The minimum wage in Canada is an important part of government policy that ensures fair compensation and protects all workers from being exploited. The minimum wage rate applies to all workers. All employers must pay their subordinates at least the minimum wage as per relevant legislature.
Canada first established minimum wage laws in the early 20th century. Minimum wage standards ensure that employees are paid minimum compensation and are protected from exploitation, especially of non-unionized workers. The goal of minimum wage laws is to address income inequality, improve quality of life for all, and stimulate economic growth by creating an incentive to work - all of which are positive minimum wage effects.
Minimum wage rates were first introduced in Manitoba and British Columbia in 1918. Soon after, Ontario, Quebec, Nova Scotia, and Saskatchewan established minimum wage rates. Prince Edward Island was the last province to establish minimum wage rates, in 1960.
In Canada, there is a federal minimum wage, but provinces have also established their own minimum wage rates. Therefore, the minimum wage varies from province to province. Before 1996, the federal minimum wage rate was falling behind provincial minimum wage rates.
It had not changed for a decade, at $4.00/hour in 1986, while provincial and territorial minimum wage averaged at $5.95/hour. To keep up with rising prices, minimum wage legislation was amended to adjust automatically with provincial and territorial changes. Consequently, today, minimum wages in Canada are periodically updated to keep up with inflation and the cost of living.
As an employer, it is tricky to keep up with Canadian minimum wage updates. However, it is necessary to make sure you are paying your employees fairly. Let's explore recent updates to minimum wages across Canada.
Minimum Wage Rates in Canada
As of April 2023, Canada’s federal minimum wage has increased to $16.65/hour from $15.55/hour to keep up with the pace of inflation, according to the Consumer Price Index. The federal minimum wage only applies to employees working for federally regulated industries.
These industries include Crown corporations such as VIA Rail, Canada Post, Canadian Broadcasting Corporation (CBC), Bank of Canada, and electric utilities in all provinces. Federal Crown corporations are federally owned organizations that have a structure similar to that of a private company.
According to minimum wage legislation, federally set wages are essentially the current general minimum wage and represent the minimum wage requirements in Canada. However, an employee's minimum compensation entitlement depends on the province their work in.
Each province and territory in Canada sets a per-hour minimum wage that may be higher than the federal one. If it is, then the employee's regular wage will reflect this amount.
There is no weekly minimum wage rate or monthly minimum wage rate. But for full-time staff, the employer can multiply the calculated hourly wage rate by 40 hours per week or 160 to 180 hours per month to understand their salary obligations for a given pay period.
Once you’ve calculated your employee’s earnings, you must also deduct taxes and other statutory contributions. Maximum allowable deductions cannot amount to more than two thirds of an employee’s salary.
Minimum Wage in Alberta
The minimum wage in Alberta increased to $15/hour in June 2019. Currently, it remains the same and is less than the federal minimum wage. This minimum wage rate applies to all workers, except for students aged below 18; the student minimum wage is $13 per hour.
The increase aimed to provide workers with a fair wage and reduce income inequality in the province. While this decreased Alberta's poverty rate from 7.1% in 2018 to 6.4% in 2020, the rate is increasing once more.
The Albertan minimum wage is not keeping up with living wages calculated by the Alberta Living Wage Network. Living wages across Alberta are:
- Calgary: $22.40/hour (2022)
- Edmonton: $21.40/hour (2022)
- Canmore: $32.75/hour (2022)
- Fort McMurray: $22.50/hour (2022)
- Lethbridge: $20.30/hour (2022)
Minimum Wage in British Columbia
British Columbia’s minimum wage was increased to $16.75/hour from $15.65/hour, effective as of June 2023. This 6.9% increase also applies to wage rates for live-in caretakers, support workers, and camp leaders. Minimum wage rates for hand-harvesting 15 specific crops, as outlined in BC's Employment Standards Regulation will increase by 6.9% too.
The increase aimed to provide workers with a livable wage, tie minimum wage rates to inflation, and reduce poverty rates in the province. BC has the second highest poverty rate in the country, with over 382,000 British Columbians living in poverty.
The increase in the minimum wage has had a positive impact on workers earning the minimum wage in BC. This increase aims to improve the financial stability of over 150,000 workers in BC.
