Ontarians who are earning minimum wage can expect to see a boost in their paycheques starting Wednesday, as the province raises the rate to keep up with inflation.
Minimum wage is increased every year to reflect the changing cost of food, clothing, shelter and other goods according to a media release from the province. Even with the adjustment, some advocacy groups say pay rates are still below what workers actually need to live on, especially in more metropolitan areas like Toronto.
When will the minimum wage increase in Ontario?
Beginning on Oct. 1, the general minimum wage will go up from $17.20 to $17.60 an hour, a 2.4 per cent jump that was calculated according to the Ontario Consumer Price Index. Tips and gratuities aren’t considered wages and aren’t included when calculating minimum wage according to the Employment Standards Act.
Though the general wage rate applies to most workers, some groups have different pay rates.
Students who are under the age of 18 and work 28 hours a week will also be seeing a 40 cent increase from $16.20 to $16.60 an hour.
Employees who work from home and make minimum wage in specified jobs such as sewing clothes, answering the phone for a call centre or writing software for a high-tech company, will make $19.35 an hour, compared to the previous $18.90 per hour. Students under 18 who work from home are also entitled to this pay rate.
The minimum wage for hunting, fishing and wilderness guides is based on blocks of time instead of by the hour. If they work less than five consecutive hours a day, the minimum wage is $88.05 but that increases to $176.15 if they work five or more hours in a day, regardless of whether they are worked consecutively or not.
If a worker’s pay is based on commission, either entirely or partially, it must still be equal to or more than the minimum wage for each hour they worked.
How does Ontario’s minimum wage compare to the rest of the country?
Once the increase comes into effect, Ontario will have the second-highest provincial minimum wage and the fifth-highest across Canada. British Columbia has the highest minimum wage of all the provinces at $17.85 an hour. All three Canadian territories have higher minimum wages than any of the provinces.
“At a time when many families are feeling the pressure of global economic uncertainty, our government will protect Ontario workers with a minimum-wage increase that supports our world-class workforce,” David Piccini, Minister of Labour, Immigration, Training and Skills Development, said.
The federal minimum wage was last increased on April 1 to $17.75 an hour and is also adjusted to keep pace with year-over-year cost of living increases.
Is Ontario’s minimum wage enough to live on?
While minimum wage is calculated to keep pace with inflation, some advocacy groups argue that the basis should actually be a “living wage,” which reflects what people need to earn to cover the actual cost of living in their community.
According to the Ontario Living Wage Network (OLWN), workers in the Greater Toronto Area would need to earn $26 an hour to cover their food, shelter, clothing, transportation, medical and child care needs, with enough left over for some recreational activities and an occasional modest vacation. That means minimum wage workers in the GTA would need a 48 per cent wage boost to meet the living wage from 2024, even after the upcoming inflationary increase.
Craig Pickthorne, the OLWN’s communications director, said employees making minimum wage in Toronto could still be $300 short from making ends meet every week, a deficit that keeps some in “working poverty.”
“That means you’d now have to get another job or you have to maybe enter the gig economy,” he said. “People start to have to make terrible decisions like what bills they’re going to go into arrears on so that they can cover rent.”
Whereas the province uses the Consumer Price Index, which takes the price change of different goods and services in Ontario, the OLWN calculates beyond products that the average person consumes.
“There’s more than just paying the basic bills, you want to be able to like go out in the community and go to a festival or go to see a movie or just participate in society. The living wage affords some of that but it is still a very modest existence,” he explained. The OLWN calculations don’t include savings set aside for retirement or buying a home.
The Canadian Centre for Policy Alternatives (CCPA) proposed a second way to calculate how much money Torontonians need to live; how much money workers would need to earn to rent a standard one-bedroom.
To rent a standard one bedroom apartment in Toronto without spending more than 30 per cent of their monthly income, a worker in the city would need to make at least $37.84 an hour. If they wanted to rent a two bedroom, they would need to earn $48.94 an hour.
Under this model, two people working minimum wage jobs would not be able to rent a one-bedroom apartment together without spending more than 30 per cent of their paycheque on shelter, according to the organization’s Ontario research director and political economist Ricardo Tranjan.
“The minimum wage is not anchored in any concrete measure,” he said, adding that it is a political decision. “It has no direct relation with the cost of living.”
