Canada’s Minimum Wage Explained

Employer and Social Development Canada defines minimum wage as the “lowest wage rate that an employer can legally pay its employees and is a core labour standard.”

Minimum wage applies regardless of how you are compensated; that is, it doesn’t matter if you are paid hourly, by salary, commission or an incentive basis. Most employees are eligible for minimum wage whether they are employed full-time, part-time or on a casual basis. Minimum wage is applied before deductions and does not have to apply to time spent having a meal anywhere or on a coffee break outside of the office.

According to a 2019 Federal Minimum Wage Issue Paper prepared by the Secretariat to the Expert Panel on Modern Federal Labour Standards, governments have historically established minimum wage standards to protect non-unionized workers, reduce the number of low-paying jobs, alleviate poverty, create incentives to work, address inequality and stimulate growth through increased demand.

The first minimum wage rates were established in Canada in the early 20th century and applied primarily to women and children. Legislation mandating compulsory school attendance and restricting child labour worked together to restrict child labour across the country beginning in the 1870s; by 1929, children under 14 were banned from mining and factory employment in most provinces. During the same time period, Manitoba and B.C. established minimum wage legislation in 1918 and two years later, Ontario, Nova Scotia and Saskatchewan followed suit. PEI was the last province to pass minimum wage legislation in 1960.

According to a 2018 report on the Recent Changes in the Composition of Minimum Wage Workers, approximately 1.565 million workers earned minimum wage, or 10.1% of employees. While almost 50% of workers were between ages 15 and 24 (students and non-students), almost 22% were aged 35 to 54 and 9.6% were ages 55 to 64.

Each province and territory is responsible for setting and enforcing its own labour laws and standards, including minimum wage. Each also has its own process for revising the minimum wage; for example, in legislation, by the current government or by an independent board or committee based on inflation, average wage rates or other economic indicators.

On December 29, 2021, the Canada Labour Code was amended to establish a federal minimum wage of $15 per hour rising with inflation.

On a federal level (and for workers in federally-regulated industries), to keep pace with inflation, the rate is adjusted automatically each year on April 1. In 2022, it rose to $15.55 per hour and last year it rose to $16.65. On April 1, 2024, the federal minimum wage was adjusted again to $17.30 per hour to cope with inflation, as the Consumer Price Index (CPI) rose an annual average of 3.9% last year.

Each province has its own schedule for revising the minimum wage but in general, increases are made in sync with changes to the inflation rate and Consumer Price Index (CPI).

For example, the minimum wage in Saskatchewan is scheduled to increase from $14 per hour to $15 per hour on October 1, 2024. In New Brunswick, the minimum wage rate will be adjusted according to changes in the province’s CPI. In the Northwest Territories, as of September 1, 2023, the minimum wage will be adjusted annually using a formula based on the percentage change in the CPI for Yellowknife and the percentage change in the average hourly wage in the territory for the previous year. In Nova Scotia, the minimum wage will be increased annually based on the national CPI, plus an additional 1%, effective April 1, 2024, and now sits at $15.20 per hour.

To see how the minimum wage rate has changed over time, The Government of Canada maintains a “General Hourly Minimum Wage Rates in Canada since 1965” online database. For example, the federal minimum wage rate was $1.25 in 1965. At that time, the weekly wage for men averaged $99.38 and for women averaged $54.85. Using Canadian Housing Statistics from 1963, the average cost of a single -detached home was approximately $16,000. The federal minimum wage then rose to $4 per hour by 1986 and stayed there for about a decade, falling behind provincial minimum wage rates that averaged about $5.95 per hour.

The federal minimum wage is currently set at $17.30 per hour, as of April 1, 2024, and provides the baseline for which an employee should be paid. If a province or territory’s minimum wage is higher than the federal minimum wage, for example British Columbia ($17.40 starting June 1, 2024) or Yukon ($17.59), the employer is required to pay the higher minimum wage.

The federal minimum wage only applies to employees working in federally-regulated industries: such as:

• Banks
• Postal services and other Crown corporations
• Air transportation (airlines, airports, etc.)
• First Nations band councils and Indigenous self-governments
• Port services
• Radio and television broadcasting
• Telecommunications
• Road transportation services and railways
• Federal public service and Parliament.

