Increases to Ontario’s minimum wage should be pegged to the inflation rate, the Ontario Chamber of Commerce says.

In a report released Wednesday, the chamber is recommending an automatic review of the minimum wage every two years with an adjustment July 1 based on the Consumer Price Index (CPI).

Ontario’s minimum wage is $10.30 an hour and hasn’t been raised for three years. An advisory panel established by the provincial government will recommend if changes should be made.

Gerry Macartney, general manager of the London Chamber of Commerce, said the current way the minimum wage is set is too political, arbitrary and unpredictable for both employers and employees.

“Our (chamber) members need certainty . . . We go from year to year at the whim of government, and they will announce a new number and we don’t know where it comes from.”

The governments of Alberta, Nova Scotia and the Yukon tie minimum wage increases to inflation.

Josh Hjartarson, the Ontario chamber’s vice-president of policy, said the government should resist pressure for a sharp hike to minimum wage to make up for the three-year freeze.

“We’re still in a critical phase of our economic recovery. We’re not out of the woods and it’s not the right time for substantially jacking up the cost of labour for employers.”

As an alternative to an automatic link to the CPI, the chamber said the minimum wage should be set by an outside body of experts made up of employers, employees and a neutral chairperson.

The chamber report argues Ontario’s minimum wage is already above the national average and a large increase would discourage job creation at a time when youth employment is high.

Hjartarson said the retail and hospitality sectors that often employ young people at minimum wage are struggling to maintain employment.

“At a time when we have staggering youth unemployment, an arbitrary large raise in the minimum wage would be counterproductive.”

Labour Minister Yasir Naqvi said the Liberal government has increased the minimum wage by 50%. The government is waiting for the advisory panel’s report that should be released by the end of the year, he said.

“By establishing the panel, we’re taking steps to ensure setting the minimum wage is out of politicians’ hands.”

Lambton-Kent-Middlesex MPP Monte McNaughton, the PC critic for economic development, said there isn’t any need to raise the minimum wage and the government should focus on bringing quality manufacturing jobs back to the region.

hank.daniszewski@sunmedia.ca

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