January 15, 2019

Rank and File: A year of Ontario’s Bill 148: Not what the big business lobby predicted

By David Bush

A full year of big changes to labour law in Ontario has just passed. Newly released jobs numbers let us measure the impact of these changes, and gauge whether the nightmarish predictions of job losses and economic upheaval have come true.

Bill 148’s changes

Last January, Bill 148 ushered in a sweeping set of labour law reforms in the province. The legislation increased the minimum wage from $11.60 to $14 an hour, a 21% jump. This was the first phase of a two-phase increase to $15 an hour, which would have come into effect on January 1, 2019.

The legislation also gave every worker in the province access to ten job-protected Personal Emergency Leave (PEL) days, allowing an additional 1.6 million workers to use these days for emergencies such as sickness, family illness or bereavement. It mandated that the first two PEL days be paid while also barring employers from requiring a doctor’s’ note.

Ontario became the first Canadian province where all workers had access to paid sick days.

In April, Bill 148 implemented an equal-pay-for-equal-work provision, mandating that part-time, contract, casual, seasonal and temporary workers who do substantially the same work as their full-time coworkers be paid the same.

The legislation also brought in a number of rule changes that improved workers’ holiday pay and vacations, and made it easier to join and keep a union.

Big business predictions 

In the lead up to Bill 148 being passed, many in the big business community were warning that the changes it contained would lead to economic disaster and major job losses.

A study done in 2017 by the Canadian Centre for Economic Analysis (commissioned by the Ontario Chamber of Commerce) claimed that 185,000 jobs would be lost over two years. A 2017 TD Bank study predicted that Bill 148 would result in 80,000 to 90,000 jobs lost. Even Ontario’s Financial Accountability Office predicted 50,000 jobs would be lost due to Bill 148.

In January 2018, Ontario lost 54,000 jobs and it seemed that the critics of Bill 148 were right. The media quickly picked up on this narrative in January and again in August, when Statistics Canada’s monthly labour force survey showed that Ontario lost 80,000 jobs. But StatsCan’s monthly survey is merely a snapshot of the economy, which is apt to fluctuate dramatically from month to month. Looking at the change in jobs numbers from year to year is a much clearer way to measure the impacts of labour law reforms.

Bill 148’s impact

So after 12 months of Bill 148, what happened to Ontario’s job market?

The province added roughly 78,000 jobs in the last year, a 1.1% increase. This exceeded the national average of employment growth, which increased by only 0.9%. Overall, Ontario’s unemployment rate finished the year at 5.4%, below last year’s unemployment rate of 5.5% and also below the national unemployment rate of 5.6%. Ontario now has the second lowest unemployment rate in the country.

While it’s true that Ontario’s job growth in 2018 slowed when compared to 2017 (1.1% compared to 2.5%) this slowdown was a trend across the country. Job growth across Canada decelerated from a 2.3% increase in 2017 to a 0.9% increase in 2018. Job growth in 2018 looked more like job growth trends in 2015 and 2016, rather than the outlier year of 2017, meaning that there is no merit to the argument that reforms in Bill 148 caused job loss or even less job creation.

All of the jobs added in Ontario were due to an increase in full-time work, meaning the total amount of wages going to Ontario’s workers increased this year.

And what kind of jobs are they? The service sector saw an increase in employment by 1.4%, led by increases in transportation and warehousing, business, building and other services and educational services. This means that the jobs that are being created are not simply in the public sector or in sectors unaffected by labour law changes, as some may assume. Instead, job growth has occurred in many of the very sectors that were directly impacted by Bill 148.

It is noteworthy that employment in the food service and accommodation sector rose by 0.8%, while total hours worked in that sector rose by 1.7% over the last year. This means that wages and conditions for workers in fast food restaurants, hotels and retail – which are often among the lowest – improved in 2018. The big business lobby argued vociferously that this sector in particular would be hard hit by the new labour law changes and see big job losses.

The real story 

The Ontario Chamber of Commerce stated this fall that “Bill 148 was too much, too fast. The compounding labour reforms and unintended consequences came at too high a cost to Ontario’s economy.”

But the reality is over the last 12 months in Ontario, employment, wages, and the total hours of work increased, while unemployment decreased. The big business predictions about Bill 148 turned out to be nothing more than baseless scaremongering.

Sadly, the reforms in Bill 148 were largely rolled back by the new government’s Bill 47, which came into effect on January 1, 2019. The province gutted the much needed reforms in Bill 148, despite the evidence that increasing the minimum wage and introducing paid sick days, equal-pay-for-equal work and rules that made it easier to join and keep and union actually led to increased employment.

We can take heart that making these reforms not only improved the lives of workers, but they did not have the disastrous consequences for Ontario’s economy that some predicted. Now we have to continue fighting to improve working conditions for all Ontario workers.

Read the full Rank and File story.