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Economy

NWT government not revealing how it reached new minimum wage


The minister responsible for increasing the NWT’s minimum wage to $15.20 from this fall says he won’t reveal the research that went into the decision.

September 1’s increase from $13.46 to $15.20 per hour will give the territory the second-highest minimum wage in Canada. The move has been criticized both by labour advocates – who fear the increase is too little – and by the business sector, which claims it is too high.

RJ Simpson, the NWT’s employment minister, said he would not make public the report of a committee struck to advise the minister on the decision. That committee provided three options to the minister.

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Simpson said the committee included “representatives from industry, labour, and non-governmental organizations” but did not specify who those people were.

Asked in the legislature by Frame Lake MLA Kevin O’Reilly to share the report prepared by that committee, Simpson replied: “This report was prepared as advice for cabinet and it was prepared by people who were assured that it would be kept confidential. I am not prepared to go back on that.”

O’Reilly then asked Simpson to outline the three options in the report. Simpson said one of the options was preserving the status quo – $13.46 an hour – and one was the increase to $15.20. He did not identify the third recommendation, which remains a mystery.

“I guess I have to guess what the third recommendation was,” O’Reilly replied.

“We have the wage top-up program ending on August 31, as I understand it, so $18 an hour. The very next day, people are going to see their hourly wages drop to $15.20. It just does not seem to make any sense … can [Simpson] explain why their wages are going to drop from $18 an hour one day to $15.20 the next?”

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The minister said fewer than 1,000 people in the NWT made the minimum wage and most were young people living at home, meaning they were “not a demographic of people who are counting on a minimum wage to raise a family for the most part.”

Simpson added: “A lot of those positions, as well, come with gratuities, so a number of those people making minimum wage also make tips on top of it.”

He said businesses could not be expect to absorb an increase from $13.46 to $18 per hour over the course of one summer.

“It’s just not feasible. It’s not the way businesses are structured right now,” said the minister.

However, that being said, we have the second highest minimum wage in Canada. We will on September 1. I think that’s something to be celebrated. I don’t think we’ve ever been in that position before.”

When the NWT moved to a minimum wage of $13.46 per hour, in 2018, that was at the time the third-highest minimum wage in Canada.

Despite Simpson’s concern about the fortunes of small businesses, the Yellowknife Chamber of Commerce suggested even the $15.20 coming into force in September was a step too far.

Tim Syer, the chamber’s president, said on Twitter: “A higher minimum wage doesn’t necessarily equal higher pay. At the margins, you’re also going to see few hours offered and fewer hires. Employers will also have to pass some or all of the increase on to consumers.”

Syer, who said the chamber had not been consulted on the increase and was not aware of who sat on the committee, said “hundreds of businesses” would be affected and the result would be a higher cost of living.

He called on the territory to use other measures instead of an increased minimum wage, such as “a comprehensive and effective housing plan” or addressing high energy costs.

Simpson, though, said his government was focused on improving education for northern youth as a means of lifting people beyond the minimum wage.

“That is the biggest contributor to improving your wages, getting a post-secondary education. That’s where we need to focus our efforts, not putting this on the backs of businesses,” the minister said.

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