The Ontario government is increasing the minimum wage from $17.20 to $17.60 an hour in October, but some experts say that’s not enough to support residents in need.
The government’s announcement says the increase is part of an annual effort to reflect living costs, according to inflation, and will add up to $835 to workers’ annual paycheque.
“Ontario’s minimum wage remains one of the highest in the country. Now more than ever, workers and businesses need fair, balanced and predictable wages,” Minister of Labour, Immigration, Training and Skills Development David Piccini said.
📢 The Ontario government is increasing minimum wage to $17.60/hour, effective October 1, 2025, to help nearly one million workers receive bigger paycheques.
— Ontario At Work (@ONTatwork) April 1, 2025
This increase is based on the Ontario Consumer Price Index (CPI) of 2.4%.
Learn more: https://t.co/u5gG4WuLjh pic.twitter.com/Oc4kQnH9zW
According to Dr. Rafael Gomez, director of the Centre for Industrial Relations and Human Resources at the University of Toronto, the pay increase will not only affect minimum wage workers, but also those who earn above it.
“One of the things people forget is that there is sometimes a need to maintain relative wage differentials inside organizations and so on. So, the spread of a minimum wage increase would, in theory, affect people beyond just those that are at minimum wage currently.”
The professor also said that another thing to consider about increasing the minimum wage is that it could also have negative medium or long-term effects, such as slowing down job growth or leading to job losses in sectors with traditionally lower income rates, or even affecting inflation.
“The fact is, whether prices go up or down, if you don’t have productivity, all increasing wages could do is fuel more inflation, right? Because inflation, ultimately is the fact there’s just less supply meeting demand, and you need to have a way of relaxing the supply constraints to keep prices more in line,” he said.
Gomez explained that since the announced increase is moderate and could already be predicted, its impact in the market won’t be too significant.
“Whether they’re positive or negative, the effects are modest [than] when you have big jumps,” he added.
NO PLACE IN ONTARIO WHERE YOU CAN LIVE FOR $17.60/HR
Meanwhile, the Director of Communications at the Ontario Living Wage Network (OLWN) Craig Pickthorne warns that $17.60 an hour is not enough money to live in the province.
He told Now Toronto that while the increase could have some impact on workers’ finances at the end of the month, this extra $16 a week is easily expendable for a full-time worker in Ontario, given its high living costs, especially related to rent or mortgage payments.
“Technically, it is an increase and that is a good thing, but there is still no place in the province where you can cover all your expenses working a minimum wage job, even after the increase,” he said.
The OLWN, an organization of employers, employees, non-profits, and researchers that advocate for liveable wages, offers calculations of what a worker would need to earn to make a living based on various factors like rent, transportation, food, childcare and more.
Based on their 2024 calculations, even considering the upcoming increase, a minimum wage worker wouldn’t be able to cover basic living expenses in any Ontario city.
“Many people are surprised at how far off the minimum wage is from the living wage. Ideally, there would not be such a gap. Toronto is the highest of course, at $26.00/hr, which will still be $8.40 more than the minimum wage,” Pickthorne said.
The rates also reveal that the cheapest Ontario region to live in, London Elgin Oxford, still demands a minimum wage of $19.50 per hour to cover living costs.
WHAT ELSE CAN BE DONE?
Pickthorne says that while increasing wages could be a good start to helping workers afford life in Ontario, there are other measures that the province could take to achieve that, such as investing in further rent control and controlling food prices.
On the other hand, Gomez believes that economically, controlling prices this way would also not be a good idea.
“Prices are signals, like they give you information. So, when there are shortages, we realize we want price controls and wages? Really not. If wages are going up, we’d like for workers to take advantage of that and also provide a signal to people that these jobs are in demand and we want more people in them.”
According to him, a better idea to support low-income workers in the province would involve providing specific subsidies for those in need.
“The best strategy, of course, is keeping prices low, [and not] fueling inflation through reckless government spending or not productive investments that don’t allow supply to match the demand and therefore make prices more stable,” he added.
