The Government of Canada announced an increase of 55 cents in the federal minimum wage from April 1, 2022. The minimum wage which was set at $15.00 per hour previously will rise to $15.55 per hour.
The federal minimum wage came into force on December 29, 2021. It may increase on April 1st every year to keep up with inflation. Increases in the federal minimum wage are calculated using the Consumer Price Index for the previous calendar year, as reported by Statistics Canada.
The Consumer Price Index (CPI) measures price changes as they affect Canadian consumers. It compares the cost of a fixed basket of goods and services over time to measure price change.
The CPI basket of goods and services is divided into eight primary components: Food; Shelter; Domestic operations, furniture and equipment; Clothing and footwear; Transportation; Health and personal care; Recreation, education, and reading; and Alcoholic beverages, tobacco products, and recreational cannabis.
CPI statistics are published at various levels of geography such as Canada, the 10 provinces, Whitehorse, Yellowknife and Iqaluit, and a few other cities.
According to the government, this Year’s increase of 55 cent in the federal minimum wage reflects a 3.4% increase in the annual average CPI of Canada in 2021, according to Statistics Canada.
The increased federal minimum wage only applies to workers and interns in federally regulated private sectors. The provincial minimum wage will apply to employees who are working in other industries that are not regulated by the federal government.
The Canada Labour Code (the Code) regulates the following industries and workplaces as Federally regulated private sectors (parts I, II, III and IV of the Code):
- air transportation, including airlines, airports, aerodromes and aircraft operations
- banks, including authorized foreign banks
- grain elevators, feed and seed mills, feed warehouses and grain-seed cleaning plants
- First Nations band councils and Indigenous self-governments (certain activities)
- most federal Crown corporations, for example, Canada Post Corporation
- port services, marine shipping, ferries, tunnels, canals, bridges and pipelines (oil and gas) that cross international or provincial borders
- postal and courier services
- radio and television broadcasting
- railways that cross provincial or international borders and some short-line railways
road transportation services, including trucks and buses, that cross provincial or international borders - telecommunications, such as, telephone, Internet, telegraph and cable systems
- uranium mining and processing and atomic energy
- any business that is vital, essential or integral to the operation of one of the above activities
There are approximately 18,500 employers in federally regulated industries. The federal Crown corporations together employ 955,000 people which is about 6% of all Canadian employees.
In provinces and territories where the minimum wage is more than the federal rate, the higher wage will apply. Currently, that only applies to Nunavut, which has a $16 per hour minimum wage. Ontario increased its minimum wage to $15 per hour on January 1. Yukon’s minimum wage will increase to $15.70 per hour on April 1.
P.E.I., New Brunswick, Newfoundland and Labrador, and Nova Scotia are among the provinces that will raise minimum wages on April 1. Quebec’s minimum wage will increase to $14.25 on May 1.
However, advocates claim that these increases are insufficient to cover the cost of living in most localities. Working families in Vancouver, Calgary, Toronto, and Ottawa need incomes of at least $20.52 per hour to pay basic necessities, according to Living Wage Canada.
For people employed in minimum-wage jobs trying to support themselves and their families, every dollar makes a difference. Whether it be at the grocery store, in their housing payments or simply making ends meet, affected workers benefit when the minimum wage rises.
Every dollar makes a difference for people employed in minimum-wage jobs trying to support themselves and their families. Affected workers benefit at the grocery store, in their housing payments, or simply making ends meet when the federal minimum wage rises.