Magna takes aim at Ontario over the cost of doing business
Magna International is warning Ontario has reached a “tipping point” that will determine the future of business investment in province as Kathleen Wynne’s government aims to push the minimum wage to $15 per hour and give employees more rights in the workplace.
"We find ourselves in the very untenable position of questioning whether we will be able to continue to operate at historic levels in this province," warned Magna Chief Human Resources Officer Marc Neeb in a submission to a committee studying the legislation.
Phillip Cross, senior fellow at Macdonald-Laurier Institute, said Magna's mention of a possible move out of the province was unusual.
“I think it’s actually quite unusual [for] a large multinational firm like Magna, which has to deal with governments all the time," he told BNN in an interview Friday.
“They generally are very politically correct – they are very understated," he added. "It’s quite unusual for a large firm like that to even raise the possibility that they would move. And it should get the Ontario government’s attention. ”
The Ontario government announced in May that it would raise the minimum wage in the province to $15 an hour by 2019.
The province also proposed a number of other labour changes, including plans to ensure part-time workers will get equal pay for doing work equal to full-time staff, allowing employees to refuse shift work with less than four days’ notice, increased personal emergency leave, and increasing paid vacation to three weeks from two after five years with a company.
Magna says these proposed reforms only add to other burdens including high hydro rates and the province’s cap-and-trade program.
“We believe the tipping point for Magna may well be the Fair Workplaces, Better Jobs Act, 2017,” Neeb wrote. “Ontario’s overall cost model must remain comparable to the market that we compete with for business.”
“This is especially important when our main competitor to the south is working harder than ever to reduce costs, regulatory burdens and promote business efficiency and productivity. From our perspective, the province of Ontario seems to be moving in the opposite direction.”
Magna points out in its submission to Ontario’s Standing Committee on Finance that it’s a “proud” Canadian company with 22,000 employees in the province, where it invests approximately US$320 million each year.
“[The proposed labour rules] will make our operations less competitive in the global marketplace, and by extension, make Ontario a less desirable location for future business investment and job growth.”
What do you think is the biggest threat to business investment in Ontario?