7 December 2023
Minister Arlene Dunn
Chestnut Complex
P. O. Box 6000
Fredericton, NB E3B 5H1
Via email: Arlene.Dunn@gnb.ca
Dear Minister Dunn
Re: Bill 27 – An Act to Amend the Employment Standards Act
In December 2022, Bill 27, An Act to Amend the Employment Standards Act “ESA”, was introduced in the legislature by Mr. David Coon. The Bill seeks to amend the ESA to add 10 paid days and to implement a financial support program to aid employers temporarily in adapting to additional costs. After having been referred to the Standing Committee on Law Amendments, the Department of Post-Secondary Education, Training and Labour was tasked to consult on the matter and return the findings from said consultations. In response to this consultation process the Fredericton Chamber of Commerce wishes to reiterate the position that this is a cross-industry issue that would affect our entire memberships and indeed, businesses and organizations throughout the province. It can also be difficult to evaluate policy decisions such as paid sick leave while still recovering and adapting to the ramifications of the pandemic, but employers understand very well both the value and cost of paid sick leave. While we appreciate the good intentions behind the bill, it will have significant ramifications for the provincial economy that may not have been fully considered.
Workforce
As has been well established, employers are facing a very tight labour market now and for the foreseeable future – they are doing whatever they can to recruit and retain employees. Many businesses as well as not-for-profit and charitable organizations that do not currently offer paid sick leave would if they had the financial and human resource capacity.
Benefits such as sick leave are becoming an increasingly important employee attraction and retention tool and act as a differentiator to be an employer of choice. Similarly, employers are providing healthy and safer working environments since the pandemic and many offer work-from-home options for employees to avoid being sick or getting others sick.
In our opinion, paid sick leave should be left to the market to decide and not have this competitive advantage swept aside by the government. Additionally, because the Employment Standards Act prevails over collective bargaining agreements and sick leave is a negotiated piece of these agreements, essentially all (or most) collective agreements in the province would be caused to be renegotiated.
Cost
10 days of paid sick leave would be approximately equivalent to 4% of annual salary (the same as vacation pay). When also considering that these employees would have to be replaced for their missed shifts, that number essentially doubles to potentially increasing their payroll costs by 8% for individual employers. As has been well-documented, employers are facing a difficult cost environment for the foreseeable future. Inflationary pressure, a significant minimum wage increase in April 2023 outside of the normal statutory review process, CPI increases, EI expansion, increasing carbon taxes, property taxes, and more. To put this additional cost on employers now would threaten the economic growth that the province has seen recently.
We can also take a broader view and look at the total provincial impact of 10 paid sick days per year, using the total number of workers and average wages and hours worked data from Statistics Canada[1]:
Hourly Paid Employees
Number of hourly paid employees: 209,618
Average hourly earnings: $27.83
Average weekly hours worked: 32.0
- These figures total approximately $37 million per day. Given an average of 260 days worked per year, the cost is $9.7 billion.
Salaried Employees
Number of salaried employees: 119,495
Average hourly earnings: $41.18
Average weekly hours worked: 36.7
- These figures total approximately $36 million per day. Given an average of 260 days worked per year, the cost is $9.3 billion.
Of course, this estimate of $19 billion would not entirely be new costs as many employers already offer paid sick leave to varying degrees and assumes all 10 days being used by each employee – but it does give a sense of the potential cost burden of paid sick leave in New Brunswick.
It may be instructive to consider that only three other provinces have legislated paid sick leave – British Columbia with five, Quebec with two and Prince Edward Island recently increased from one to three days. As the most recent change, it is interesting to look at the P.E.I. example, “workers will qualify for one paid sick day after 12 months working in a job, two days the next year and three days after three years of service”[2]. It should be noted that the tiered reward system seemingly arrived at, is at least more in line with the spirit of competitive compensation. At a minimum, New Brunswick must maintain competitiveness vis-a-vis other provinces, not only for current employers but also for the government’s own investment attraction purposes.
As this letter marks the final days of the consultation period, concluding on December 11th, it is important to emphasize the importance of consulting with the business community given the potential impact on employers throughout New Brunswick who have enthusiastically sought to provide their perspective and context to such considerations. Important questions have been raised during this process concerning issues such as the inability to carry-over days, how they might be accumulated (based on hours worked vs. employment), if part-time employees would be included, how the number of employers each year would impact an employee’s accumulated sick time, etc. The private sector is responsible for economic growth, creating jobs and increasing the wealth / prosperity in the province that ultimately funds government to provide the services that citizens need. Governments, on the other hand, are responsible for creating conditions that will either facilitate or hamper this growth and ten paid sick days would fall into the latter category. We ask that the government not pass Bill 27.
On behalf of the business community, the Fredericton Chamber of Commerce thank you for the opportunity to respond on this issue.
Morgan Peters
Chief Executive Officer
cc: Hon. Blaine Higgs, Premier, Province of New Brunswick
cc: Hon. Ernie Steeves, Minister of Finance, Province of New Brunswick
cc: Hon. Ted Flemming, Chair, NB Legislative Amendment Committee
cc: David Coon, Leader, Green Party of New Brunswick
cc: Susan Holt, Leader, Liberal Party of New Brunswick
[1] Statistics Canada. Table 14-10-0222-01 Employment, average hourly and weekly earnings (including overtime), and average weekly hours for the industrial aggregate excluding unclassified businesses, monthly, seasonally adjusted
DOI: https://doi.org/10.25318/1410022201-eng
[2] “P.E.I. MLAs vote for bill to guarantee paid sick days – but not as many as opposition wanted,” CBC News, Carolyn Ryan, (Nov 28, 2023), accessed December 5, 2023, https://www.cbc.ca/news/canada/prince-edward-island/pei-legislature-nov-28-1.7042606#:~:text=Government%20amendments%20mean%20Islanders%20will,after%20three%20years%20of%20service
