Sudbury business owner says tax cuts, incentives won't be enough when minimum wage goes up

As the provincial government gets ready to roll out tax cuts and incentives for small businesses, some business owners in Sudbury say it won't be enough to offset the cost of raising the minimum wage.

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"I really feel that it's too little, and it will be too late," says Tania Renelli, the owner of Salute Coffee Company.

The local coffee shop opened three years ago, and Renelli says the young business just doesn't have the cash flow to weather the 30 per cent rise in minimum wage over the next year and a half.

'That's not going to have a positive impact'

In his fall economic update on Tuesday, provincial Finance Minister Charles Sousa announced that taxes on the first $500,000 of a business' profits will drop by 1 per cent down to 3.5 per cent as of this January, when minimum wage increases to $14.

Renelli says the profit margins of her coffee shop are too small for a one per cent tax break to really make a difference.

"I think it's comical," she says. "Outside of writing letters and talking to our local MPP and making my voice heard, I feel like my hands are tied."

"So laughing at something like that is really all that I can do, because that's not going to have a positive impact."

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Renelli adds that the cash incentives to hire young people that were also announced on Tuesday, won't solve the inevitable staffing issue she'll face in the new year.

"I think it's great that they're there, it's better than nothing," she says. "But at the end of the day, it's going to be about staffing the cafe as minimally as possible, to try to maintain profitability."

Balanced approach key, says Finance Minister

With the government moving forward on increasing minimum wage to $15 by January 2019, Minister Sousa says the incentives are about balancing the needs of small businesses with the needs of employees.

"It's all about trying to provide greater opportunity, and make our businesses more competitive," he said in an interview with CBC's Morning North.

"We want to make certain everyone's at their best, including supporting small business to make them even more competitive," he said. "So I'm taking a balanced approach, just as I'm balancing the budget."

But Renelli says next year will be especially difficult for her business.

"And I don't just mean difficult in that it's going to be short-staffed and things are going to be tight. It's going to be difficult to survive," she says.

"To say that I'm nervous about 2018 is an understatement."