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Canadian Small Business Pay and Benefits Report 2019

Latest survey reveals how changes to the minimum wage have affected Canadian earnings and benefits

The minimum wage is a divisive subject in any country or province. One only has to look south to see that argument being played out in full force: 50 states, more than 30 unique minimum wage requirements, with some states offering 25 cents higher than the federal standard of $7.25 and others planning to offer $15 per hour within the next couple years.

For many Canadians, a $15 minimum wage isn’t years out. It’s today’s current rate, thanks to Bill 148, otherwise known as the Fair Workplaces, Better Jobs Act, which passed on November 22, 2017. What many may not know is that on October 23, 2018, Ontario put those plans on hold within their own province, repealing several components of Bill 148 via Bill 47, known as the Making Ontario Open for Business Act, 2018.

The new law rolled back many of Bill 148’s provisions, including raising the minimum wage. Under Bill 47, there will be no increase to the minimum wage in Ontario until at least 2020.

Recently, TSheets by QuickBooks surveyed Canadians about the minimum wage, as well as other wage- and benefit-related issues. Among the fact that nearly 1 in 5 Ontario residents didn’t know Bill 148 was overturned, the survey revealed several other key findings.

A quarter of Canadians say money can’t buy happiness

Well, maybe not in so many words, but 26% of those surveyed said their most recent pay raise had zero impact on their quality of life. Despite the fact that 18% of respondents said they make the minimum wage and 12% said their most recent pay raise was a direct result of the minimum wage increase, nearly 60% of Canadians said they hadn’t seen much of a difference in their overall happiness. Just 34% said their quality of life improved.

“It depends on where you are, but I think Canadians are among those who have the most financial debt,” says Kim Li, a Toronto resident and marketing manager for TSheets by QuickBooks. “In the greater Toronto area, people live pay cheque to pay cheque to cover mortgage fees.”

Li is right. Our survey found 55% of Canadians said they live pay cheque to pay cheque, which was slightly higher than the 49% the Canadian Payroll Association reported in 2017. You’d think, then, that more Canadians would see a difference in their quality of life with a pay increase such as this, but not so.

“The more income you make, the higher your tax bracket,” Li says. So even though more people are now making more money, what they get to keep after taxes may not be much different. Plus, “if you’re receiving a lot of taxable benefits, those could also take you into a higher tax bracket,” Li says.

Wages aside, there is some good news for employers:

  • 57% of employees said they were satisfied with their job.
  • Nearly 20% claimed to be “very satisfied.”
  • Among those who said they were “dissatisfied,” over 50% said a higher base pay could convince them to stay at their current job.

While all this sounds pretty positive, it’s important hiring managers don’t get too comfortable. When asked how long they were likely to stay at their current job, nearly 40% of those surveyed said under two years, and just 13% of those surveyed said they expected to stick in their current job until retirement.

6 in 10 Canadians say wages haven’t kept up with the cost of living

If two-thirds of those affected by the recent increase to the minimum wage weren’t completely wowed, that doesn’t mean they’ve given up hope. Three-quarters of these said they were still satisfied or “very satisfied” with their current job, even though nearly 40% said they were also currently underpaid.

The big problem here seems to be less with the money people make and more with the cost of food, housing, utilities, etc. Despite the fact 75% of those surveyed said they currently make more than the minimum wage, 61% said their wages haven’t kept up with the cost of living. Considering The Economist ranked Vancouver as the 39th most expensive major city in the world in 2017, they’re likely not wrong.

Perhaps that’s why 66% of folks said they supported the minimum wage being raised to somewhere between $15 and $20 an hour, though others said they’d only support a minimum wage increase if it didn’t impact inflation.

“When we heard about the increases to the minimum wage, my husband and I literally looked at each other and said, ‘Everything’s going to become more expensive,’” says Li.

And Li isn’t wrong to think so. The country’s inflation rate peaked at 2.5% in June 2018, its highest jump in six years, according to a Statistics Canada report. And given that 64% of respondents in the TSheets survey said they hadn’t received a raise in two years or more, it’s possible a pay raise might help some of these individuals better balance what they’re paid and what they spend to survive.

