Ontario Minimum Wage Rises to $17.20: What It Means for Workers and the Cost of Living

October 29, 2024

Ontario’s minimum wage has increased to $17.20 per hour as of Tuesday, marking a 3.9% raise from the previous rate of $16.55. Tied to inflation, this increase brings Ontario’s minimum wage to the second-highest among Canadian provinces, trailing only British Columbia, which offers a rate of $17.40.

Understanding the Annual Impact

For those working 40 hours a week, this wage hike translates to an additional annual income of up to $1,355. According to provincial data, around 935,600 workers in Ontario currently earn at or below the new minimum wage threshold, making this adjustment particularly impactful for many residents.

Changes for Students and Specialized Roles

The wage increase extends beyond general workers. Students under 18 who work 28 hours or less per week (during school terms or breaks) will now earn $16.20 per hour, up from $15.60. Hunting, fishing, and wilderness guides, whose pay is calculated based on blocks of time rather than hourly, will also see increases, now earning $86 for days with less than five consecutive work hours and $172.05 for longer shifts. Additionally, homeworkers, such as call center employees and seamstresses, will receive $18.90 per hour, up from $18.20.

Is $17.20 Enough to Meet Living Costs in Ontario?

Despite the increase, there is concern that $17.20 per hour may not suffice for Ontario’s rising cost of living. Craig Pickthorne, communications coordinator for the Ontario Living Wage Network (OLWN), explains that while the increase is a positive step, it falls short of what is required to live comfortably in Ontario’s most expensive cities.

The OLWN calculates Ontario’s “living wage” based on the income required to cover housing, food, transportation, and other essentials. In 2023, the network reported that a living wage in Toronto would need to be $25.05 per hour, leaving minimum wage earners in the city roughly $7.85 short per hour. This gap can amount to a weekly shortfall of over $270, which forces many Ontarians into difficult financial decisions, such as choosing between paying rent and buying food.

Wider Concerns About the Cost of Living

Organizations like the Canadian Centre for Policy Alternatives (CCPA) have echoed these concerns, emphasizing the financial strain on renters. In 2023, the CCPA’s “rental wage” study determined that Torontonians need to earn $33.62 per hour for a one-bedroom apartment and $40.03 for a two-bedroom to afford rent on a 40-hour work week while keeping housing costs under 30% of gross income.

With Ontario’s cost of living on the rise, the OLWN anticipates that its 2024 living wage data, expected later this year, will reveal an even greater wage gap.

Balancing Minimum Wage with Affordability

While Ontario’s latest minimum wage increase is a significant step, advocates argue that policymakers need to address the affordability crisis more comprehensively. By moving toward a wage closer to a living wage, Ontario could reduce financial stress for its workers and create a more sustainable path to affordability across the province.