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

Why is the Government proposing to implement a $15 per hour federal minimum wage?

• Canada’s prosperity and stability depend on every Canadian having a fair chance to join the middle class. Yet some Canadians struggle to do so in part-time, temporary and low-wage jobs - often working several jobs to make ends meet.

• The COVID-19 pandemic has also increased focus on the essential work done by a large proportion of minimum wage-earning workers.

• To support low-wage workers in the federally regulated private sector, Budget 2021 announced our intention to introduce legislation that will establish:
o a federal minimum wage of $15 per hour;
o rising with inflation; and
o with provisions to ensure that where provincial or territorial minimum wages are higher, that wage will prevail.

• This will directly benefit over 26,000 workers who currently make less than $15 per hour in the federally regulated private sector.

Federal Minimum Wage

• The mandate letter of the Minister of Labour includes a commitment to raise the federal minimum wage to at least $15 per hour.

• 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.

• Budget 2021 proposes to introduce legislation that will establish a federal minimum wage of $15 per hour, rising with inflation, with provisions to ensure that where provincial or territorial minimum wages are higher, that wage will prevail.

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 Saskatchewan at $11.45 per hour.

• Minimum wage setting mechanisms: There is a trend across Canada towards automatic adjustments to the minimum wage based on indexing formulae. Alberta, British Columbia, Northwest Territories and Quebec are the only jurisdictions that do not annually index their minimum wage rates to the Consumer Price Index (CPI).

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 – $14.60
- Manitoba – $11.90
- New Brunswick – $11.75
- Newfoundland and Labrador – $12.50
- Northwest Territories – $13.46 - Nova Scotia – $12.95
- Nunavut – $16.00
- Ontario – $14.25
- Prince Edward Island – $13.00
- Quebec – $13.10
- Saskatchewan – $11.45
- Yukon – $13.85