Better benefits (and dental care) top the Canadian worker’s wish list

Taxable or not, Canadian workers love their benefits, particularly when it comes to dental care. If you’re a hiring professional looking to make your company sound even more appealing to new hires this year, take note: 75% of our survey respondents said dental care was the most important benefit a company could offer.

“Dental care is [one benefit] everyone uses,” says Li, when asked why the benefit is so coveted. The next step up? Orthodontics. “Some public companies or government organizations offer their employees great orthodontic packages,” says Li. “A lot of kids get their braces through a parent’s insurance.”

Tooth-care aside, the majority of Canadians from our survey said they wouldn’t sacrifice their benefits for higher wages, and an impressive 63% said they wouldn’t accept a position without benefits.

Taking a closer look into these numbers, we found men were more likely than women to sacrifice benefits for pay (though interestingly, more women than men would accept a job, even if it came without benefits).

Age also impacted people’s reactions. Predictably, people over age 34 were more likely to want benefits over a pay raise, while those under age 34 were open to living with fewer benefits if it meant a pay bump. Of course, “benefits” isn’t just another word for dental and vision. Survey respondents were also asked about incentives like flexible work schedules, parental leave and retirement savings.

Which of the following benefits/incentives are important to you?

(Respondents could select more than one answer)

Canadians value (some) benefits more than Americans

Recently, QuickBooks Payroll ran a similar survey in the U.S. Comparing the two surveys reveals some unique discrepancies. For instance, according to these results, American workers would rather receive a pay bump than better benefits.

Would you sacrifice benefits to get a higher base pay?

These benefits discrepancies are interesting, given the U.S. does not offer universal healthcare, so the best way for employees to receive affordable coverage is through their employer. Similar to Canadian respondents, a lower percentage of American women over age 34 would sacrifice benefits to get a higher base pay, compared to American men in the same age group.

Also underneath the benefits umbrella, Canadians and Americans responded differently to a variety of options. Remember that 75% of Canadians who rated dental as an important benefit? The same was true for just 48% of Americans. Vision coverage was also significantly different, valued highly by 60% of Canadians but only 38% of Americans.

Some of that could have to do with simple cost. According to the American Dental Association’s most recent survey (from 2013), the average cost for a “comprehensive oral evaluation” in the U.S. is about US$72.92 (CA$97.02) without insurance. In Alberta, according to their 2019 Dental Fee Guide, a similar service cost slightly more, at around CA$101.48.

On the flip side, Americans were more likely to value benefits tied to free time. They rated flexible work schedules and the chance to work from home more highly than their Canadian counterparts.

In respect to retirement savings and parental leave, however, folks on both sides of the border answered similarly. Almost a third of both countries’ respondents rated parental or family leave as an important benefit or incentive, while around 50% of both groups prioritized retirement savings (Canadians slightly more than Americans).

There’s no simple solution to this complicated topic

The minimum wage is a divisive subject in any country and province, and unfortunately, there’s no simple answer for what’s right for everyone. We asked Canadian workers if they supported raising the minimum wage, and the responses were mixed.

“It should be raised slowly so that companies can keep up,” said one survey respondent. “I just got my raise, and if the minimum wage suddenly shoots up to $15, everything shoots up with it. And I’m not sure I’d get a matching raise right away, putting me close to where I was before.”

“Yes and no,” said another. “Raising the minimum wage would lead to general living [expenses] rising and job loss. On the other hand, making the minimum wage … you cannot live. Making $6 over the minimum wage, I can barely afford to live.”

“I only support raising the minimum wage if that means people working at the minimum wage can afford to live, and the prices of everything else won’t also go up,” said a third respondent.

In general, with such a controversial subject, it seems there’s just one point everyone can agree on: If the minimum wage goes up, the prices of everything else can’t also continue to climb. It’s evident that change is needed, but higher wages can’t be the only solution.

*Methodology: TSheets by QuickBooks commissioned PollFish in January 2019 to survey 600 people employed for wages throughout Canada. Pollfish provided a statistically significant sample of respondents. TSheets designed and paid for the survey and welcomes the re-use of this data under the terms of the Creative Commons Attribution License 4.0, which permits unrestricted use, distribution and reproduction in any medium, provided the original source is cited with attribution to “TSheets.”