What employers and employees think of NWT’s minimum wage formula

When it comes to how the NWT determines the minimum wage, employers and employees disagree on what should be most important.

In 2024, the NWT government raised the minimum wage from $16.05 to $16.70.

It released a report summarizing findings from a public survey on that increase earlier this week.

According to that report, 250 people completed the survey including 210 employees, 29 employers and 11 people who identified as “other.” The NWT government cautioned that, due to the small number of respondents, the results of the survey are not statistically representative of the territory’s population, but said they do still offer meaningful insight.

The report states that 77.6 percent of all survey respondents thought the 2024 increase to the NWT’s minimum wage was too low.

Among the 29 employers that responded however, nearly 35 percent said they felt the increase was too high while more than 41 percent said it was suitable and 24 percent said it was too low.

Of employers who said they employ minimum wage workers – which accounted for half of all employer respondents – 50 percent said they thought the increase was too high and nearly 36 percent said it was suitable.

Determining the minimum wage

Since 2022, the territorial government has increased the minimum wage on September 1 each year using a formula based on the percentage change in the consumer price index for Yellowknife and the average hourly wage from the previous year.

It said the formula aims to keep up with cost increases and the minimum wage in other jurisdictions as well as help businesses prepare for wage raises.

The report says that more than 66 percent of all survey respondents agreed that the NWT’s minimum wage should be adjusted annually based on statistical indicators such as the consumer price index.

Among just employers who responded to the survey, however, 62 percent disagreed with the use of annual formula-based adjustments while nearly 72 percent of minimum wage employers disagreed.

Considering factors that should be considered in setting the minimum wage, employees ranked changes to the cost of living as the most important followed by having higher wages for employees.

Employers chose the impact of increased costs on employers as the most important factor followed by cost of living changes.

High cost of living in the North

In the comments section of the survey, the report says many employees emphasized the high cost of living in the North while several said minimum wage should be a living wage and some said the minimum wage is keeping people in poverty.

Social justice coalition Alternatives North estimated in 2022 that the living wage for a parent in a family of four that year was $23.28 an hour in Yellowknife, $21.32 in Hay River, $22.59 in Inuvik, and $17.81 in Fort Smith.

Some survey respondents said that, to earn more, employees need to get training or education. Others said they felt that minimum wage increases only benefit youth who live at home.

Some employers who responded to the survey said the NWT is an expensive place to operate and those costs go up when the minimum wage is increased. They expressed concern that minimum wage raises could result in job losses, reduced hours for employees and increased costs to the public.

Respondents said the NWT should implement other changes to help with affordability including rent caps and lower payroll taxes as well as addressing the housing crisis, accessability challenges and high power rates.

According to the Retail Council of Canada, the hourly minimum wage across Canada as of June 1 was:

• $19 in Nunavut
• $17.94 in Yukon
• $17.85 in British Columbia
• $17.20 in Ontario
• $16.70 in Northwest Territories
• $16.10 in Quebec
• $16 in Prince Edward Island
• $16 in Newfoundland and Labrador
• $15.80 in Manitoba
• $15.70 in Nova Scotia
• $15.65 in New Brunswick
• $15 in Alberta
• $15 in Saskatchewan

The NWT government announced earlier this week that it is raising minimum wage by 25 cents, to $16.95 per hour, effective September 1. It said it plans to release a survey seeking public feedback on that increase following the change.