Canada is raising the federal minimum wage to $16.65 next month. Here’s what that means for Ontario

On April 1, Canada is raising the federal minimum wage from $15.55 to $16.65 per hour for workers and interns in federally regulated private sectors.

The pay boost is based on the consumer price index, which rose by 6.8 per cent in 2022.

Ottawa set a federal minimum wage of $15 per hour in 2021. The first increase took place last April and is scheduled to take effect on the same day each year to match the rate of inflation. Food and shelter costs, however, surpassed that rate last year at 11.4 per cent and 7.2 per cent, respectively.

Who will get the increase?

An estimated 26,000 Canadians who earn less than the upcoming rate will be affected, the government said.

Workers earning minimum wage at banks, postal and courier services, as well as international and interprovincial air, rail, road and marine transportation are among those in federally regulated industries that will receive the increase.

Other federally regulated workplaces that are subject to the increase are telecommunications, grain elevators, feed and seed mills and uranium mining. The same is true for certain activities in First Nations band councils, as well as some radio and television broadcasting.

What if the minimum wage in the province or territory is higher?

Employers in provinces and territories where the minimum wage is higher than the federal standard must pay the higher rate.

The Yukon is the only territory or province in Canada that will have a higher minimum wage, with an increase on April 1 set to bolster it to $16.77 per hour from the previous rate of $15.70.

British Columbia has the next highest-paying minimum wage at $15.65, followed by Ontario at $15.50.

How minimum wage has changed in Ontario in recent years

Ontarians last experienced a general minimum wage increase in October 2022, when the rate rose from $15 to $15.50. It had risen to $15 that January.

Doug Ford's Progressive Conservative government introduced the changes after having previously cancelled a minimum-wage increase planned by the former Liberal government under Kathleen Wynne. Originally, the minimum pay was set to increase to $15 per hour in 2019.

There is no minimum wage increase scheduled for the province this year.

Ontario lifted the minimum wage in 2018 and saw employment increase

Although many business lobbyists argued that Ontario raising the minimum wage to $14 in 2018 would be a job killer," employment actually grew and the racialized wage gap narrowed, a report by the Canadian Centre for Policy Alternatives found last year.

At the time, the former Liberal government bumped the minimum wage up from the previous $11.60 per hour.

The change also led to a pay raise for low-income workers who had been earning only slightly more than the minimum wage, between $11.60 and $14 per hour, the data suggests.

Many jobs' wages are set in relation to the minimum wage. For those that wanted to pay a little bit more than minimum wage, they also had to increase their wages to attract more workers," economist Jim Stanford previously told the Star.

The report also found that 70 per cent of minimum-wage workers benefiting from a raise were adults, dispelling the belief that it would be mostly teenagers benefiting from the change.

The cost of living in Ontario is higher than both minimum wages

According to a November 2022 report by the Ontario Living Wage Network, a living wage in Toronto would be $23.15 per hour. In 2021, it was $22.08.

In most other Ontario cities, a living wage in 2022 would have been between $19 and $20, the report found.

Its calculations are based on the costs of basic necessities, such as housing, food, clothing and transportation. The organization also factors in government benefits.

With files from The Canadian Press

Manuela Vega is a Toronto-based staff reporter for the Star's Express Desk. Follow her on Twitter: @_manuelavega