Five provinces increase minimum wage, but some worry it may not have the ‘intended effect’

Maria Sarrouh reports on how recent minimum wage increases are affecting jobs and the cost of living across five provinces.

As living costs climb, five provinces raised minimum wage on Wednesday.

From Saskatchewan to P.E.I., new legal hourly rates are now in place. At Charlottetown Bakery and Cafe, owners say it will add some payroll pressure.

“Instead of hiring more people, we will give more wages, more hours to our permanent employees,” said co-owner Amardeep Singh.

Singh runs the store with Harpreet Kaur, both engineers-turned-bakers. While Kaur takes care of the recipes, products and ingredients, Singh manages the front office and marketing.

It’s peak season for them, with Thanksgiving and Diwali around the corner, Halloween shortly after, and then Christmas.

Two of their employees make minimum wage, but Singh says all will get raises, adding he estimates the increases will cost the business around $2,500 annually. That means, eventually, prices will go up.

“Not now, but during Christmas time, we will pass a little bit on our product because we need to make money,” he said.

What changed

Prince Edward Island

New rate: $16.50 per hour, up 50 cents from $16.00

Nova Scotia

New rate: $16.50 per hour, up 80 cents from $15.70

Note: This is the second hike in 2025. The rate was previously raised to $15.70 from $15.20 on April 1.

Ontario

New rate: $17.60 per hour, up 40 cents from $17.20

Saskatchewan

New rate: $15.35 per hour, up 35 cents from $15.00

Manitoba

New rate: $16.00 per hour, up 20 cents from $15.80

What didn’t change

British Columbia, Quebec, New Brunswick and Newfoundland and Labrador all raised minimum wage earlier this year.

Alberta is sticking with $15, now the lowest rate in the country.

While the wage increases are welcome, there is still a gap between the new numbers and what it takes to keep food on the table and the lights on, says Christine Saulnier, the Nova Scotia director at the Canadian Centre for Policy Alternatives.

“We have so many workers who are struggling,” she said.

The research institute’s latest living wages report, released in September, suggests $22.77 is what P.E.I. residents need to make ends meet, meaning the new minimum wage falls short by around $6. And that’s the case in Nova Scotia too, where the difference is deeper at just over $11.

Those are conservative estimates, Saulnier says, explaining the benefit of raising the bottom floor of the labour force.

“What we know about minimum wage workers is they are using every dollar that they have in their communities, at those same businesses that are employing those same workers,” she added. “When we look at what impact that has more broadly in the economy, it’s really important.”

Increase won’t have ‘intended effect’: small business group

But some business experts say there are better ways to address the cost-of-living crisis.

“What we find is that increasing minimum wage is usually a blunt weapon that is very popular, (and) on the surface looks really good,” said Frederic Gionet, Atlantic director at the Canadian Federation of Independent Business. “But in fact, it doesn’t really have the intended effect of helping reduce poverty.”

He says that raising minimum wage can have unintended consequences. For example, 60 per cent of CFIB’s small business employers say it puts them in a position to raise all workers’ wages, which may translate to higher prices.

“It’s inflationary… it’s a perpetual race for the top that never really seems to be anchored in any kind of economic reality,” he said. “So you know, employers are feeling that it’s just increasing their costs.”

What the experts agree on is that minimum wage is just one factor in the formula. Reductions in income taxes, for example, offer relief.

Saulnier says P.E.I. is on the right track.

“You have affordable childcare that’s more available to more families. You have investments in public transit and transportation,” she said.

A spokesperson for P.E.I.’s workforce department told CTV News another wage increase will take effect next April, bringing the minimum to $17.

“During a period of significant economic uncertainty, the decision was made with careful consideration,” the spokesperson said.

Back at Charlottetown Bakery and Cafe, employee Manpreet Kaur says the change will have a positive impact.

“At the grocery store, it’s very expensive. Milk, bread, vegetables, chicken,” she said. “I’m glad I can get more money.”