The Niagara Workers Activist Group held a protest in front of 301 St. Paul Street to protest the Ford government's roll-back of the minimum wage and Bill 148 on Monday October 15, 2018. Julie Jocsak / St. Catharines Standard

TORONTO—A new report from Ontario’s budget watchdog says the Ford government would have left more people better off if it had stuck to the previous government’s plan to increase the minimum wage to $15 this year.

The report, released by Financial Accountability Officer Peter Weltman on Tuesday, says that the government’s decision to freeze the minimum wage at $14 and introduce a tax credit for low-income earners on average leaves less money in people’s pockets and less money in the provincial treasury.

The difference for the average person’s bank account is $400, according to the report.

“The report shows that the minimum wage increase would have benefited more people with more money,” Weltman told iPolitics in an interview.

The Low-income Individuals and Families Tax (LIFT) Credit took effect on Jan. 1. Weltman’s report says the credit will benefit one third of minimum wage earners — or 503,000 people. But the tax credit also benefits people who don’t earn minimum wage but who’s income falls under $38,500, so the total number of people benefitting from the LIFT credit is 1 million, according to Weltman.

On average, those people will get a benefit of $409 in 2019, and only an estimated 19,000 Ontarians will get the full credit of $850.

Meanwhile, if the minimum wage hike had gone ahead, Weltman said it would have benefited 1.3 million people with an average after-tax benefit of $810.

“Generally speaking, anybody who’s earning minimum wage would have been better off had they had the increase from $14 to $15,” Weltman said.

The LIFT credit was part of Premier Doug Ford’s campaign platform in last spring’s election. At the time, the Liberals and NDP warned that the tax credit would leave minimum wage earners worse off.

Implementing the LIFT credit, combined with the loss of higher tax revenues from higher wages, will mean a $1.9 billion hit to the treasury over the next five years, according to the budget watchdog’s report.

In an emailed statement, Finance Minister Vic Fedeli said his government took a “balanced approach,” unlike the previous Liberal government, which he said changed “too much, too soon.”

The Liberals came under heavy criticism from the business community for their plan to increase the minimum wage from $11.40 to $15 within two years. A report from Weltman’s predecessor, released in 2017, predicted 50,000 jobs would be lost by the wage hike.

Conversely, the new report shows the tax credit isn’t expected to lead to any job losses.

In a scrum with reporters later on Tuesday, Fedeli was asked for his response to Weltman’s finding that on average people are getting $400 less than they would have if there was a minimum wage hike.

Fedeli replied: “well they have a job.”

He argued that the 132,000 jobs created since his party took office in June is a result of their commitment to freeze the minimum wage and suggested with a minimum wage hike to $15, more of those workers would have been laid off.

“The business community is going to continue hiring, we’ve given them a pause here and they’ve appreciated that pause, and they’ve shown their appreciation by hiring 130,00 people since the first of July,” Fedeli said.

Green Party Leader Mike Schreiner said that doesn’t hold up because Ontario’s unemployment rate was near historic lows for much of last year.

“It’s completely outrageous that the government would actually decrease the amount of money minimum wage workers are going to earn and increase costs to government at the same time,” Schreiner said.

His party proposes raising the minimum wage and lowering payroll taxes to give businesses relief while hiking wages.

The NDP said it thinks the government should have continued with the wage increases planned by the Liberals but Leader Andrea Horwath didn’t have a number for how much it should be.

Follow @MariekeWalsh