Minimum wage hike would have helped more low income workers – FAO

Report pans Ford Government's LIFT credit

Ontario’s Financial Accountability Office says the Ford government’s Low-Income Individuals and Families Tax Credit hasn’t done minimum wage earners any favours.

In fact, it says the average low-paid worker is worse off by about $400, and as many as 800-thousand minimum wage earners are getting nothing from the tax credit because they do not pay provincial income tax.

Queen’s Park offered the so-called LIFT credit when it cancelled the $1 an hour minimum wage increase that was supposed to happen January 1. Had it gone ahead, the FAO says 1.3 million people would have seen an average increase in their take-home pay of $810. Instead, under the LIFT credit, just a million low-wage earners will get a tax break of $409.

In addition, the FAO says opting for the tax break rather than the minimum wage increase will reduce government tax revenues by about $444-million a year for the next four years.