08/09/2012 09:25 EDT | Updated 10/09/2012 05:12 EDT

Newfoundland should hold the line on minimum wage hikes, says business group

ST. JOHN'S, N.L. - The Canadian Federation of Independent Business says hiking the minimum wage is not the best way to help Newfoundland and Labrador's low-income earners.

An advisory committee has been tasked with reviewing the minimum wage in the province, which has been $10 an hour since July 2010.

That's up from $6.25 an hour in 2005.

But the federation says the government should hold the line on increases and instead make changes to its personal income tax system.

The federation says Newfoundland and Labrador has the second lowest basic personal exemption in the country.

It says the government would be better off increasing the amount one can earn before paying taxes.

Leanne Hachey, the federation's Atlantic vice-president, says business owners that can't keep up with wage increases can end up cutting back on staff hours, reducing investments and eliminating positions.