Ontario minimum wage just increased by 35 cents, but advocates say it's not enough

Minimum wage to increase from $17.60 to $17.95 an hour as of Oct. 1

The Ontario government is increasing the minimum wage from $17.60 to $17.95 an hour on Thursday, but advocates say the 35-cent increase is not enough.

In a news release Thursday, the government said the increase is tied to Ontario’s consumer price index (CPI), now at 1.9 per cent, and the amount will benefit more than 700,000 workers across the province. A worker earning minimum wage 40 hours per week will see an annual pay increase of about $728, the government said.

Under the Employment Standards Act, the minimum wage is "adjusted" every year on Oct. 1 to reflect changes in the CPI.

"As families and workers face higher costs and businesses navigate changing trade environments, today’s minimum wage increase will help workers keep pace with global economic uncertainty while maintaining a predictable approach that businesses can plan for," said Labour Minister Trevor Jones in the release.

Living wages needed to make ends meet

Anne Coleman, executive director of the Ontario Living Wage Network, a non-profit organization, said the minimum wage increase is welcome but it's "really not enough" to ensure that workers are able to pay their bills.

Coleman said the current living wage in the Greater Toronto Area is $27.20 an hour, which is $9.25 higher than the new minimum wage that took effect Thursday.

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The network determines what it calls "living wages" for Ontario communities using calculations that are based on real costs in those areas. According to the network, in order for workers to pay their bills, to make ends meet, they need to be earning at least the living wage.

"We find that two of the biggest costs in the living wage calculations are the cost of rent and the cost of food, and both of those expenses tend to increase at a higher rate than just general inflation," Coleman said.

"So when we're looking at a general increase, we're really not quite keeping up with the biggest expenses that a worker would have within the year."

Coleman said the current minimum wage means people will lean more heavily on social services and community organizations and that includes going to food banks.

"We're seeing increased costs right across the board, and I certainly know that many more people in Ontario are facing food insecurity, that they are struggling to make tough decisions about what bills to pay, whether they should purchase healthy food or buy a transit pass to get to and from work," she said.

"They're really having to make those difficult decisions. They're also spending more time at work, oftentimes cobbling together multiple part-time minimum wage jobs just to try and stay on top of expenses."

In a statement, the Ontario NDP called the province to outline a path to raising Ontario's minimum wage to $20 an hour.

"In Ontario, a full-time job should be a pathway to stability, not poverty," said University–Rosedale MPP Jessica Bell in the statement. "The people stocking our shelves, caring for seniors, serving customers, cleaning workplaces, and delivering goods should be paid a living wage for their hard work."

Workers across province are struggling, advocate says

Deena Ladd, executive director of the Workers' Action Centre, a Toronto-based organization that provides supports and services to workers that are non-unionized in Ontario, said workers across the province are struggling.

Ladd said the increase is a "travesty," given the high cost of food, transportation, gas and shelter in Ontario, and that these expenses are making living in the province "absolutely unaffordable."

"Just even a two-bedroom apartment in this province costs over $2,100," she said. "A 35-cent increase is absolutely not going to address this reality."

Ladd said the province needs to realize that affordability is a crisis in Ontario. She said the centre has been calling for a higher minimum wage for a long time. She said the centre first called for a $20 minimum wage in 2021.

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"The tariffs, the high gas prices, the high food prices, the unaffordability of housing is a crisis for working people. And so they can't just expect people to survive on a 35-cent increase," she said.

"They need to do a significant boost to that wage, which will not only benefit workers, but will benefit small businesses as well, who will actually have people in their communities that will have more money in their pockets to spend."

Ladd said minimum wage workers have to make "horrific choices" to put a roof over their heads. Food comes next, then transportation, then medicine, she said.

"That's why it's really important to have a ground floor of a minimum wage that can support workers no matter where they live, no matter where they work," she said.

There's no magic number: economist

Amy Peng, a professor of economics at Toronto Metropolitan University, said there are many factors that go into the government's decision-making on minimum wage.

"There's really no magic number for how high the minimum wage can go," she said. "What matters is how high it is relative to the prevailing wages and how quickly it increases, and the stress on the labour market."

Peng said a sudden minimum wage hike can have negative consequences for employers, workers and consumers.

"The employer ... can hire less people, they can offer workers less hours, there may be higher prices for consumers or they may turn to automation," she said.

With files from Amy van den Berg