Manitoba minimum wage subsidy penalizes businesses that pay their staff more, critics say

A Winnipeg business owner says newly announced changes to a provincial program that offers a subsidy to employers who pay their workers minimum wage still leaves much to be desired.

Alfonso Maury, owner of Corrientes Argentine Pizzeria, said he can't apply for the program because he pays his workers more than the current minimum of $13.50 an hour.

"It's not affordable for the people to work for less money, but from the other side, you will not get any help from the government if you don't pay minimum. So it's a strange situation," Maury said.

The province's small business minimum wage adjustment program was introduced last October to support small businesses and offset the impact of a hike from the previous minimum wage of $11.85, according to the program's website.

Eligible small businesses can apply for a subsidy of up to $520 per employee for a maximum of 20 workers, or $10,400. Private sector, non-profit and charitable businesses in Manitoba can apply.

But the program only provides the subsidy for staff whose pay went up as a result of last October's minimum wage increase.

When it was originally rolled out, businesses had to apply for biweekly payments, and employers couldn't get the subsidy for seasonal employees.

Under changes that came into effect Wednesday, the biweekly submission process has been replaced by a one-time lump sum payment, and small businesses that employ minimum wage seasonal employees are now eligible.

The changes were made to ensure timely support for businesses and streamline the application process, the province said in a news release.

But business owners like Maury still don't qualify. Given the labour shortage, he said he needs to offer better than minimum wage to encourage people to work in the industry. Even with higher pay, Maury said it's still hard to find employees.

"If I can pay more, I will because I want my team always with me," said Maury.

He also said he wants to make sure his employees have a liveable wage.

"Who are they [the government] helping? I don't understand — just maybe big companies … some big firms that pay minimum wage?"

Program needs adjustments: CFIB

Brianna Solberg, Manitoba's provincial director with the Canadian Federation of Independent Business, said she'd like to see the program offered to businesses that pay employees more than minimum wage.

"It discredits and it almost penalizes businesses for paying above minimum wage," Solberg said.

The majority of federation members — about 80 per cent — aren't eligible because they pay more than minimum wage, she said.

However, the program "serves as a safety net" for some business owners who have been hit the hardest by the pandemic, said Solberg.

She also said the program's newly introduced one-time payment will help lessen the administrative burden on businesses owners by reducing the number of applications they need to fill out.

She hopes to see the program expanded past March 31, when applications close, since minimum wage will be increasing to $14.15 in April and to $15 in October.

"The past few adjustments to this program really demonstrate how difficult it is to get this right," she said.

Program unlikely to be 'well utilized': association

Shaun Jeffrey, CEO of the Manitoba Restaurant and Foodservices Association, also said many small businesses won't be able to use the program because of the minimum-wage requirement.

"The common thought process is that we pay minimum wage [in the restaurant industry], and that's just not the case anymore, obviously, in order for us to retain and attract … higher-level employees," said Jeffrey.

"I just overall don't see that the program is going to be well utilized just for that simple fact of that qualification alone."

Jeffrey said he would like to see the province offer a subsidy similar to its bridge grant program, which provided a one-time grant to small businesses who had to close due to public health orders.

"It was really just a pretty basic program that was able to utilize available funds to the industry," he said.

As of mid-January, the province said it had only distributed $20,400 of the $6 million budgeted for the program to a total of 108 businesses.

Cliff Cullen, who was the economic development minister at that point, said the number of businesses eligible for the subsidy had expanded in response to provincial consultations.

"We want to make sure that the greatest number of Manitoba small businesses can apply and benefit from the program," he said in a January statement, adding the province was working on social media messaging and advertising to help encourage more applications.

He also noted his Progressive Conservative government is in the midst of a tax competitiveness review that he said could help small businesses by decreasing their tax burden.

Its findings are expected to be released this spring.