The minimum wage in the NWT will increase to $15.20 per hour on Sept. 1, 2021 from the current rate of $13.46 per hour.
Employment Minister R.J. Simpson announced the wage increase in the legislative assembly Thursday.
“(The increase) makes it the second highest minimum wage in Canada behind Nunavut,” said Simpson.
“Since the last increase in 2018 the cost of living and the average hourly wage has risen. This increase ensures that the minimum wage doesn’t fall behind. It brings our minimum to average wage ratio more in line with the rest of Canada and makes us more competitive with our neighbouring jurisdictions.”
He added that the GNWT is aware of the impacts the Covid-19 pandemic has had on employees and businesses.
The increase follows recommendations made by a minimum wage committee made up of non-governmental organizations, industries and GNWT representatives who examine the economic climate of the NWT.
MLAs have over the last several months pressured Simpson to increase the minimum wage, and have cited the wage top-up program as an example of how taxpayers are already subsidizing a minimum wage of $18 per hour.
The program bumps up wages for people earning less than $18 per hour. It was introduced last April and has been extended three times since, mostly recently on March 4.
Ninety-six businesses participate in the program and 2,360 people are benefiting from it, according to the Department of Finance website.
Wages ‘to drop in September’
But Frame Lake MLA Kevin O’Reilly gave a lukewarm response to the news about the scheduled wage raise.
He asked what the recommendations were from the committee, a group he referred to in February as a “mysterious minimum wage committee.”
Simpson responded saying there were three recommendations: that the status quo wage rate continue and that the wage be increased to $15.20 per hour. He didn’t identify the third.
“I guess I’ll have to guess what was the third (recommendation),” O’Reilly said.
“We have the minimum wage top-up program ending on Aug. 31. (People will be earning) $18 per hour and the very next day their wages will drop to $15.20 after the top-up program ends. It just doesn’t seem to make any sense.
“Why did (Simpson) choose $15.20 and can he explain how the wage will drop one day from $18 per hour to $15.20 per hour? What other solutions does he have to help the 2,360 people accessing the top-up program make ends meet?”
High increase ‘too much for businesses’
Simpson said businesses can’t be expected to absorb such a large increase in costs if the wage went from $13.46 to $18 per hour in one summer.
The minister added that just because 2,360 people are utilizing the wage top-up program doesn’t mean they’ll be earning the new minimum wage after the end of the program.
“Those are two different numbers,” he said.
Simpson then touted the efforts of the government to invest in early childhood education, the recently announced review of the NWT education curriculum and the capacity of its Student Financial Assistance program.
“That’s the biggest contributor to improving your wages: getting a post-secondary education. That’s where we need to focus our efforts. Not putting that on the backs of businesses.”