For most other workers, the provincial minimum wage applies. However, there are some exceptions. For example, in Ontario, the following employment situations are not covered by the Employment Standards Act (ESA) that regulates minimum wages in the province:

• Students whose employment is facilitated under a program run by a university/college of applied arts and technology
• Secondary school students enrolled in a work experience program
• Employees involved in community participation work
• Police officers
• People performing work as part of a sentence or court order
• Inmates engaged in a work or rehabilitation program
• People holding judicial, political, religious or electee trade union offices
• Junior ice hockey players with certain conditions related to scholarships

Current General Minimum Wage Rates in Canada By Province

Each province has its own employment standard and rules around minimum wage, listed here:

• Alberta
• British Columbia
• Manitoba
• New Brunswick
• Newfoundland and Labrador
• Northwest Territories
• Nova Scotia
• Nunuvut
• Ontario
• Prince Edward Island
• Quebec
• Saskatchewan
• Yukon

Special Minimum Wage Rates

While the minimum wage provides a baseline for what workers should be paid, according to their province and industry, there are also special minimum wage rates according to age and occupation that differ between the provinces.

For example, students under 18 employed up to 28 hours per week in Alberta earn $13 per hour minimum wage, while students under 18 in Ontario earn $15.60 per hour.

Here’s a list of current and forthcoming minimum wage rates in Canada for young workers and specific occupations:

Unless otherwise specified, minimum wage rates for young workers are the same for adult workers.

While the minimum wage is set by provincial and territorial governments, minimum wage is not a living wage. A living wage, according to the Ontario Living Wage Network (OLWN), is the “hourly wage a worker needs to earn to cover their basic expenses and participate in their community.” The living wage accounts for expenses related to food, clothing, shelter, childcare, transportation, medical expenses, recreation and a modest vacation.

Proponents of a living wage argue that workers making minimum wage often have to deal with long hours and two or three jobs just to pay for basic necessities, such as rent and food. This leads to spiralling debt, anxiety and long-term health issues. The living wage rate differs regionally based on local costs for essentials such as food, shelter and child care. According to the Calculating Ontario’s Living Wages 2023 report from the OLWN, living wages in Ontario range from $18.65 in the southwest region to $25.05 in the GTA, significantly higher than the provincial minimum wage of $16.55.

“There is still no place in the province where someone could make ends meet working full-time at this wage,” notes the report’s author Anne Coleman.

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In a 2022 study released by the Canadian Centre for Policy Alternatives, authors David Macdonald and Ricardo Tranjan concluded that the rental wage, defined as the hourly wage required to afford rent while working at a standard 40-hour week, is “considerably higher than minimum wage in every single province,” including the provinces with the highest minimum wage in Canada, namely B.C., Alberta and Ontario. For example, while the minimum wage in B.C. was then $15.65 per hour (now $16.75 per hour), the authors calculated that the one-bedroom rental wage was $27.54 and the two-bedroom rental wage was $33.10. The authors cited Vancouver and Toronto as the “worst culprits” noting that even two full-time minimum wage workers cannot afford a one-bedroom unit without spending more than 30% of their combined income on housing.

Universal basic income, also known as guaranteed livable basic income (GLBI), is defined as a payment to eligible couples or individuals that ensures a minimum income level, regardless of employment status, income level or need. A basic income pilot project was launched in 2017 in Hamilton, Thunder Bay and Lindsay, Ontario, by then-Premier Kathleen Wynne, giving eligible recipients up to $17,000 per year over three years. The program was axed in 2018 when Doug Ford took over as premier.

The Standing Senate Committee on National Finance is currently reviewing Bill S-233 that proposes a national framework for a guaranteed livable basic income. Research suggests that the benefits to recipients of these programs include improved food security, health outcomes, housing stability and mental health.

Minimum wage policy discussions will likely always be a hot-button topic as they relate to people’s abilities to afford essential needs and basic necessities of life, such as housing and food. It’s a nuanced issue with many different contributing factors and considerations. Still, understanding the basics of minimum wage is the first step.