Valley First

Minimum wage could squeeze B.C. small business

PENTICTON, B.C. — Canadians continue to find themselves in the thick of a continent-wide minimum wage debate. While municipalities south of the border—like Los Angeles and New York—consider wage hikes, lobbying is in full force in British Columbians’ back yard.

The BC Federation of Labour is pushing a $15 minimum wage for the province. Their “Fight For $15” campaign petition is closing in on 36,000 names. In Vancouver, mayor Gregor Robertson hopes to set a precedent for a “living wage” by starting at city hall. Meanwhile, Seattle has begun phasing in a $15 minimum wage, leaving B.C. businesses wondering if the province will follow. Small businesses in particular, which make up 98 per cent of business in B.C., are wrestling with what a minimum wage hike means for them, especially one that lands in the $15 range. 

Kelowna business owner Siobhan Jennings-Bates of the downtown pub Muninn’s Post says she doesn’t think a rise in minimum wage should be a big deal for business owners.

“As someone who has worked for minimum wage a lot, I can tell you that it’s not enough to keep up with the cost of living,” she says. “Employers should just pay their employees fairly—after all they make money for you.” She says that all employees of her pub are paid well above minimum wage, so she isn’t concerned about a possible increase.

Back in 2001, B.C. had one of the highest minimum wages in Canada at $8 per hour. But since then, other provinces have made increases, leaving B.C. at the lower end of the rankings, higher only than Alberta, Northwest Territories and Saskatchewan. And Alberta’s NDP government has plans to increase minimum wage in the province to $15 an hour by 2018.

There’s no question some business owners will see it Jennings-Bate’s way: wages set too low contribute to higher levels of poverty. But others will see a high minimum wage as a burden, hacking more off the bottom line, given that wages are one of the biggest expenses for a small business.

While the verdict remains out on minimum wage, business owners can do a few things to prepare for a possible wage increase.

“Cash flow is king,” says Corey Wicks, a business banking advisor at First West Credit Union’s Valley First division. “I recommend that business owners examine their cash flow. Look at past wage payments and model what an increase would look like to their cash flow. Evaluating staffing levels is another thing to consider.”

Wicks reminds business owners that regular audits, pre-planning and anticipating financial events are key ingredients to navigating things like a potential wage increase.

“If a wage increase happens, there’s no question it will affect business’ cash flow,” he says. “The degree of impact will depend on what adjustments have been planned ahead of time.”

About Valley First

Valley First is a premier provider of banking, investment and insurance services for residents and businesses in the Okanagan, Similkameen and Thompson valleys. As a division of First West Credit Union, B.C.'s third-largest credit union with 54 branches and 38 insurance offices throughout the province, Valley First brings innovative products, an extensive branch network and local decision making to the banking experience. For more information on Valley First, visit www.valleyfirst.com.

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