What is the minimum wage in Canada?

Minimum wage is defined as the lowest amount of money employers need to pay you for your services as per the law in Canada. It’s the minimum dollars paid per hour to all Canadian wage earners, regardless of their age, role or the type of employment.

Minimum Wage: protecting Canadian workers

The concept of minimum wage was created to protect employees from exploitation and bring uniformity in how people are paid, regardless of their age, gender, or race. In today’s date, it acts as a means for the working class’ standard of living to keep pace with uncertain economic conditions and inflation.

Canada’s provincial and federal minimum wages

The minimum wage that workers must be paid can vary depending upon which Canadian province they live in as the provincial minimum wage is different from the federal minimum wage.

As of October 2022, the federal minimum wage in Canada, which is influenced by the Consumer Price Index, stands at $15.55. The provincial minimum wages in Canada are as follows:

• The minimum wage in Alberta is $15

• The minimum wage in British Columbia is $15.65

• The minimum wage in Manitoba is $13.50

• The minimum wage in New Brunswick is $13.75

• The minimum wage in Newfoundland and Labrador is $13.70

• The minimum wage in Northwest Territories is $15.20

• The minimum wage in Nova Scotia is $13.60

• The minimum wage in Nunavut is $16.00

• The minimum wage in Ontario is $15.50

• The minimum wage in Prince Edward Island is $13.70

• The minimum wage in Saskatchewan is $13.00

• The minimum wage in Quebec is $14.25

• The minimum wage in Yukon is $15.70

The provincial minimum wages in Canada are governed by the labour legislation of each province, and all provinces and territories have their independent process to decide when and by how much to raise the minimum wage by. Certain provinces in Canada, like Saskatchewan, automatically adjust their minimum wages according to the Consumer Price Index while some, like the Northwest Territories, review their minimum wage every two years.

Certain provinces regularly announce small increments in advance while some provinces don’t make changes as frequently, but announce significant increases when they do. For example, Nova Scotia has already announced their plans to raise their minimum wage to $15 by October 2024, while Alberta hasn’t changed their minimum wage from $15 since 2018.

Who does the federal minimum wage apply to?

Despite the fact that the federal minimum wage recently increased to $15.55 across Canada, relatively few workers saw a pay boost. The federal minimum wage is only applicable to those employees covered under part III of the Canada Labor Code.

According to a report from Littler, only about 10 percent of the Canadian workforce is subject to the federal minimum wage. Approximately 90 percent of Canada’s workforce is instead subject to provincial jurisdiction. The federal minimum wage is paid to federal employees and workers in specific industries with extensive federal connections.

Exceptions and special cases to the minimum wage

There are some categories of jobs that qualify for special minimum wages in certain territories and provinces.

For example, Ontario recently announced that students under the age of 18 years who work 28 hours or less per week when school is in session are entitled to a student minimum wage of $14.60 per hour, whereas as students who work more than 28 hours per week when school is in session qualify for the general minimum wage of $15.50 per hour.

Similarly, in Quebec, employees who earn tips earn a minimum wage of $11.40 per hour, compared to Quebec’s general minimum wage of $14.25 per hour. Both Quebec and Ontario employ a tiered system that pays certain industries or roles more or less depending upon the gratuities they earn.

The minimum wage has become more common

The minimum wage hasn’t only gradually increased over time, it’s also come to become more common across the workforce. According to Statistics Canada, for instance, the proportion of employees earning a Canadian minimum wage lept from 5.2% to 10.4% between 1998 and 2018. These days, minimum wage earners are more likely to live in urban areas than rural areas, though the opposite used to be the case across Canada in the 1990s.

Most minimum wage earners don’t have a post-secondary diploma or degree. More minimum wage earners work in retail than any other sector, though accommodation and food services also employ many workers across Canada. While there is no consensus about the long-term effects of the minimum wage in Canada, the majority of Canadian economists and citizens remain highly supportive of minimum wage laws and other labor standards.

What’s in store next for the minimum wage in Canada

Despite the recent increases to the minimum wage in Canada, and the general perception that the Canadian economy is oriented toward the middle class, there’s still a lot of criticism that the raises are not keeping pace with the rising inflation rates. With Canadian workers still recovering from pandemic-related shutdowns and the fear of recession looming on the horizon, experts suggest making minimum wage increases automatic to make them more predictable for the workforce as well as business owners.

While this ends up happening or not remains to be seen, one thing for certain is the increased support for raising the minimum wage; higher wages are associated with greater levels of consumer spending and financial security. The minimum wage at both the provincial and federal levels has proven to be incredibly valuable for households with diminished access to education and skill training.

Luckily, few workers earn the minimum wage forever. It’s often a starting point for low-skilled workers who are just beginning their professional careers. With sound financial management skills, even minimum wage workers can make a nice living for themselves across Canada. As time goes on, we can expect minimum wage earners and the amount they earn to both increase.