The Government of the Northwest Territories (GNWT) will be, effective Sept. 1, 2023, changing the way it calculates and adjusts the territory’s minimum wage.
“The minimum wage will be adjusted annually using a formula based on the percentage change in the Consumer Price Index (CPI) for Yellowknife and the percentage change in the average hourly wage (AHW) in the Northwest Territories (NWT) for the preceding calendar year,” reads the GNWT’s notice.
After the change occurs, it will move forward annually unless otherwise directed by the minister of Education, Culture and Employment (ECE).
“Using CPI … allows the minimum wage to keep up with the increasing costs for NWT residents, and with other jurisdictions’ minimum wage rates,” continues the notice.
The GNWT also states that businesses will be able to “plan for the minimum wage rate to be adjusted on September 1st each year, and the annual increases will be smaller, which will allow businesses to better absorb the impact of each increase.”
The new adjusted rate will be announced the ECE by Aug. 1 each year.
Following the GNWT’s announcement, its decision to change how the minimum wage is calculated and adjusted garnered a response from the NWT Chamber of Commerce.
“By removing public oversight into its minimum wage policy, the territorial government has taken full control over future increases to the minimum wage, usurping its responsibility to be accountable to taxpayers and going back on pledges to be transparent,” reads the NWT Chamber of Commerce’s notice.
“It seems the GNWT believes it will be able to fend off political and public blowback to future hikes to the NWT’s minimum wage by blaming it on a nebulous “formula,” the notice continues.
The NWT Chamber of Commerce continued by saying that the “calculation, as presented, is not clear and unknown.“
“The NWT is already among the highest-cost jurisdictions for doing business, with some of the highest wages in [the] country,” said Yanik D’Aigle, NWT Chamber president. “What everyone has to realize is that increases to the minimum wage can have an upwards ripple effect on most other wages, forcing employers to make some tough decisions. While there are relatively few full-time workers earning only the minimum wage, if those few hundred people receive, let’s say, an eight-per-cent hike one year, employers could be pressed to provide that kind of raise upwards throughout other job classifications in a company.”
The notice continues by pointing out that while the ripple effect of increased wages could occur, other aspects such as increased cost of living and doing business in the North can “accelerate already present, inflationary pressures, especially when implemented via automatic formula and without consultation.”
The Chamber recommended to have stakeholders across the territory continue to provide input and recommendations to the minister.
Furthermore, the NWT Chamber also noted an appeal that occurred in the Legislative Assembly around one decade ago to adjust the minimum wage rate through a formula based on the Consumer Price Index.
The appeal was researched by Employment department staff and rejected in favour of establishing the Minimum Wage Committee.
“Why is the GNWT taking this step at this time? It just doesn’t make sense, as it just throws another negative variable into the mix for the existing and future business community,” said D’Aigle.