little reflection around a 50¢ per hour increase in the minimum wage.
Starting Wednesday, the general minimum wage rate will increase to $15.75 an hour — an increase of 50¢ or 3.3%. That of tipped employees will be increased by the same percentage, to $12.60 per hour. There is, however, a gap with the annual variation of the consumer price index (CPI), which was 4.5% in 2023, but Quebec wants to compare everything with inflation of 2.3 % planned for the 2024-2025 financial year.
Small consolation: the indexation rate of the personal tax system is 5.08% for 2024. Moreover, with this increase in the minimum wage and this strong indexation of tax systems, the various analyzes juxtapose the drop in Quebec tax and the improvement of the solidarity credit in order to conclude an improvement in the disposable income of all households and a high proportion of the increase in the minimum wage retained by households. This contribution, however, is intended to be attenuated by the time lag in the adjustment of the tax table and major social transfer programs based on the cost of living. The rapid and persistent rise in inflation has also accentuated
the scope.
But it still has to be sufficient to cover the needs
basic.
Indeed, we must also remember that beyond this overall CPI, on an average annual basis, the prices of food purchased in stores recorded an increase of 7.8% in 2023, Statistics Canada tells us. Over the same period, growth in housing prices was 5.6%, after a surge of 6.9% in 2022, while consumers paid 6.5% more for their rent in 2023, an increase which adds to that of 4.6% in 2022. Increases affecting the satisfaction of essential needs, increasingly felt on budgets located lower on the income scale.
At the same time, the mortgage interest cost index alone rose 28.5% last year, posting its largest increase on record and being the largest factor behind the increase in the annual CPI overall average in 2023, underlined the federal agency.
10% more at the federal level
We can also extend the comparison with the 3.9% increase in the federal minimum wage. Since 1er April, the floor rate for workers and the wage structure of federally regulated private sector companies stands at $17.30 per hour, compared to $16.65 previously. If the province or territory offers a higher general minimum wage rate, that is what is applied. This is the case for Nunavut ($19 per hour) and Yukon ($17.59). This will be the case for British Columbia ($17.40 per hour as of 1er June). In Quebec, workers in banks, postal and courier services, or even interprovincial air, rail, road and maritime transport therefore benefit from a floor rate 10% higher than the general Quebec rate.
Another element that must enter into the comparison: the adjustment of the federal minimum wage reflects the 3.9% increase in the annual average of the CPI in Canada for 2023, and not any anticipated deceleration.
The 3.3% increase in Quebec’s minimum wage will directly benefit 200,700 employees, more than half of whom are women. For all employees, the update of the survey on 2024 salary forecasts published at the end of March by the Order of approved human resources advisors forecasts for 2024 an average increase of 3.7% for all jobs combined. in Quebec. It is recalled that, for 2023, average weekly remuneration (including overtime) increased by the same percentage, according to Statistics Canada.
Quebec in third place
The government is pleased to see that Wednesday’s increase will position Quebec third in the provincial ranking. “Quebec ranks first among the various Canadian provinces in terms of the coverage rate of the Market Basket Measure (MPM) and the minimum wage adjusted to the cost of living,” he adds. To then recall that, in recent years, “government policy on the minimum wage aims to achieve a ratio of 50% between this salary and the average hourly wage. The ratio will reach 50.8% with this new increase.” However, in the game of international comparisons, the barometer of 60% of median income is generally used.
And we are still far from the broader concept of viable income defended by the Institute for Socioeconomic Research and Information (IRIS). Roughly speaking, IRIS grafts the notion of a decent wage to the MPC, to align everything with the more real needs of households calculated according to the cost of living and regional realities. We would be at $20 or more an hour in a number of
regions.
Cost increases affecting the satisfaction of basic needs are always more felt on budgets lower on the income scale