Article content

Ontario’s plan to increase the province’s minimum wage to $15 an hour by 2019 will be mostly ineffective at reducing poverty, and could ultimately cause a net loss of 50,000 jobs, an independent analysis of the policy has found.

The Financial Accountability Office of Ontario on Tuesday released a commentary covering the province’s proposal to increase the minimum wage, finding the added labour costs for businesses will increase workers’ incomes, but that those extra payroll costs will force firms to axe some lower-income positions.

We apologize, but this video has failed to load.

tap here to see other videos from our team. Try refreshing your browser, or Ontario’s $15 minimum wage could cost the province 50,000 jobs, watchdog warns Back to video

The watchdog estimated that the wage hike will reduce total employment in the province by about 0.7 per cent, or a net total of 50,000 jobs, as businesses try to shrink their costs through automation or price increases that could lead to reduced sales and cause layoffs.

“However, there is evidence to suggest that the job losses could be larger than the FAO’s estimate,” the FAO said. “Ontario’s proposed minimum wage increase is both larger and more rapid than past experience, providing businesses with a greater incentive to reduce costs more aggressively.”