Farmers could feel the pinch of minimum wage hike
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Jan 31, 2014  |  Vote 0    0

Farmers could feel the pinch of minimum wage hike

Stoney Creek News

By Mike Pearson, News staff

Tender fruit and vegetable producers could be the ones getting squeezed by Ontario’s new $11-per hour minimum wage.

Industry spokesperson Ken Forth said farmers may eventually be forced out of business when faced with labour rates that are at least 25 per cent higher than competing jurisdictions.

“We are unable in these industries, to negotiate price," said Forth, a Lynden, Ont. broccoli farmer. “People might think that’s weird, but that’s the way it is.”

Forth is also labour section chairman of the Ontario Fruit and Vegetable Growers’ Association and president of Foreign Agricultural Resource Management Services, a non-profit organization that processes requests for foreign seasonal agricultural workers.

With only half a dozen major buyers, Forth said producers cannot simply ask for higher prices, because rates are determined by the global marketplace. At $11, Ontario’s minimum wage is $2 more than California, the highest American minimum wage. In Mexico, workers earn about $8 per day, said Forth. While he’s not advocating for anything similar in Ontario, Forth said Ontario’s minimum wage should have been tied directly to the Consumer Price Index, based on the current $10.25, instead of an immediate 75-cent jump.

Ontario’s Liberal government confirmed on Jan. 30 it will raise the minimum wage from $10.25 to $11 per hour, effective June 1.

“The $10.25 an hour was the tipping point in this business,” said Forth. “We were comparable with most places across Canada, but certainly weren’t comparable with the Americans at that point and we certainly weren’t comparable with the Mexicans.”

Forth said consumers are unlikely to see major increases in produce prices. But if local producers are forced out of business, he fears Ontario produce may be tougher to find on the store shelves. With labour rates accounting for 50 to 60 per cent of producers’ expenses, Forth said the 75-cent jump will be dramatic.

“If (buyers) want to buy a box of something, whatever that box can be bought in Toronto at the lowest price, that becomes the price,” said Forth. “That can be Mexican broccoli or California tomatoes or Michigan apples. You’re allowed to match it, or you’re gone.”

Forth said hand-picked items, such as lettuce, broccoli, apples and strawberries, will be heavily affected because they are the most labour intensive.

“I don’t know what $11 will do. I can’t say it’s going to be okay, because it is not going to be okay,” said Forth. People won’t quit today. But there may be a few crops that are pushed aside, that aren’t grown anymore that are way too labour intensive.”

In a news release, Ontario premier Kathleen Wynne said the government is increasing the minimum wage to reflect the rise in the Consumer Price Index since the last minimum wage increase in 2010. The government also plans to introduce legislation that would tie future minimum wage increases to the CPI.  Under the proposed legislation, increases would be announced by April 1 and come into effect on Oct. 1. The proposed legislation acts on the recommendations of Ontario’s Minimum Wage Advisory Panel, which included business, labour, youth and anti-poverty representatives.

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