Nov 2, 2023

The Impact Of Minimum Wage Increases

Boards and service providers will need to manage expectations about service quality versus costs involved. 

Condominium service providers are always challenged to provide superior service while helping boards remain fiscally prudent. Part of that equation is a commitment to pay employees more and with great benefits so that companies can attract and retain great talent. The goal for most companies is to pay employees more than the minimum wage while remaining market competitive. It is a very difficult balancing act to keep both clients and employees happy.

On October 1, 2023, there was another Ontario government-imposed wage increase. This time it was a 6.8 per cent increase improving minimum wages from $15.50 to $16.55 per hour. This minimum wage increase is larger than most in recent history. Many are unaware that the effective rate of this increase is much higher because all such wage increases include impacts to wage fringe (WSIB, EI, CPP, EHT, etc.). The net effect of this wage increase is over 8 per cent.

There is a lot of ongoing online debate on minimum wages, good, bad, ugly, pros and cons. Most Condominium boards are sympathetic to employees, even demanding higher wages in contracts. Boards want to help employees and attract great talent, but not at the expense of their corporation. 

Boards often ask, “Why is it that Condominium Owners always have to foot the bill for such increases and when will it end?”

How long will it take for the Ontario government to fill this 19 per cent gap? That is a political question that the government will struggle with. One thing is for sure: the Ontario government has signaled its intention to raise the minimum wage again on October 1, 2024, and thereafter at least once a year. Each year there will be a cat-and-mouse game of service providers asking for more money and boards demanding companies to sharpen their pencils.

For board members and Condominium Managers come budget time, be prepared. This is the new norm. Boards and service providers need to come together and have open conversations to manage expectations on service quality versus the costs involved. Maintenance fee increases are never an easy pill to swallow, especially for those on fixed incomes, but it is a reality that everyone must prepare for.

October 1st is likely a new anniversary that workers will look forward to each year, but not so much for those who have to foot the bill.


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