Ontario minimum wage going up on October 1
· Toronto Sun
OTTAWA — Ontario’s minimum wage earners are set to get another pay bump this fall.
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On Wednesday, Labour Minister David Piccini announced the province’s annual minimum wage hike will indeed go ahead on Oct. 1, increasing by 35 cents to $17.95 per hour.
This, the minister said, will bring a raise to more than 700,000 workers across Ontario.
“Ontario workers are the engine of this province,” Piccini said in a statement.
“By raising the minimum wage to one of the highest in Canada, our government is putting more money in the pockets of Ontario workers, supporting families through economic uncertainty and giving businesses the stability and predictability they need to plan and grow.”
Minimum wage tied to cost-of-living index
Ontario’s announcement comes roughly a week after the federal government increased the federal minimum wage to $18.15 per hour , applicable to workers in federally regulated industries such as transportation, banking and telecom.
Ontario’s minimum wage is based on the province’s Consumer Price Index (CPI) — a weighted measure of the changes in price over time of a “basket” of goods and services purchased by typical households, which is used to gauge the current cost-of-living.
Between 1996 and 2003, minimum wage was frozen throughout most of the Mike Harris Progressive Conservative government, with the incoming Dalton McGuinty Liberal government increasing the wage to $10.23.
The global financial crisis saw Ontario freeze minimum wage at that rate until 2014, when the Kathleen Wynne Liberal government tied minimum wage increases to CPI, later controversially hiking the wage from $11.60 to $14.00 in January 2018.
While that wage was set to rise to $15 in 2019, the hike was cancelled by the incoming Doug Ford PC government, which froze wages until CPI-based increases resumed in 2020.
Ontario will be second-highest among provinces
When the October wage hike goes into effect, Ontario will have the second-highest provincial minimum wage in Canada, outside of the territories.
British Columbia’s minimum wage will increase to $18.25 on June 1, the highest in Canada.
Nova Scotia and Prince Edward Island’s $17.00 minimum wages will rank third as of Oct. 1, while Alberta boasts Canada’s lowest minimum wage at $15 per hour, with no planned increases.
Nunavut has Canada’s highest minimum wage at $19.75 per hour, compared to $18.51 in the Yukon and $16.95 in the Northwest Territories.
Rafael Gomez, industrial relations professor at the University of Toronto, said linking automatic wage increases to CPI depoliticizes the minimum wage, but is critical of using CPI as the determining yardstick in wage hikes.
“CPI is a cost of living, and doesn’t really have any connection necessarily to productivity measures, or some way in which the wage could be tired to something that reflects underlying productivity,” he told the Toronto Sun .
Politicizing the minimum wage didn’t fare well for the Wynne government, whose January 2018 decision to hike the minimum wage was seen as an attempt to campaign directly to Ontario’s left-leaning voters and reclaim support lost to the Ontario NDP.
“The Wynne government broke its own commitment to (depoliticization) trying to get re-elected in their last election, which failed spectacularly — the Liberal Party lost party status and Wynne lost her seat,” Gomez said.
“They tried to do an end-run around their own policy and jacked up minimum wages. It didn’t work.”
Consensus suggests that raising minimum wages can have a net negative effect on workers, Gomez said, as raising the lower floor on wages impact the margins of employers, who are often forced to find avenues to absorb the extra labour costs — including cutting service or even jobs.