TORONTO - NDP Leader Andrea Horwath tried to reach out to both workers and employers on Tuesday, saying her party is committed to raising the minimum wage in Ontario to $12 an hour over two years while simultaneously reducing the small business tax.

In trying to appeal to both sides, Horwath said New Democrats are "sensitive" to the effect a higher minimum wage would have on job creators.

"We want to see the minimum wage increase but in a way that's balanced and allows small businesses to absorb the impact," Horwath said outside a coffee shop where she spent part of the morning chatting with patrons.

The plan would involve a gradual increase over the next two years while also tying the raise to inflation to ensure a fair minimum wage in the future, she said.

The Liberal government has raised the minimum wage to $11 an hour as of June 1 but its proposed legislation for inflation indexing died with the election call.

Both Horwath and the Progressive Conservatives refused to support the Liberals' budget tabled last week, setting the stage for Ontario's June 12 vote.

Horwath said Tuesday the New Democrats would also reduce the small business tax rate to three per cent over two years to help them absorb the impact of higher wages.

"We see electricity rates climbing through the roof, businesses are having a difficult time paying their hydro," Horwath said.

"These are things New Democrats have a commitment to make a difference on for businesses."

The Canadian Federation of Independent Business called Horwath's two-pronged approach an "interesting proposal" but noted it involved very separate initiatives.

"You're comparing apples with oranges in the sense that one's a payroll cost and the other one's income tax," said senior policy analyst Nicole Troster.

"The minimum wage increase would basically put pressure on payrolls, and it's a cost that would have to be paid if a business is making profit or not."

A better idea, she said, would be for more provincial investment in skills training to allow people to move up from minimum-wage jobs.

Troster did say the federation would support a cut to the small business tax rate on its own.

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