Raising the minimum wage is not a lever you can so easily pull to increase tax revenue. There's a lot of unintended consequences that follow. For one, it will add fire to inflation because those costs will be passed down to consumers.
Lets stop right there. The typical minimum wage retailer has labour as between 11-15% of cost of goods sold.
That means, that if you raise wages at said employer by say 20%, the impact on consumer prices is in the 2-3% area, well within normative inflation.
Even if you factor a markup; you'll also adjust for productivity, and trust me, I know these figures, your pass through cost on average will not exceed 3%
On top of which, the majority of household expenses are not minimum wage sensitive (housing, utilities etc)
California's GDP output is almost twice as great as Canada's with nearly the same population. They can afford to have a higher minimum wage. This is an apples to oranges comparison.
I disagree, I would posit that the higher minimum wage is a driver of the economy there. Its not only more consumer spending, its also more investment in productivity to avoid labour cost.
Again, raising taxes has many unintended and un-costed consequences. You only need to look at the economic productivity of high-tax provinces like Quebec versus low-tax provinces like Alberta (see chart below). Indiscriminately Increasing taxes for everyone (like a blanket HST increase) will almost certainly hamper economic activity, which will reduce tax revenue (ironically), and make building more expensive.
This is not a comparison I agree with, Alberta's productivity is driven by global resource prices and crashes when those do as well, its highly volatile.
Taxes are far higher than here in many European jurisdictions ; and minimum wage is higher in Australia which is also more productive. PS, the minimum wage was higher in Australia before its economy was more productive
See the year 2001, when Australia still boasted a minimum wage much higher than prevailing here, but Canada was 3k per capita more productive in U.S. Dollars.
I'm not sure how pumping money into social assistance programs through new taxes will get more built. Like my point above, it doesn't add to economic output
That's just a bizarre statement. Every single dollar you give to someone whose desperate will be spent.
That's a higher throughput into the economy than any transfer to anyone higher in income in cash or benefits or any transfer to business.
and will probably add to inflation.
Approximately 3.5% of Ontarians are on OW or ODSP. A 20% increase in their benefit would represent a 0.7% inflationary impact at the most. That would also be highly improbable, because, for instance, with that higher benefit recipients are more likely to shop at a grocery store, instead of a food bank; but that is offset by fewer people buying groceries for the foodbank.
If increasing taxes and air dropping it to people worked as a tool to increase economic productivity and get more built, every country would do it.
That's a gross over simplification.
Clearly any thoughtful position would be a great deal more nuanced.
Currently, Canada is on the verge of stagflation and we desperately need to increase economic activity if we want to meet the challenges ahead. Our GDP per capita is falling way behind America, our paychecks are buying less, and we are not drawing foreign investment like we used to. Increasing taxes will hurt Canada more than help us at this point.
If we were talking about raising the general corporate tax rate, or personal income tax, you might have a point. But as Canada's sales taxes are low by global norms, I'm not buying.
Moreover, you can't reasonably argue that we need higher pay cheques, but then argue against the minimum wage being raised, those two things are contradictory.
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All of that said, this tangent has now wandered very far afield from this development, perhaps we should park this discussion and/or move it to better thread.
