Future minimum wage increases in New Brunswick will return to being calculated based on the consumer price index following a two-dollar jump over the last year.
New Brunswick began tying increases to CPI in 2019, which led to the minimum wage going up by a nickel in 2021. Minister of Post-Secondary Education, Training and Labour Trevor Holder later called that increase “embarrassing.”
That led to the country’s lowest minimum wage of $11.75 being boosted by two dollars to $13.75, which is currently the highest in the region.
“What you saw over the last year is a course correction that brought us more in line with Atlantic Canada and the rest of the country, quite frankly,” Holder told reporters last week.
“And with the CPI indications in place, all indications suggest we’ll see a significant increase in April as well.”
But according to Randy Hatfield, the executive director of the Human Development Council, indexing things like minimum wage to CPI does nothing to improve the situation of low-income workers, rather maintaining the status quo.
“Merely indexing an amount (to CPI) would preserve, arguably, the purchasing power of a benefit or entitlement but it doesn’t provide for a real increase,” he said.
Even with the average annual CPI for 2022 expected to be between six and seven per cent, an increase of a dollar would still put the minimum wage far below a living wage, according to a report from the Human Development Council.
The yearly Living Wage Report from the organization calculates a living wage for Fredericton in 2022 at $23.45. The living wages for Saint John and Moncton for this year are $21.60 and $20.85, respectively. Bathurst had the lowest living wage in the province at $19.20.
The wage is calculated based on the cost of a basket of necessary goods and services for a family of four in a given community, though the report notes that the wage would be similar for a single person or lone-parent family.
While the recent increases to minimum wage are needed, they’re still far below what is needed to live above the poverty line, Hatfield says.
“There’s really no way that full-time work at minimum wage would allow somebody to afford a safe and warm apartment, or to eat nutritiously or have transportation options where there aren’t public transit with reasonable schedules and reasonable fares,” he said.
“If a person works full-year, full-time, they shouldn’t live in poverty and I think most people can say that makes sense.”
Holder said the topic of a living wage has been discussed by the government, which partly funds the annual Living Wage Report through its poverty-reduction Crown corporation, but there are no plans to move toward instituting it right now.
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He says CPI will continue to form the basis for future increases.
“At the end of the day with CPI it gives predictability to industry and it also makes sure that on a regular timetable minimum wage is increased,” he said.
Holder encouraged those working low-wage jobs to get in touch with Working NB in order to explore retraining opportunities.
“Anyone out there who wants to get beyond minimum wage I would highly suggest that they get in touch with one of our 19 Working NB offices,” he said.
The decision to return to a CPI-based annual increase is being applauded by the Canadian Federation for Independent Businesses, even if it means a large increase to the minimum wage in New Brunswick come April next year.
“As long as (increases are) connected to a method and not connected to just a political decision of an arbitrary increase like in P.E.I., Nova Scotia or Newfoundland,” said Louis-Philippe Gauthier, the Atlantic vice-president of the CFIB.
“From our perspective, we’ve never been opposed to minimum wage increases, but they have to be based on something real.”
Nova Scotia will be increasing the minimum wage to $14.30 in April and $15 in October of 2024. Newfoundland and Labrador will see the rate increase to $14.50 in April and $15 in October, while Prince Edward Island will bump its minimum wage to $14.50 in January and $15 in October.
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