New Brunswick Government to Increase Minimum Wage to $11.00 / Future Changes Based on Rate of Inflation

The government of New Brunswick announced that it will be raising the province’s minimum wage from $10.65 to $11.00 on April 1, 2017. Following the increase to $11.00, all future minimum wage increases will be based on changes in the rate of inflation.

Objective:

Minimum wage changes should be based on the change in the Consumer Price Index (CPI) for the previous year.

Current Status:

The announcement is the final step towards the fulfillment of a promise for an $11.00 per hour minimum wage made by the Liberal government during the last election campaign. This promise included a commitment that following the increases to $11.00 per hour, all future minimum wage changes will be determined based on changes to the rate of inflation.

As this was a campaign promise, the government has only engaged in minimal consultation with industry stakeholders on minimum wage issues since taking office. In conversations with officials in Premier Gallant’s office, the government will move to a ‘rate of inflation’ mechanism for determining minimum wage by April 1, 2017.

Background:

RCC has commended the New Brunswick government on its decision to tie minimum wage increases to the rate of inflation. However, RCC continues to be very specific in its call for the government to base its minimum wage increases on the previous year’s increase in CPI. Such a decision would harmonize New Brunswick with the process used in neighbouring Nova Scotia.

Nova Scotia’s minimum wage currently sits at $10.70 per hour but will increase by CPI on April 1, 2017. Prince Edward Island’s minimum wage increased to $11.00 in 2016. PEI does not use a rate of inflation formula for determining minimum wage increases.

As part of a growing initiative for greater harmonization between the Maritime provinces, Nova Scotia, Prince Edward Island and New Brunswick have all legislated that if changes to minimum wage are to occur, it will only happen on April 1st each year.

RCC met with New Brunswick’s Liberal Leader Brian Gallant on this issue while he was Leader of the Opposition. At the time, he was interested in RCC’s position that minimum wage increases should only be based on the previous year’s increase in CPI.

RCC has already been successful in convincing the Nova Scotia government to base its minimum wage increases on the previous year’s increase in CPI. RCC uses the Nova Scotia model as a positive example of how other provinces should determine their minimum wage.

Next Steps:

RCC will continue to push for predictable minimum wage increases based on the change in the consumer price index. This allows for predictability and depoliticizes any such decision.

If you have any questions or concerns, please don’t hesitate to contact: Jim Cormier, Director (Atlantic) at: jcormier@retailcouncil.org or (902) 422-4144