Right in the centre - More on money


Ken Waddell
Neepawa Banner & Press

Whenever you read charts and do some math you run a bit of risk. On Jan. 19, I wrote about the minimum wage increases, especially the situation in Ontario. I said, “From the employee point of view, a 40 hours a week job at minimum wage of $11.15 per hour comes to $446 per week. At that level, there is no federal income tax, the provincial tax is $6.73, CPP is $15.41 and EI is $7.40. Net is $416.46 per week. At $15 per hour the wages rise to $600 per week, federal tax kicks in at $10.03, provincial tax at $22.26, CPP at 32.29 and EI at $ 9.96. Net is 534.71.” The net difference was $118.25. 

Turns out, I was wrong. We made a mistake reading the tax charts relating to the number of pay periods and federal tax. What we should have said was at a 40 hours a week job at minimum wage of $11.15 per hour the wages come to $446 per week. At that level, the federal income tax is $25.47, the provincial tax is $25.86, CPP is $18.75 and EI is $7.40. Net is $368.52 per week. At $15 per hour the wages rise to $600 per week, federal tax kicks in at $47.04, provincial tax at $41.39, CPP at 26.37 and EI at $ 9.96. Net is 475.24. At $15 per hour a Manitoba worker would take home $106.72 more per week in net pay which is a bit less than I said on Jan. 19.

The point I was trying to make, in spite of the wrong figures, is that minimum wage increases don’t yield as much benefit to workers as one might think. The $106.72, after GST and PST on purchases nets out at only  $94.44 in actual increased purchasing power for the employee when it has cost the employer $154 plus the employer extra share of EI at $3.58 and extra CPP at $7.62 which comes to an additional $11.20. The employee gains $94.44 more in actual spendable cash and the employer incurs an increase in cost of wages of $154, EI of $3.58 and CPP of $7.62 for a total of $165.07.

The big winner in any minimum wage increase is the governments, just add it up and you can easily see who wins. No wonder governments want to jack up minimum wage, it fills their coffers. If people want to check the tax charts I would welcome that too.

•The province of Manitoba says it wants to see more care homes and they have some money to help get them built. The province says they will help with care home construction up to $133,000 per bed. We have to remind ourselves that Country Meadows care home in Neepawa cost $30 million for 100 beds and that’s $300,000 per bed. Worse yet, that was several years ago so it is anybody’s guess what it would cost now. The NDP are pointing out that the current government isn’t being realistic about care home construction.

It should also be noted that the current government may not have a lot of choice. Faced with a deficit and a huge public debt, the $133,000 cap may be their only way to go. So what can a group or community do to bridge the gap in care home beds? As I often do, I wonder if all the options have been explored. Would smaller, privately owned care homes be a possibility? Does the staff have to be unionized? Without compromising safety, do the buildings have to be as elaborate or, dare I say, as “fancy” as today’s standards seem to dictate?

It seems odd that care home construction costs can only be fractionally covered by $133,000 per bed. In contrast, a modest three bedroom home with two baths, a kitchen and living room could conceivably be constructed for three times $133,000 or $399,000. At that rate a 10 bedroom facility with a common area should be reachable at a lower per room cost as the common costs of kitchen, land and services would be divided over 10 rooms instead of three.

Also knowing how government works, it can safely be assumed that the pre-construction costs are enormous. Engineering, architecture, regulations and studies all add up. If a group planning to build doesn’t run out of money before they get started, they run out of patience and energy. Once a care home is built there its also a bureaucratic maze to go through to determine how much a resident pays and how much it costs to run the place. I suspect the overall process is just way too complicated and expensive.

The health department may well be researching solutions, and I hope they are, but making care home beds simply has to become simpler and less expensive than our current slow and slogging system.