You read stuff and sometimes a song just pops in your head.
Like a news story Friday afternoon about a new pot of government cash going out through the St. John’s Bored of Trade for some bizarro unexplained reason. Townie Board of Trade. The only “business advocacy” group in the free world to ever vote against free enterprise just because some of their members were politically connected and could make a few bucks off the massive, idiotic fiasco called Muskrat Falls.
You read the stories and all you can hear is some aging rocker who in his prime got notorious for biting the head off a bat during one of shows.
Crazy, but that's how it goes.
We’re goin’ off the rails on a crazy train.
Get rid of the Ode, you crowd of mainlanders and assorted Colonialists at the university and replace it with this, the real anthem of Newfundlund - as too many people now say it - and Labrador.
As of Friday, the provincial government is taking money it doesn’t have and giving it to the Bored of Trade to hand out to a suspiciously small handful of businesses in the province to help pay the wages for some of their employees that went up 18% in the past two years thanks to government’s decision to hike the minimum wage to $15 bucks based on a fraudulent campaign by unions.
If you are not laughing at this point, you should be crying.
That’s because the whole thing is nuts. Well, more than nuts. It smells like a body out behind the health science centre in one of the coolers with a wonky fan on it.
Start with the announcement itself. Coming from the townie Board of Trade and - as of Sunday morning - there’s still no news release from the government itself. Nor was there the bog standard notice to news media from the provincial government that Bernie Davis would be making a big funding agreement.
So that’s two bits of oddness right off the bat.
Then there’s the *two* groups involved, the Board of Trade and the Employers Council. Last month, the two announced that the Employers Council was going out of business. Rolling itself into the townie Board in exchange for hiring all the Council’s staff and giving its board members automatic places on the townie Board’s board of directors. They’d also change their name of the townie Board to Newfoundland and Labrador Board of Trade even though the townie Board represents businesses in Sin Jawns. Because we advocate for everyone the Board claimed.
Small- and medium-sized businesses across the province usually join their local chamber of commerce to promote their local intetests. The townie Board is run by townies for townies and gives precisely zero tosses for anything outside Town, except by accident or coincidence. All chambers of commerce have some interest in issues that overlap with other chambers but what the townies are planning to do makes no more sense than say the Labrador West or Labrador North Chamber of Commerce calling itself the Labrador and Newfoundland Chamber just because it advocates for some things that affect everyone in the province, as it turns out.
The truth is the townie Board dies even advocate for its own movers any more. Five years ago, the townie Board swapped out its chief executive, fired its policy people, and ditched all of the member committees they had that dealt with taxation, business issues and government. Two years ago, the townie Board launched its only “advocacy” event, which consists of the CEO tossing softball questions to the celebrity Premier in what they bill as a “State of the Province” event. So even that claim about advocating for every business, the reality is they advocate for no one.
The state of the province show is really a chance for the Board to pocket a few bucks by luring in the gullible to hobnob with the local celebrity Premier. The Board sucks up to the givernment by giving the celebrity free publicity. They get nothing in return.
For its part, the Council stopped doing advocacy when its former executive director left for a better job. They too went quiet until last month when they announced they were quitting. Shortly after, the Council’s chair did some budget commentary that ignored the massive deficit and other problems while praising a cut to small business tax that will deliver an average of a little over two bucks a day in tax savings starting this year. The minimum wage hikes over the past two years have cost businesses more than that *an hour* per employee already. But that's the noisiest they've been in two years and it was more like applause that serious advocacy on behalf of members.
Anyway, the merged townie Board now has some provincial cash to make it look like they are doing something for the whole business community. Interesting timing, given that the merger only happened last month. Plus, while nothing has spilled into plain sight for the rest of us to see, it wouldn’t be a shock to find out there have been plenty of the feck-off-strong-letter-to-follow kind of “communications” to the townies from say Mount Pearl or Corner Brook or Labrador or Arsehole Cove in response to the joyful news the townies are now looking out for them.
One would expect such a thing in this province, just knowing how people beyond the overpass look at the townies - with good reason - and how the townies look at the baymen. Add in Labrador for extra flavour. After all, it was at the Bored of Trade’s celebrity event with Barak Obama a few years ago that Zita Cobb took a break from lobbing softballs at the former American president to tell him that “we are an island people in Newfoundland and Labrador.” None of that would include the townie Board’s own small business members who woke up one morning to find out that an association of big businesses is now guaranteed seats on the BOT’s board of directors equal in number to the old members.
