Canada’s federal and provincial governments have announced a minimum wage boost in the coming months.
Ottawa announced that federally regulated private-sector employees would get around a one-dollar pay increase on April 1. Employment and Social Development Canada (ESDC) says this increase is to keep pace with inflation, which rose by 6.8% in 2022.
Provinces across Canada, including the Yukon, Manitoba, and Nova Scotia, are also set to bump their minimum wage in April and October.
📢 Attention! The federal minimum wage will increase on April 1! It applies to federally regulated private sectors.
🚨 Employers: Payroll information must be updated with the new rate by then.
Learn more ➡️ https://t.co/FRXmccrMdH pic.twitter.com/FEpI31R1c1
— Employment and Social Development Canada (@ESDC_GC) March 21, 2023
While a pay raise may sound promising for Canadians working minimum-wage jobs, it isn’t necessarily enough to battle the rising cost of living. This is where discussions surrounding paying people a living wage come in.
You may have heard of restaurants scrapping tips and opting instead to pay their workers a “liveable wage.”
As parts of Canada gear up to increase its minimum pay for workers, we spoke with experts about why considering a living wage is important and why the minimum wage is just that — the bare minimum.
Minimum wage vs. living wage
Let’s start with the basics — what is the critical difference between making minimum wage and living wage?
According to the Cambridge English Dictionary, the definition of a living wage is the minimum income necessary for a person to meet their basic needs.
“The minimum wage can go up to $18 an hour, and if you’re working full-time, you’d still be unable to live,” Ontario Living Wage Network spokesperson Craig Pickthorne told Daily Hive over the phone.
Pickthorne says the minimum wage is politically set by legislation, sometimes influenced by inflation.
The Ontario Living Wage Network is one of many non-profit organizations across Canada that calculates local living wage rates yearly.
Pickthorne says they consider the current costs of goods, services, shelter, food, transportation, childcare, medical, internet and cellphone plans, and more.
“So, what we get after all that is an amount that someone must earn per hour to make ends meet,” he said.
“That’s deeply in contrast to the minimum wage, which is just a number… It’s somewhat arbitrarily set in that it’s what the current government, whoever they may be, thinks that they can get away with and still be on the right side of certain interest groups.”
- You might also like:
- Canada is raising the federal minimum wage next month
- These spots in Canada are raising the minimum wage this year
- Budget 2023: Grocery rebate coming to help Canadians fight food inflation
The history of minimum wage in Canada
Historically, Canada’s minimum wage policies were implemented to protect women and children from exploitation.
BC and Manitoba were the first provinces to introduce a minimum wage in 1918.
While it was first used to acknowledge that you can’t have free child labour, Pickthorne says minimum wages haven’t kept up with the times.
“That was from the previous century. The majority of minimum wage workers now are not teenagers with no bills and living at home,” he said.
“Seventy-five percent of minimum wage earners are people over 20. They have households to support; they have bills to pay.”
Will the upcoming minimum wage bumps be enough?
Pickthorne says the simple answer is no, especially when considering inflation.
According to Statistics Canada’s latest report, housing costs continue to rise, and last month marked the seventh consecutive month of double-digit increases in grocery prices.
While inflation drives up the living wage rate for Canadians, Pickthorne says it essentially nullifies minimum wage increases.
“Even if you get a raise by 50 cents, which was last year in Ontario, the inflation just eats it up entirely, and your real wages have gone down,” he said.
“If you measure how far your money can go as far as buying goods and services, you’re actually getting a pay cut.”
How much must you earn to make a real “living” wage?
As of 2022, the living wage rate is as low as $18.05 in London, Ontario, and as high as $23.15 an hour in the Greater Toronto Area, according to the Ontario Living Wage Network.
“It’s a modest existence; it doesn’t take into account debt servicing or savings for retirement or homeownership,” stressed Pickthorne.
In British Columbia, the living wage is as low as $19.14 in Kamloops, BC, and as high as $24.29 in Victoria, according to Living Wage for Families BC.
The minimum wage in BC is predicted to increase by one dollar to $16.72, according to Living Wage for Families BC spokesperson Anastasia French.
“There is still a $7/hour gap between the legal minimum you must pay workers and what they actually need to survive,” she told Daily Hive over email.
According to Alberta Living Wage Network coordinator Ryan Lacanilao, the living wage rates are between $19.65 and $22.50 per hour.
Updated living wage rates will be released in November 2023.
What we need from governments and employers
Organizations like the Ontario Living Wage Network also certify employers who have agreed to pay the local living wage.
Pickthorne says they’ve currently signed up 560 employers in Ontario. In BC, French says there are nearly 400 companies that are paying staff a living wage.
While some employers are doing the work, Lacanilao says there are still more ways these workplaces can advocate for their employees.
“Advocate [the] government for policies that lower the cost of living for those who need it in your community,” he told Daily Hive over email.
And, of course, governments have a long way to go.
“This is a conversation about the value of work,” said Pickthorne.
He says the last few years have destroyed the myth of unskilled labour or menial jobs.
“Most any job that someone is doing, if you remove them from that job, we’re going to have problems,” he added. “So, if you need the job done, then pay at least a living wage because if you work full-time and can’t make ends meet where you live, what else is work for.”