Ontario to increase minimum wage to $15/hour on January 1, 2022

In Thursday’s forthcoming Fall Economic Statement, the Ontario government will introduce legislation that will raise the general minimum wage from $14.35 to $15.00 per hour effective January 1, 2022. Under the proposed changes, the special minimum wage rate for liquor servers would be eliminated and they would be entitled to the general minimum wage. Similarly, students under 18, homeworkers and hunting, fishing and wilderness guides would also see an increase in their special minimum wage rates.

See below for a table, speaking to the proposed increase to minimum wage by job category. 

• General Minimum Wage: Increasing by 4.5% from $14.35 to $15.00 per hour.
• Liquor Services Minimum Wage: Increasing by 19.5% from $12.55 to $15.00 per hour.
• Student Minimum Wage: Increasing by 4.4% from $13.50 to $14.10 per hour.
• Homeworkers Minimum Wage: Increasing by 4.4% from $15.80 to $16.50 per hour.

Our view is that today’s announcement is a very different proposition than what was proposed in 2017 by the former Ontario Liberal government. Although any increase will have an inflationary effect on labour costs and ultimately on consumer pricing, a 4.5% increase in the minimum wage is not vastly above the current rate of inflation. By contrast, the January 2018 increase by the previous government represented a 22.8% hike and their planned 2019 rate would have resulted in a hike just shy of 30%.

We certainly know that the increase could be challenging for those retail businesses that are struggling to recover from the pandemic. RCC would have preferred more notice. Both of these points were communicated to the Ontario government early today given that they did not conduct stakeholder consultations in advance of making an announcement. We shared that the key issue from our perspective has always been predictability and lead time so that businesses can plan accordingly.

In light of this being a pre-election year, with opposition parties pushing to go further still on minimum wage, a 65 cent per hour change is not outside the range of expectation. The increase will pass in this majority government and RCC is focused on the broad range of employment related issues rather than dwelling too much on this one that is a fait accompli.