On June 1, B.C.’s minimum wage will officially jump from $17.85 per hour to $18.25 per hour, a 2.1 per cent increase.
While this amounts to a $0.40 cent per hour increase, Hashem Aboulhosn, the chief growth officer at Merchant Growth, said it is happening during a tough time for small businesses in B.C.
“You’ve had this succession of challenges for small businesses,” he told Daily Hive in an interview.
First, there was the COVID pandemic, which shut down parts of the economy and impacted consumer spending. Then, the U.S.-Canada trade war and its tariffs caused a lot of uncertainty and increased costs for various products and consumers. Now, there’s the war in Iran, which caused gas to increase by nearly 30 per cent year-over-year in April.
“The 40 cents on its own may not seem like such a big deal, but when it’s the third or fourth wave that’s buffeting small businesses, they feel it much more acutely,” Aboulhosn said.
Merchant Growth recently surveyed B.C. businesses and found that in the last year, 38 per cent of B.C. businesses didn’t pass on any added costs to customers, while 28 per cent passed on less than a quarter of added costs.
“A large share of small businesses experienced effectively a compression of their margins, which reduces the capital that they have available to invest and take out of the business for themselves,” Aboulhosn said.
“I think that the minimum wage is another straw, as it were, rather than in isolation being the most significant thing.”
The Merchant Growth survey also found that 53 per cent of small businesses said they plan to raise prices in 2026 due to cost escalations.
Aboulhosn said that increasing costs mean that businesses have less capital to reinvest in and stay competitive long term. They also might hire fewer people down the line.
But he acknowledged the fact that minimum wage will still fall nearly $10 short of Metro Vancouver’s living wage of $27.85 per hour, which is the amount that a full-time worker needs to earn to meet basic needs, avoid ongoing financial stress, and take part in their community.
He called the situation “a squeeze from both ends.”
“It’s a complex issue. I think we’ve got a major cost-of-living crisis, and as any business owner wants their team to do well, they want to be able to live here and afford to live here.”
Gerald Renneberg, the owner of Basement Systems Vancouver, a company that fixes things like leaky basements, crawl spaces, parkades, and elevator pits, told Daily Hive the minimum wage increase won’t affect his business, with most of his staff earning “well above” it.
“I’m a realist. People can’t survive on minimum wage in the most expensive city in Canada. It’s impossible,” he said, in an interview with Daily Hive. “You’d have to have two or three jobs.”
Renneberg started his company 30 years ago, and he can attest to the challenging environment small businesses are facing. He’s been impacted by tariffs from the U.S.-Canada trade war, as a lot of their products are made out of plastic and steel. More recently, they’ve been hit by the surge in fuel prices, since they have six trucks in use.
“We’ve had to increase prices quite a few times in the past two years just to keep our head above the water,” Renneberg said.
Five years ago, they charged someone $7,500 to fix their crawl space, he said. Since then, cost escalation has forced them to charge double: it now costs $15,000.
Renneberg said that he’s noticed that many consumers are holding back on spending. While he said most people can’t really ignore the issues they fix (like a leaky basement), they are finding that the average job sold is getting smaller.
“People aren’t doing the extra add-ons that they could do to improve the quality of their home, like a full-size dehumidifier or an air purifier. Or they’ll just do part of the insulation in the crawl space, they won’t do the whole walls.”