Minimum wage rates are on the rise in Canada. In 2022, eight provinces and territories have joined the wagon to increase the minimum wage rate, and more are set for the rate bumps by the end of this year. This is great news for the workers looking to see some extra income in their bank accounts. Although, some business owners are concerned as this sudden change could lead to job losses and increased expenses. In 2018, Alberta was the first province to initiate and raise its minimum wage to $15 per hour and now Ontario was the first one to restart the movement in 2022.
Why there is a need for a minimum wage?
The minimum wage is described as the lowest hourly rate an employer must offer the worker under the law, irrespective of whether they work part-time or full-time. The minimum wage acts as a protection for non-unionized workers from exploitation. It effectively addresses inequality and helps in raising the standard of living. In the current scenario, the minimum wage is required to keep up the pace with inflation, average wage rates, and other economic factors.
What is the federal minimum wage?
According to Statistics Canada, the federal minimum wage came into effect on December 29, 2021, which automatically adjusts on April 1 every year based on the annual increase in the Consumer Price Index (CPI). This ensures that the federal minimum wage is in sync with inflation. In 2022, the rate showcases a 3.4% average annual rise in the CPI for Canada.
The federal minimum wage applies to the workers employed in the federally-regulated sectors such as banks, postal services and to name a few. In case, if you’re employed in a federally-regulated industry where the provincial minimum wage is higher than the federal minimum wage, then you will be offered a higher wage rate.
Here’s a quick preview of the highest minimum wage rate in the Canadian provinces:
|Canadian Province||Minimum Wage Rate||Recent Updates|
|NU||$16.00||With Effect From April 1, 2021|
|YT||$15.70||With Effect From April 1, 2022|
|BC||$15.65||With Effect From June 1, 2022|
|NWT||$15.20||With Effect From September 1, 2021|
|AB||$15.00||With Effect From October 1, 2018|
|ON||$15.00||With Effect From January 1, 2022|
|QC||$14.25||With Effect From May 1, 2022|
|PEI||$13.70||With Effect From April 1, 2022|
|NS||$13.35||With Effect From April 1, 2022|
|NL||$13.20||With Effect From April 1, 2022|
|NB||$12.75||With Effect From April 1, 2022|
|MB||$11.95||With Effect From October 1, 2021|
|SK||$11.81||With Effect From October 1, 2021|
The Pros and Cons of Increasing Minimum Wage in Canada
There are numerous speculations for and against increasing the minimum wage, however, it is essential to consider both aspects for a better understanding of this regulation. The pros of raising the minimum wage rate are that it would benefit the employees who make less than $15 per hour. And, it will definitely spike the economic activity. On the other hand, the disadvantage of increasing the minimum wage rate will lead to higher prices for consumers.