The minimum wage is increasing in Ontario this year, again, to $17.20 from $16.65, starting on Oct. 1, 2024.
But according to a report by the Ontario Living Wage Network, the living wage for the Greater Toronto Area is at $25.05 as of November 2023.
The lowest living wage in Ontario is recorded as $18.65, in Southwest Ontario, the report said.
The minimum wage increase is still not within a dollar of any living wage.
“The living wage is calculated based on the needs of a family of four with two parents each working full-time, full-year,” the Ontario Living Wage Network reported.
There are 107 certified living wage employers in Toronto, according to the network. “The living wage reflects what people need to earn to cover the actual costs of living in their community.”
The Ontario government said in an email to Humber News that the 2024 wage increase would support Canadian families and provide additional support to Canadian homes.
The statement said the announcement was made six months in advance to provide certainty and predictability and to offset the rising cost of living to keep Ontario the best place to live, work, and raise a family.
Ontario made the official announcement on March 28, reporting the increase would support workers in Ontario with added protection as well.
The government said along with the increase there will be additions to the Working for Workers Four Act, 2024 through, “strengthening wage protections for restaurant, hospitality and service workers by clarifying that employers can never deduct an employee’s wages in the event of a dine and dash, supporting injured workers and banning requirements for Canadian work experience in job postings.”
This increase is based on the rise in Consumer Price Index (CPI) to 3.9 per cent in 2023, Ontario said in the announcement.
“Under the Employment Standards Act, Ontario’s minimum wage increases annually based on the Ontario Consumer Price Index (CPI),” Ontario said.
This rise in the 2023 CPI follows a record-breaking rise in 2022, of 6.8 per cent. Although there was a decrease from 2022, the overall increase in the CPI in 2023 is considered high, according to StatCan.
“Annual average prices rose in all provinces in 2023, but at a slower pace than in 2022,” StatCan said.
The Bank of Canada released a study in 2018 on the impact of the increase in minimum wage in Canada reporting that with the rise in minimum wage comes a rise in CPI.
“Since a higher minimum wage raises production costs for firms, it is likely that part of the increase will be passed on to consumers,” the report said. “The extent of this pass-through, however, depends on firms’ ability to substitute away from the higher-cost labour inputs and preserve their margins, as well as the competitive landscape they face.”
The Bank of Canada also reported that with the rise in minimum wage comes a loss of employment.
“Traditional competitive models suggest that an increase in a binding minimum wage will reduce employment, as firms substitute toward other inputs, such as capital or, perhaps, other more productive labour,” the report said.
Ontario will determine next year if there will be another increase in the minimum wage.