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Local business groups have voiced support for the Pallister government’s plan to tie future minimum-wage increases to the rate of inflation.

The Manitoba Federation of Labour (MFL) and provincial NDP labour critic Tom Lindsey on Monday panned the government’s proposed minimum-wage legislation.

However, spokesmen for the Manitoba Chamber of Commerce (Manitoba C of C), the Manitoba Hotel Association (MTA) and the Retail Council of Canada (RCC) said Tuesday they like that it is likely to depoliticize the decision-making process and provides more predictability for employers and employees.

"What businesses are always looking for is some sort of level of certainty when it comes to the minimum wage," said Manitoba C of C president and CEO Chuck Davidson.

"In the past it (the minimum-wage increase) was always some kind of number that was picked out of the air. We never knew what to expect on an annual basis. This gives businesses a better certainty going forward in terms of what their fiscal situation is going to be."

MHA president and CEO Scott Jocelyn said the province’s hotel operators were increasingly frustrated with the former NDP government’s tendency to boost the minimum wage without any regard for how the industry was faring.

"It was becoming tougher and tougher to swallow," he said.

"So I think the fact it would be tied to inflation... is definitely a step in the right direction."

Karl Littler, the RCC’s vice-president of public affairs, said the council has long been advocating for minimum-wage increases to be tied to the annual increase in the consumer price index (CPI). He said that’s the formula used by a number of other provinces, including British Columbia, Ontario and Nova Scotia.

"It is also exactly the measure used for (determining increases in) the Canada Pension Plan and a lot of benefits payments," he said.

Todd MacKay, the Canadian Taxpayers Association’s director for the Prairie region, said he has mixed feelings about the legislation.

On the one hand, it makes it easier for employers and employees to plan their budgets and eliminates the temptation for governments to raise the minimum wage in an election year, he said.

But he’s also concerned that higher labour costs can increase the cost of groceries, which can create added hardship for low income earners.

MFL president Kevin Rebeck said Monday the fact the minimum wage would increase by only 15 cents an hour this October under this type of formula will only guarantee that minimum wage earners continue to live in poverty.

He said the MFL wants to see the minimum wage gradually climb to $15.53 an hour, which is the most commonly accepted poverty measure for a full-time worker with one dependent.

Davidson said in perfect world, it would be nice if everyone could be paid at least $15 an hour.

"But what kind of impact is that going to have on small businesses in Manitoba, who are the ones who would have to pay for it," he said, adding a better way of putting more money in the pocket of low-income earners would be for the provincial government to raise the basic personal income tax exemption.

In Saskatchewan, he noted, residents aren’t taxed on their first $16,000 of earnings, while in Manitoba the exemption is only $9,500.

The Canadian Federation of Business also argued Monday that lower tax rates and improved job training programs would do more to improve the standard of living for low-income earners than what the government is proposing.

murray.mcneill@freepress.mb.ca