However, some businesses have raised concerns about the impact of higher labor costs on their profitability. This is especially true for smaller businesses who don't have the same funds as large companies. Furthermore, the minimum wage is not near the average living wage in BC yet. In Metro Vancouver, the living wage is $24.08/hour and $24.29/hour in Greater Victoria.
Minimum Wage in Manitoba
The minimum wage in Manitoba has been increased to $15.30/hour, effective as of April 2023. This is less than the federal minimum wage rate. Manitoba increased the provincial minimum wage rate twice in a year. By increasing the minimum wage rate by a total of $3.35, employees on a minimum wage salary can expect to earn 30% more.
This increase aims to help Manitobans face inflation and other financial challenges imposed by COVID-19. This is also aimed at reducing Manitoba's poverty rates. Manitoba has the highest child poverty rate among Canadian provinces.
The Manitoba government also created the Small Business Minimum Wage Adjustment Program to support small businesses through these minimum wage rate hikes. While this is a great program and minimum wages have increased, they do not address Manitoba's real living wage, which is at least $18.34 in Winnipeg.
In Manitoba, employers must pay all employees the minimum wage unless they are not covered by provincial employment standards or are excluded from the minimum wage legislation. The current minimum wage legislation currently doesn't cover domestic workers working less than 12 hours/week, employees in an approved provincial or federal training program, and electoral officials.
Minimum Wage in New Brunswick
The minimum wage in New Brunswick increased to $14.75/hour in April 2023 from $13.60/hour. New Brunswick's minimum wage rate increases according to the consumer price index, says the New Brunswick government. While this is great for the 5% of employees who earn minimum wage in the province, the minimum wage is not near what the living wage in New Brunswick is, at $20/hour.
All employers must pay employees the minimum wage, at the very least. This applies to all employees except counselors, camp counselors, and certain employees in government construction work who earn a special minimum wage rate.
Minimum Wage in Newfoundland and Labrador
Newfoundland's minimum wage rate will increase by $0.50 in 2023. Currently, the minimum wage rate is $14.50/hour, and is set to become $15/hour as of October 2023. Although the minimum wage is increasing, it is rarely keeping up with the rising costs of housing, gas, and food in Newfoundland. According to the Workers Action Network, an increase later this year is too little, too late.
Newfoundland's living wage has only been calculated once, in 2019, and it was estimated to be $20/hour. Benchmarking with this information, the next minimum wage increase would still be $5 less than the living wage in 2019.
Minimum Wage in Nova Scotia
The minimum wage in Nova Scotia is also increasing twice in 2023. Nova Scotia's minimum wage increased to $14.50/hour in April 2023, and is increasing to $15/hour in October 2023. These increases are occurring and have even been sped up due to recommendations by the Minimum Wage Review Committee to help Nova Scotians deal with the challenges of inflation.
These increases are occurring to keep in line with the rest of Atlantic Canada. Despite two minimum wage increases, the provincial minimum wage remains lower than the federal wage rate. The living wages in Nova Scotia are:
- Annapolis Valley: $22.40/hour (2022)
- Cape Breton: $22/hour (2022)
- Halifax: $23.50 (2022)
Minimum Wage in Northwest Territories
The minimum wage rate in Canada's Northwest Territories (NWT) is increasing from $15.20/hour to $16.05/hour in September 2023, nearly 5.6%! This increase reflects changes inflicted by inflation.
The territory is using a new formula based on percentage changes in Yellowknife's consumer price index. Yellowknife is NWT's capital, and where its largest community lives. This new approach is said to have achieved a moderate and predictable increase to the minimum wage rate. By doing this, it ensures steadiness and assurance for the business sector in the region, while simultaneously helping NWT residents cope with rising expenses.
While NWT residents will be paid a more livable wage, this increase in the minimum wage is still not a living wage. The living wage is estimated to be around $23.28 in Yellowknife as of 2022. These increases have not been welcomed by private businesses either, due to the stresses the NWT economy has experienced in the past three years. Flooding, wildfires, and recovering from COVID-19 are sources of these stresses.
Minimum Wage in Nunavut
The minimum wage in Nunavut is $16/hour. This increased from $13/hour. However, this has remained the same since 2020. Nunavut already experiences a high cost of living due to its remote location.