So maybe this Friday announcement was more about making the townie Board look less townie and bored than doing useful things for business.
But there are more signs this newser was not on the level.
Bernie Davis.
Minister of Labour.
The guy who hiked minimum wage a lot last year.
But that’s not the really funky thing here.
“Extra cash for small businesses will take pain out of minimum wage hike, employers hope” read the headline on the CBC story that dropped on Friday. Holy moley, another red flag that something is amiss here. Friday is, as every West Wing fan knows, take-out-the-trash day for all those announcements you want people to ignore.
Look at the last sentence of the Ceeb’s story:
Labour Minister Bernard Davis said the province is committing $2 million for the program through the Canada-Newfoundland and Labrador Labour Market Development Agreement.
The LMDA doesn’t belong to Bernie.
It’s from Gerry Byrne’s skills department.
Where was Gerry?
Gerry Byrne is an old-school politician, which means he never misses a chance to get his mug in the news handing out cash. So not having Gerry there is odd. Suspiciously odd.
Then there’s the source of the cash. Officially it’s coming from the LMDA but labour market agreements are not for businesses. They are for workers, specifically people on employment insurance and others who have difficulty finding and keeping regular work. It covers things like training or wage subsidies for people with developmental issues.
The money from Ottawa pays to get people off employment insurance and into stable and hopefully better paying jobs. This cash normally goes to training programs *for workers* not businesses of any kind even if the businesses are “you know, just coming out of COVID. We've been immersed [sic] in inflation, interest rates are creeping. The labour market has been unstable” and that kind of thing.
So if the money really *is* coming from that federal pot, the province will have to backfill it with some of the borrowing because the LMDA is clearly not intended to cover Friday’s announcement. You can see this laid out in the 2023-24 activity plan for the Canada-Newfoundland and Labrador Labour Market Development. There’s money for retraining, money to help people with special needs, people who are hard to employ and so on. It’s all about workers. None of the Friday cash Bernie handed over fits.
They might try to claim it is under the Labour Market Partnerships portion. That’s the part of the agreement that looks a bit flexible as to who gets the cash. Except this one still doesn’t fit: “Labour Market Partnerships may be used to provide assistance for employed persons who are facing loss of employment.” That’s not one of the criteria listed for businesses to get the cash from Friday.
Far from it.
That brings us to the connection to minimum wage and with that we are talking about the number of companies who will get cash - maybe up to 600 - and the amount of cash, which at $2.0 million, is pretty small, as you’ll see.
Let’s start with the number of companies. Fewer than 100 employees makes it a *small* business. In 2021, federal stats tell us there were 15,865 businesses in total. About 98% - that is, 15,560 - of them are small businesses, all of which are likely by their nature to hire at least one person at minimum wage. In December 2022 - the most up-to-date provincial numbers - there were 15, 592 businesses in total and, again, 98% had fewer than 100 employees. The single largest sub- category - 8,371 in 2022 - had between one and four employees. About 88% of businesses in this province have fewer than 20 employees.
So 600 is a weirdly small number. Weird because it’s so close to the size of the townie Board, which the Board says is 700 members. That could be a coincidence or the townie Board’s numbers may be out of date. But either way it’s weirdly small, just like it is weirdly small to be handing out a single lump sum to a business given the provincial government already did a transitional program for *all* businesses with minimum wage workers.
That program offered a maximum of a $1000 for *each* minimum wage worker. It cost $5 million and covered a part of the wage increases in 2022. The scheme announced Friday gives a handful of companies somewhere between 2,500 bucks and $5,000 total in a lump. The Take-Out-The-Trash Day scheme also favours bigger employers. Says so right in the announcement. You get the big money if you run a full-year business, you have more employees in total, and have more employees on minimum wage.
Right off the bat all the seasonal businesses, the not-for-profits, and the small full-year businesses are at a huge disadvantage. And from the numbers we know there are 22 times *more* of them than the larger employers even if we use the cut off that you must have no more than 99 employees to get cash. There’s over 13,000 potentially eligible companies but you really only get that 600 figure if you skew the rules to favour the bigger businesses.
And it’s not like the townie Board is trying to hide what it is doing. Look at the business owner the townie Board trotted out to explain why this was wonderful. As VOCM reported, “Sarah Deer’s family has owned a Mark’s franchise in the capital city for decades, and she took over the franchise in 2018.” AllNL’s story quoted Deer as she explained that her two stores in St. John’s employ 100 people around Christmas but usually have 70 employees about half of whom earn minimum wage.
