Ontario raising minimum wage October 2024

By Ken Kellar
Staff writer

3.9 percent annualized wage increase will see some workers earn an extra $0.65 per hour

Thousands of workers across Ontario will be taking home more money this fall as Ontario moves to bump the provincial minimum wage.

Announced on Thursday, March 28, 2024 by the Ontario Government, the minimum wage for workers in the province will be increasing from $16.55 per hour to $17.20 per hour, effective October 1, 2024. The government noted that the increase is based on the Ontario Consumer Price Index (CPI) and that the 3.9 percent annualized wage increase ($0.65/hour) will make Ontario’s minimum wage the second highest in Canada, behind British Columbia.

David Piccini, the Minister of Labour, Immigration, Training and Skills Development, said in the government’s release that the announcement coming half a year ahead of the increase is so that businesses aren’t blindsided and can prepare.

“Under the leadership of Premier Ford, our government is helping nearly one million workers earn more money for themselves and their families,” Piccini said.

“We are providing businesses with certainty and predictability by announcing this annual wage increase six months in advance, while also helping families offset the rising cost of living, so that Ontario continues to be the best place to live, work and raise a family.”

According to the province’s release, a worker who is working 40 hours a week at the general minimum wage will see their annual pay increase up to $1,355. The same release states there were 935,600 workers earning at or below $17.20 per hour in 2023.

While the minimum wage increase will make Ontario the second highest minimum wage in the country, there are still those who say it is below where it needs to be for the average Ontarian. The Ontario Living Wage Network (OLWN) is a collective of “employers, employees, non-profits, researchers and proponents of decent work standards for all Ontario workers” who work to advocate for living wages in Ontario by calculating the local living wage rates along with encouraging employers to pay that rate. Their efforts began in the 2010’s as an effort to tackle child poverty by assisting parents who are working but still unable to make ends meet. Since then, the way the OLWN calculates the living wage for a given region has changed, where currently, the local living wage rates are determined by collecting the data of the costs of a basket of basic goods and services for three different types of households, specifically two 35 year old parents with two children aged 7 and 3, a single parent with a 7-year-old child, and one single adult.

“The living wage rate is the before-tax income that each adult would need to have to cover the expenses included in the basket for their family type,” the OLWN states in their November 2023 update.

“The calculation takes into account government transfers the family may receive (like the Canada Child Benefit, the Ontario CARE benefit) and the payroll and income taxes the adults may pay… Next, this county-level data is aggregated to the economic region level using population-weighted averages (e.g. Windsor, Essex, Chatham-Kent, and Lambton County are combined into the Southwest region). An additional 4% is added to this total level of expenses as a contingency measure. Next, the level of earned income, taxes, and transfers that would provide each household with the amount of income needed to cover these expenses is found. To calculate the living wage, we then divide the earned income by 52 weeks in the year and 35 hours per week (and by 2 for families of four) to arrive at an hourly living wage.”

According to the OLWN, the living wage rate for the north of the province has been calculated to be $19.80 per hour, whereas the living wage rate for the Greater Toronto Area is calculated at $25.05, and the living wage rate for the Southwest region of Ontario is $18.65.

The province has been increasing the minimum wage on an annual basis under the Employment Standards Act and is based on the CPI, which is a measure of inflation that represents changes in prices experienced by consumers in the province. The government notes that 35 percent of workers below the current general minimum wage of $17.20 per hour are in retail trade and 24 percent are in accommodation and food services.

The minimum wage increase is part of the province’s Working for Workers Four Act, 2024, which also includes extra protections for workers in the province that include strengthening wage protections for restaurant, hospitality and service workers by “clarifying that employers can never deduct an employee’s wages in the event of a dine and dash, supporting injured workers and banning requirements for Canadian work experience in job postings,” which the government says is a first in Canada.