‘We will continue to monitor the matter closely,’ said Alberta Jobs Minister Matt Jones
Six years ago, Alberta grabbed national attention for bringing its minimum wage to $15 in 2018 from $12.20 within two years. The move drew praise from labour representatives and criticism from business groups as the province zoomed past its counterparts.
On Tuesday, Alberta again garnered mention — this time for tumbling to last place after four provinces bumped their rates for the second time in the past two years, while Alberta’s minimum wage has remained frozen since 2018.
Ontario, Prince Edward Island and Manitoba raised their minimum wages to $17.20, $16 and $15.80, respectively. Saskatchewan’s rate also climbed by a dollar, bringing the province at par with Alberta.
“A wage freeze is a cut,” Gil McGowan, president of the Alberta Federation of Labour, said in a statement on Tuesday.
“If the Alberta minimum wage had kept pace with inflation over the past six years, it would be $19 per hour today, but, given the high cost of living in Alberta, even that would not be enough.”
However, Alberta’s temporary ascent in the minimum wage race was an aberration, said Jason Foster, professor of labour studies at Athabasca University.
“Alberta has had the lowest, or among the lowest minimum wages — like for decades,” Foster said.
“We’ve had governments who are very open to the arguments of employers that you can’t raise the minimum wage because it’ll cost jobs and raise prices.”
The sharp rise in minimum wage from 2016 to 2018 was led by the NDP government, the result of one of its campaign promises.
Soon after the UCP was elected to the government, the province introduced Bill 2: An Act to Make Alberta Open for Business, creating a separate minimum wage for youth under 18 at $13 per hour — the first of its kind in Canada — in the hopes of increasing employment.
There is no evidence the rate reduction created more jobs for youth.
The UCP government also gathered a panel to study the reintroduction of a lower minimum wage for servers, which the NDP had earlier removed. The panel reported their findings in 2020, but the government did not act on them, stating the report wouldn’t be released since labour conditions had shifted since it was written.
Meanwhile, nine provinces and one territory have raised their minimum wages twice between 2022 and 2024.
When asked if Alberta is contemplating an increase after six years, Minister of Jobs, Economy and Trade, Matt Jones, stated in an emailed statement: “Minimum wage is an important issue for our government. We will continue to monitor the matter closely and evaluate the appropriateness of the current calibration to best serve Albertans.”
In an earlier paragraph, Jones stated, “Albertans keep more of what they earn, as our province has the lowest provincial income tax rates, the highest personal income tax exemption levels and no provincial sales tax.”
For instance, Alberta’s first income tax bracket begins at 10 per cent for salaries $148,269 or less. Meanwhile, B.C. and Ontario’s tax brackets begin at about five per cent for wages between $47,000 and $52,000. B.C.’s tax rate surpasses Alberta’s after about $95,000, and Ontario’s rate outstrips the prairie province after roughly $102,000.
Poor minimum wages combined with a higher income tax, Foster said, “speaks to a lack of concern for the well-being of low-income workers.”
According to several inflation calculators, including that of the Bank of Canada, a worker who earned $15 per hour or $31,200 annually in 2018 loses upwards of $6,000 a year in 2024 without a pay bump.
However, business groups continue to balk at a rate increase.
“We don’t think that right now is the right time for an increase in the minimum wage,” Bradlee Whidden, western policy analyst with the Canadian Federation of Independent Business (CFIB).
“We’re at a point where 30 per cent of Alberta small businesses are in weaker critical health.”
Whidden argued that higher minimum wages would lead to a decrease in employment and profits for businesses while raising consumer prices.
What does research have to say about this?
Contemplating higher minimum wages in exchange for higher consumer prices is a moral debate, said Foster.
“It’s the question of whether this group of workers is supposed to subsidize my burger,” he said.
The logic behind holding back increases to minimum wage lest prices rise, Foster said, is “that these workers have to make lousy wages so that the cost of my restaurant meal or my hotel room or whatever stays cheaper.”
Nevertheless, Whidden argued raising minimum wages doesn’t target a significant majority.
“Most minimum wage earners in the province are young people just entering the workforce, people that will stay in that position for one, maybe two years,” he said.
“So let’s not resort to blunt tools that could end up negatively hurting workers elsewhere, because if businesses need to make cuts to their labour force to keep up with rising costs, that’s not going to help affordability in the province.”
However, a profile of those earning the minimum wage in Alberta paints a different picture.
In addition, people working in such jobs tend to continue them for longer periods, said Meaghon Reid, executive director of Vibrant Communities Calgary.
“It’s hard to get out of that minimum wage cycle because if you’re working two or, in some cases, three minimum wage jobs, it’s hard to get the time or the money to be able to retrain for something that might be higher paid,” Reid said.
However, raising the minimum wage isn’t a panacea for all affordability problems, Reid said. She stressed the need for government investment in childcare and affordable housing, tax breaks for those experiencing poverty and thoughtful policies regarding immigration to ease pressures on those struggling to make ends meet.