She’ll grab five grand, no sweat. But the local berry festival or theatre troupe or tour boat operation in rural Newfoundland and Labrador? SOL. The rules favour companies like Deer’s, which are coping with infkatins and other challenges like everyone else but that have more than a few advantages, including being a franchise of a big national chain.
But look at the numbers again to show how shagged up this whole announcement is. Deer’s wage bill for 35 employees at last year’s minimum wage (we’ll use $15) for 50 weeks a year is $525,000. One employee’s wages would be $15,000. She’ll get the full five grand but that’s all. It’s a picayune amount. Why is she excited?
Now consider that the business with two employees, one of them on minimum wage. It will get - at most $2,500 - and that’s *if* they get any money at all. Remember, this cash is on a first-come, first-served basis. The bigger businesses have a huge advantage in being able to get the paperwork done in a hurry and filing it right away so they are at the front of the line. That genuinely deserving company would actually get a sizeable hand up from even the $2,500 and the $5,000 might allow them to take on an extra hand this year if business was up. But that’s not happening under this scheme.
Organizations that pay minimum wage but who depend on donations for their income have to work even harder to make ends meet since they cannot raise prices to bring in extra cash. They don't seem to be covered by this. No one worries about them.
Meanwhile, no one should miss the bar and restaurant owners who already benefit from the current minimum wage scheme. They are the only businesses where some of their employees are paid by customers directly. Wait staff in Canada make an average of $30 an hour or more once you include the portion of their income that comes straight from customers as tips. Employers benefit because they get the employee heavily subsidized by the customers but only have to cover the minimum wage and the associated labour costs like deductions for federal pension and employment insurance at the low rate. Pretty sweet deal for everyone.
Before you mention a certain saintly, high-end restaurant that paid everyone 20 bucks and hour and banned tipping, remember that they did so at enormous cost to their own employees many of whom had to take a huge income cut for the scheme to work. Those workers got zero benefit and zero support from self-styled workers’ champions including the unions behind the 15 and fairness scam.
Bars and restaurants fall into the most favoured category under this scheme and while five grand won’t shift their bottom line very much, the program will give them money long before any cash at all goes to the Bunghole Tickle Heritage Society’s plans to hire a couple of university students to staff up the tourist booth this year and for whom the hike in minimum wage is a real burden. No one tips their workers.
But that doesn’t matter anyway. The program Davis announced is wildly skewed in favour of a handful of businesses better able to cope with higher wages not the ones that need it. Even if you gave money only to really small businesses and gave out only $2,500, you still only help 800 of them, max. There’s still almost 15,000 that wouldn’t get a dime and two thirds of those are not on the northeast Avalon. That's the real horror show, the real dishonesty here.
Whatever is going on, this scheme has precisely nothing to do with helping businesses cope with minimum wage increases or any other costs. That’s obvious. It’s not even politically sensible for the Liberals politically given that it screws over most businesses across the province, Bernie Davis’ district and all those around him included.
For the townie Board and the defunct employers bunch, if they are trying to showcase their advocacy skills and their knowledge of small businesses in their own city - let alone their work on behalf of the whole province - whatever business problems they’ve had with this merger scheme will likely get a lot worse once they have to say no to thousands of businesses on the northeast Avalon alone when chitnzy pot of cash dries up. The rest of the province already thinks the townies are out to get them anyway. This will look like more proof.
No one with business sense or a political clue would get behind this no matter how hard up they are. Yet on Friday, a cabinet minister, the head of the St. John’s Board of Trade, and the ex-chair of the employers council smiled for the cameras and told everyone their turd of a scheme smells lovely.
We live in a very weird place, with a very weird way of governing. The government creates a problem, then comes along to solve said problem.
They created this problem, with an artificially created make believe minimum wage. Now they are giving certain businesses a subsidy to offset the problem of higher wages that THEY created in the first place.
Or government jacks up the carbon tax, then creates a subsidy to give people back the money. What?
And why is government involved in setting prices in the fishery? Seriously? What about the novel idea where supply and demand determines a price?
How about this for a change? Get government out of the way, and see what happens. Certainly it wouldn't be any worse. It couldn't be worse. The problem in Nfld right now is mindset. The government is looked on to solve every problem. And more often than not, they do a poor job of it.