Holt Liberals rethinking New Brunswick’s minimum

Holt Liberals rethinking New Brunswick’s minimum-wage formula

Minister says linking annual increases to inflation could change, depending on consultations

The Holt government is reviewing New Brunswick’s minimum-wage law, including whether to stick with the existing formula for increases that the labour minister calls “simple and easy to apply.”

The province is asking for public input on whether the existing system of annual increases, indexed to changes in the consumer price index, makes sense or should be changed.

The wage, $15.90 today, is the third lowest in Canada. Annual increases have been linked to the index, a common measure of inflation, since 2019.

“The cost of living change was done as a holding pattern, so you didn’t have to do an in-depth study every year,” Labour Minister Alyson Townsend said.

“But you have to do an in-depth study periodically to make sure you’re getting it right with the cost of living.”

Opting for a different formula than inflation “may be quite likely. It really depends on what we hear back during this consultation.”

The link to the inflation rate has made the increases easy to plan for, Townsend said.

“People don’t like surprises on things like that.”

Prior to the indexing, the minimum wage was often the subject of political debate about whether it should rise and by how much.

The Gallant Liberals promised in the 2014 election campaign to raise it to $11 per hour by 2017, then delayed that for three months after the three Maritime provinces agreed to synchronize increases on April 1 of each year.

The Liberals then promised the first inflation-indexed increase would happen the following year. It did not happen until 2019.

Townsend said she does not want to return to that kind of haphazard system.

What does it cost to live? N.B. reviews minimum wage

“I can’t imagine that we will go back to something that we already determined was likely broken, but we want to be fair in our analysis of it, because it may not always be [based on] cost of living.”

Employers say increases are still subject to the whims of politicians.

In 2022, the Higgs government legislated two special increases of one dollar each to keep pace with rapid price increases and with other provinces in the region.

The Canadian Federation of Independent Business says it would like to see the wage calculated as a percentage of the province’s median wage, which is determined by the labour market, rather than indexed to the consumer price index.

But it says whatever formula the province settles on should be the sole factor, with no extra increases that depart from the plan.

“There's a lot of incentive for governments to go beyond that and go around their own rules,” said Frédéric Gionet, the federation’s director for Atlantic Canada.

“So that's why we believe that there should be more of a hands-off approach and have a formula that works on its own.”

The province estimates that five per cent of workers in the province were paid the minimum wage in 2025. More than a third of those earning it were younger than 19.

According to the province’s discussion paper for the review, the consumer price index rose 1.7 per cent in New Brunswick in 2025.

The cost of three basic necessities grew at a faster rate, though: food and health and personal care grew at 3.1 per cent, while the cost of shelter increased by 2.4 per cent.

The Saint John-based Human Development Council estimates that New Brunswick’s living wage — what it considers the true rate needed to cover basic necessities — was $24.77 last year.

Tobin LeBlanc Haley, a University of New Brunswick associate professor who researches housing, poverty and social policy, says the minimum wage should increase at a rate faster than inflation to close the gap with the living wage.

“We know that more and more folks are relying on food banks as the cost of groceries go up, we know that housing costs are getting more expensive, we know utilities are getting more expensive,” she said.

The consumer price index “is insufficient to reflect a really dramatic increase in the cost of basic necessities.”

The discussion paper notes that the minimum wage is “not meant to be the only tool” for addressing poverty.

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Gionet said the Canadian Federation of Independent Business would like the government to “disassociate” the affordability challenge from the economic question of wages.

“Maybe those are two solutions that should be dealt with somewhat separately, as opposed to lumping it all into a simple solution that you increase minimum wage and you kind of forget about it.”

LeBlanc Haley said given the province’s projected $1.39 billion deficit, and the resulting unlikelihood new social programs will be created, the minimum wage should be used more to address affordability.

This isn’t the first review since the 2019 indexation, but Townsend said every so often the issue requires “a deeper dive. … This is the first big one in ten years.”

Aside from a promise to improve health care, Premier Susan Holt made affordability the centrepiece of her 2024 election campaign.

Townsend said that makes the review important.

“It is sensitive. There is no doubt. But it’s also crucial. To some people it will matter a great deal. Those people are not simply the employees. They’re also the employers. My job as minister labour is to try to balance those two interests.”

The consultation will run until early October.

The minister said she hopes any changes can be decided and put in place before the next scheduled minimum wage increase on April 1, 2027.

“I would just encourage everybody to talk to us, send us your thoughts, because we really do want to hear them,” she said.

Jacques Poitras has been CBC's provincial affairs reporter in New Brunswick since 2000. He grew up in Moncton and covered Parliament in Ottawa for the New Brunswick Telegraph-Journal. He has reported on every New Brunswick election since 1995 and won awards from the Radio Television Digital News Association, the National Newspaper Awards and Amnesty International. He is also the author of five non-fiction books about New Brunswick politics and history.