer that the province invested in programs to improve the business environment for rural Ontario, said Currie.
Not all of the areas of concern for agriculture in the review ended up in the proposed legislation and the OFA is thankful for that, he said, although the province has yet to address agriculture exemptions specifically in the proposed changes.
For example, agriculture is treated differently under the Labour Relations Act with limits on unionization, while the review suggests agricultural and horticultural employees should be included in the Act and get the same rights as other employees, including the right to strike.
The farm exemption isn’t outlined in the new legislation, although Currie was on a technical briefing call after the announcement and it was stated that there would be exemptions for certain industries.
“The indication is we’re exempt, but we will have to keep lobbying this summer,” he said, adding that Agriculture Minister Jeff Leal has been strongly lobbying Flynn and Wynne to ensure agriculture maintains its exemptions.
Agriculture also receives an exemption under the Employment Standards Act and it’s expected that exemption will continue. The Act sets out guidelines for how workers are treated including hours of work.
When it comes time to harvest crops, workers are needed, sometimes for long hours, to get the crop in, said Currie, which is the main reason for the agricultural exemption from the Employment Standards Act.
Creating a better business environment for rural Ontario would drive more activity in the economy, more employment and better wages, he said.
“Workers need to be protected and have rights, but at same time so do the employers,” said Currie. “It’s frustrating the rules coming out under this are made by people don’t own businesses, and have never had to fire or hire or discipline someone for bad behaviour.”
Farmers are collateral damage to broader policy, VanderHout said.
“I don’t think they’re picking on us in particular. This is their big objective and we just happen to be caught in a bad spot.”
“Ontario’s economy is strong and growing, but not everyone is feeling it,” Flynn said in a release Thursday announcing the new legislation, dubbed the Fair Workplaces, Better Jobs Act.
“These initiatives will help build a province where security and opportunity are available for everyone.”
— John Greig is a field editor for Glacier FarmMedia based at Ailsa Craig, Ont. Follow him at @jgreig on Twitter.