The Ontario Liberal government’s plan to raise the minimum wage to $15 per hour by 2019 is drawing fire from the Ontario Fruit and Vegetable Growers’ Association (OFVGA).
In late May, the provincial government announced intentions to increase the minimum wage from the current $11.40 per hour rate. That’s a significant blow for an industry where labour accounts for 50 to 65 percent of the cost of production, says Ken Forth, chair of the OFVGA’s labour section. The association estimates that a 17.5 percent price increase would be required to offset the wage increase.
Forth says it will be very difficult for growers, who are price takers, to sell into wholesale and grocer markets and compete with imported fruit from countries such as Mexico where labour rates are $6 per day.
In this interview, Forth says OFVGA has made the government aware of the potential plight of growers in ongoing discussions, but those concerns haven’t gained any traction at Queen’s Park. Rising hydro rates and fuel charges are also making business difficult for growers.
Across Ontario agriculture, industry representatives have viewed the minimum wage hike as too much, too fast. OFVGA is asking the Liberals to stick to a 2014 promise where the government would responsibly increase the minimum wage by linking it to increases in the Consumer Price Index. Forth says that would provide some longer-term predictability for growers. In the absence of this framework, the association is asking the government to create a separate minimum wage for agriculture.
Without some support from government on the issue, Forth predicts many growers will exit the industry and those who continue will look to downsize and stop growing labour-intensive crops such as berries. He adds that the government says it supports local food, but this policy will close farms.