Nova Scotia Business Journal - Tourism Connection - April Edition

DarleneNSBJ This past month, there were three significant tourism businesses in Nova Scotia that went into some form of receivership. By the time this article is published, some solutions may be underway to salvage these businesses for the peak 2013 tourism season, however they represent the struggle and challenge faced by many others hoping that our economic fortunes will turn around.

At a time when small businesses are facing declining profits and increasing costs, they can look forward to another increase in minimum wage this April. This will put Nova Scotia at the 2nd highest minimum wage rate in the Country. It is hard for anyone to disagree with a wage increase for the lowest wage earners and most people in the public look at this and say, who cannot afford to increase the hourly rate by .15 cents? Most of us are far enough removed from earning minimum wage that we dismiss this as no big deal. However, what is being missed is the real financial impact on businesses that rely on entry level workers and how this impacts all wages, across the operation. One medium-sized accommodation operator told me this latest increase will mean over $60,000.00 more a year in wage costs. The argument that this is a measure to combat poverty is simply window dressing. The real structural issues that cause poverty need attention in a meaningful way.

In fact, placing additional burden on business at a time when they are struggling will simply make them adjust by reducing hours or delaying a new hire in an effort to maintain labour costs. With labour being the single largest expense for a tourism business, hard choices are being made around the level and type of services they can continue to offer. Since 2008, Nova Scotia businesses have seen a 30% plus increase in their regulated wage costs, this on top of over 30% increase in electricity rates during the same period. Could not our governments be more innovative in efforts to create a competitive and sustainable business environment?

Could they help offset regulated increases by reducing payroll taxes? Or provide payroll incentives to help seasonal businesses stay open longer, increase wages or add employees? Can we reduce the HST or personal income tax now enabling people to keep more of the money they earn? We are quick to offer incentives for possible new businesses in the province, but seem to be paying little attention to the viability of existing businesses. It really is time to do things differently!