The Government of Nunavut is currently reviewing the territorial minimum wage after record high increases in prices. This minimum wage was the highest minimum wage in 2020, but no more.
Minimum Wage in Ontario
The minimum wage in Ontario has been increased to $16.55/hour from $15.50/hour. This will be effective from October 1, 2023 and is the highest provincial minimum wage. The increase aimed to provide workers with a fair wage that reflects the rising cost of living in the province.
According to the Ontario government, nearly a million people will benefit from this 6.8% pay raise, especially for low income workers in Ontario. This increase means an employee earning the minimum wage and working 40 hours a week would earn nearly $2,200 more per year.
This increase also applies to jobs with a special minimum wage rate in Ontario. These jobs include hunting, fishing, and wilderness guides. Their earnings rose from $77.60 to $82.85 per day for shifts lasting less than five hours, and from $155.25 to $165.75 per day for shifts lasting five hours or more.
Students who are below 18 years old and work for a maximum of 28 hours per week while school is in session or during breaks and summer vacations, will also receive a wage increase from $14.60 to $15.60.
This minimum wage increase to reduce income inequality and improve the standard of living for minimum wage earners. The Ontario government wants to make Ontario the best place to live, work, and raise a family.
However, some businesses have expressed concerns about the impact of higher labor costs on their operations. Furthermore, according to the Ontario Living Wage Network, the living wage in many parts of Ontario is $19, and over $23 in the Greater Toronto Area.
Minimum Wage in Prince Edward Island
Like Manitoba, Newfoundland, and Nova Scotia, Prince Edward Island (PEI) is increasing its minimum wage twice in 2023. As of January 2023, the minimum wage is $14.50/hour. The minimum wage will increase to $15/hour in October 2023.
While these increases are implemented to curb inflation, the province is searching for longer-term solutions so that businesses can also receive a return on investment while bearing higher wage costs. These increases in minimum wage also do not measure up to PEI's living wage, which was $19.30 in 2020.
Minimum Wage in Quebec
Quebec's minimum wage is $15.25/hour as of May 2023. The minimum wage has increased by 7%. The Ministry of Labor estimates 300,000 employees will benefit from this minimum wage increase. The Quebec government has implemented these changes to meet the needs of low-income families.
While increases are positive, they aren't enough and inadequately address poverty in Quebec. Many business owners also think this hike is too much for businesses to absorb.
Minimum Wage in Saskatchewan
The minimum wage in Saskatchewan has steadily increased by $1 from 2022 to 2024. As of October 1, 2024, the minimum wage rate in Saskatchewan will be $15/hour. In 2023, the minimum wage is the lowest in Saskatchewan at $14/hour.
While the provincial minimum wage has increased steadily to address inflation, it is still lower than the federal wage rate and the province's living wage rates, which are closer to $16.23 in Regina and $16.89 in Saskatoon. The Saskatchewan government is making these changes to make the province an attractive destination for quality investments and jobs to grow the Sasktchewan economy.
These minimum wage increases don't apply to employees in farming, temporary babysitters, non-profit volunteers, athletes, garden laboring, and providing in-home care (with exceptions). Employees who have physical or mental disabilities and are enrolled in certain educational or rehabilitative programs and working for non-profits or institutions are also exempt.
Minimum Wage in Yukon
The minimum wage in Yukon is the highest Canadian minimum wage at $16.77/hour. This was increased from $15.70/hour. The 2022 Whitehorse Consumer Price Index, which stands at 6.8% determined the rise. The Yukon Government hopes this increase helps Yukon residents save for their futures, combat inflation, and help low-income families afford basic needs.
Pay Compliantly in Canada with Borderless
The recent updates to the minimum wage across Canada have aimed to provide workers with fair compensation and improve their standard of living. While these increases have had a positive impact on workers, some businesses have raised concerns about the impact on their operations. It is important for governments to strike a balance between ensuring fair wages for workers and supporting businesses through these wage hikes.
Unsure on how to stay and pay compliantly? An Employer of Record (EOR), like Borderless, can help your business stay on top of minimum wage in Canada.
For more minimum wage news and information, speak to Borderless' team of in-house experts with in-depth knowledge of the latest changes in Canadian minimum wages. Ready to catch Borderless in action? Talk to us today!
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