Starting in 2023, prices will determine NWT’s minimum wage

A file photo of coinage. Ollie Williams/Cabin Radio

The Northwest Territories will use a new method of calculating the territory’s minimum wage from September next year.

From that point, the minimum wage will be calculated using a formula that combines changes in Yellowknife’s consumer price index with changes in the NWT’s average hourly wage.

In a news release on Tuesday, the NWT government said linking the minimum wage to inflation was an increasingly popular approach across Canada.

In British Columbia, caps on rent increases have been tied to inflation for years. The province similarly decided in March to adjust its minimum wage based on inflation rates.



The new federal minimum wage, introduced last December, is adjusted every April based on consumer price index changes reported by Statistics Canada.

“Using this new formula to calculate the Northwest Territories minimum wage will result in predictable, measurable, and data-driven changes that will provide stability and certainty for the territory’s business community,” said RJ Simpson, the NWT’s employment minister, in a statement.

“Adjusting the minimum wage annually will help us keep up with the cost of living in the NWT.”

The NWT’s legislated minimum wage is currently $15.20 an hour.



Previously, a committee regularly reviewed the territory’s minimum wage and provided recommendations to the minister, resulting in an updated minimum wage every few years. That committee will be dissolved before the new system is introduced.

From 2023, the new minimum wage will be announced on August 1 each year with businesses expected to adopt it by September 1.

The territorial government said tying the minimum wage to inflation is likely to result in an increase each year. However, if a year arises in which applying the formula would result in a decrease, the minimum wage would simply remain unchanged that year.