Question Period Note: IMPLEMENTING A $15 PER HOUR FEDERAL MINIMUM WAGE

When will the new $15 per hour federal minimum wage come into force?

• We established a $15 federal minimum wage, which comes into effect on December 29, 2021.
• This new minimum wage will directly benefit roughly 26,000 employees working in federally regulated workplaces.
• If an employee is employed in a province or territory where the minimum wage is higher, that wage will apply.
• The minimum wage will be adjusted each year on April 1st based on the Consumer Price Index. The first adjustment will take place on April 1st, 2022.
• The COVID-19 pandemic increased the focus on the essential work done by a large proportion of minimum wage-earning workers. Higher wages help build a strong economy and this is especially important as we recover and build back better.

Federal Minimum Wage

• Currently Part III (Labour Standards) of the Canada Labour Code (Code) sets the federal minimum wage as the general minimum wage established by the province in which the employee is usually employed.

• The Budget Implementation Act, 2021, no. 1 (Bill C-30) amended Part III of the Code to establish a freestanding federal minimum wage of $15 per hour, and to ensure that where provincial or territorial minimum wages are higher, that wage will prevail. When the new minimum wage provisions come into force on December 29, 2021, it is expected that about 26,000 employees (or 3 percent of all employees) in the federally regulated private sector across the country will benefit from a raise.

• In addition, to keep pace with inflation, Bill C-30 provided that the minimum wage will be adjusted (rounded up to the nearest $0.05) based on Canada's Consumer Price Index for the preceding calendar year, as published by Statistics Canada. The first adjustment will take place on April 1, 2022 and continue every April 1 thereafter.

Provincial Minimum Wage Systems

• Minimum hourly wage rates: Provincial and territorial employment standards laws establish general minimum wage rates, as well as minimum wage rates specific to certain categories of employees. Currently, the highest provincial/territorial rate is in Nunavut at $16 per hour and the lowest is in New Brunswick at $11.75 per hour.

• Minimum wage setting mechanisms: The majority of provinces and territories automatically adjust their minimum wage based on indexing formulae. Alberta, British Columbia, Northwest Territories, Nunavut, Prince Edward Island and Quebec are the only jurisdictions that do not annually index their minimum wage rates to the Consumer Price Index.

Expert Panel on Modern Federal Labour Standards

• In February 2019, the then Minister of Employment, Workforce Development and Labour created an independent expert panel to study, consult and provide advice on many issues, including whether a freestanding federal minimum wage should be instituted.

• In its report, submitted to the Minister in June 2019 and publicly released the following December, the Panel recommended that a freestanding federal minimum wage be established and be adjusted annually.

 
Stakeholders’ reactions

• There have been calls over the past several years for the federal government to establish a uniform, freestanding federal minimum wage including the 2006 Fairness at Work report from the Arthurs Commission that undertook a comprehensive review of Part III of the Code, and from a number of campaigns to raise minimum wage (e.g. Fight for $15 and Fairness).

• Unions and labour groups have indicated their support numerous times for a federal minimum wage of $15 per hour, indexed to inflation. They contend that a freestanding federal minimum wage would remove unfairness and inequality among federally-regulated private sector workers who earn different minimum wage rates based on the province or territory in which they work. Many workers and unions have also promoted a federal minimum wage as an anti-poverty measure, arguing that a $15 federal minimum wage could improve the lives of vulnerable workers, increase employment stability, reduce turnover and decrease the gender pay gap.

• Conversely, employers and employer organizations have voiced concern that re-establishing a common minimum wage for employees in the among federally-regulated private sector would run counter to the recent practice of provinces and territories assessing the appropriate level for the minimum wage in their respective jurisdictions based on local labour market conditions, cost of living, etc. They have also argued that it would create competition for labour between the federally and provincially/territorially regulated sectors and, as a result, inflationary wage pressures.

• Current hourly minimum wages in the provinces and the territories:
- Alberta – $15.00
- British Columbia – $15.20
- Manitoba – $11.95
- New Brunswick – $11.75
- Newfoundland and Labrador – $12.50
- Northwest Territories – $15.20 - Nova Scotia – $12.95
- Nunavut – $16.00
- Ontario – $14.35
- Prince Edward Island – $13.00
- Quebec – $13.50
- Saskatchewan – $11.81
- Yukon – $15.20