Minimum wage in Canada since 1975

Canadian Megatrends

The first legislation in Canada governing minimum wage was introduced in the early 20th century and was intended, at the time, to prevent the exploitation of women and children. While some today see the minimum wage as a way to improve workers' standard of living and to reduce poverty and inequality, others believe that setting a legal minimum wage tends to eliminate jobs that require little specialization—often student jobs—and to increase unemployment and poverty among low-skilled workers.

In Canada, minimum wage is provincially regulated, but a national minimum wage can be calculated using the rate in each province.

Minimum wage in synch with average hourly earnings

While Canada has undergone important economic, social and technological changes since the 1970s, the minimum wage and the average hourly wage are essentially unchanged.

After adjusting the minimum wage and average hourly earnings for inflation, fluctuations in the minimum wage almost mimic fluctuations in employees' average hourly earnings. Taking inflation into account, the minimum wage peaked in 1976 at just over $11 an hour in Canada. The following year—1977—average hourly earnings peaked at close to $24.

Although these indicators have fluctuated since then, the minimum wage in 2014—after adjusting for inflation—had an average value of $10.39 per hour, and average earnings were between $22.70 and $24.51 per hour, depending on the data source used. These values were comparable to those observed in the late 1970s.

Chart 1 - Minimum wage and average hourly earnings in Canada, 1975 to 2014
Description for Chart 1

Chart 1a Average hourly earnings by source and minimum wage

The title of the graph is "Chart 1a Average hourly earnings by source and minimum wage."
This is a line chart.
There are a total of 40 categories in the horizontal axis. The vertical axis starts at 0 and ends at 30 with ticks every 5 points.
There are 4 series in this graph.
The vertical axis is "$ constant 2014."
The units of the horizontal axis are years from 1975 to 2014.
The title of series 1 is "SEPH—Manufacturing."
The minimum value is 21.7 occurring in 1988.
The maximum value is 23.8 occurring in 1977.
The title of series 2 is "SEPH—Total."
The minimum value is 19.7 occurring in 1979, 1980, 1981, 1982 and 1983.
The maximum value is 22.7 occurring in 2005 and 2006.
The title of series 3 is "LFS—Total."
The minimum value is 21.59 occurring in 1975.
The maximum value is 24.54 occurring in 1991.
The title of series 4 is "Minimum wage."
The minimum value is 7.88 occurring in 1986.
The maximum value is 11.28 occurring in 1976.

Chart 1a Ratio between minimum wage and average hourly earnings
Year SEPH—Manufacturing SEPH—Total LFS—Total Minimum wage
1975 21.8     10.64
1976 23.2     11.28
1977 23.8     10.95
1978 23.4     10.39
1979 23.3     9.99
1980 23.3     9.43
1981 23.2     9.17
1982 23.4     8.67
1983 22.5 20.8   8.25
1984 22.5 20.6   8.19
1985 22.5 20.4   8.06
1986 22.2 20.1   7.88
1987 21.8 19.7   7.94
1988 21.7 19.7   8.00
1989 21.8 19.7   8.04
1990 21.9 19.7   8.06
1991 21.8 19.7   8.04
1992 22.2 20.1   8.52
1993 22.1 20.0   8.69
1994 22.4 20.2   8.95
1995 22.4 20.1   9.01
1996 22.8 20.3   9.03
1997 22.4 20.1 21.59 8.95
1998 22.8 20.2 21.64 8.92
1999 22.4 20.1 21.79 8.92
2000 22.5 20.0 21.86 8.75
2001 22.7 20.4 22.04 8.65
2002 22.4 20.3 22.11 8.56
2003 22.6 20.3 21.98 8.43
2004 22.9 20.6 22.12 8.47
2005 23.2 20.8 22.34 8.54
2006 22.6 20.9 22.62 8.71
2007 23.3 21.3 22.91 8.80
2008 23.3 21.6 23.34 9.16
2009 22.3 22.0 24.07 9.70
2010 22.8 22.0 24.12 10.05
2011 22.8 22.2 23.89 10.07
2012 23.1 22.3 24.23 10.27
2013 23.0 22.7 24.54 10.34
2014 22.8 22.7 24.51 10.39

Chart 1b Ratio between minimum wage and average hourly earnings

The title of the graph is "Chart 1b Ratio between minimum wage and average hourly earnings."
This is a line chart.
There are a total of 40 categories in the horizontal axis. The vertical axis starts at 0 and ends at 60 with ticks every 10 points.
There are 3 series in this graph.
The vertical axis is "percent."
The units of the horizontal axis are years from 1975 to 2014.
The title of series 1 is "SEPH—Manufacturing."
The minimum value is 35.6 occurring in 1986.
The maximum value is 48.7 occurring in 1975 and 1976.
The title of series 2 is "SEPH—Total."
The minimum value is 39.3 occurring in 1978.
The maximum value is 46 occurring in 2004.
The title of series 3 is "LFS—Total."
The minimum value is 38.2 occurring in 1983.
The maximum value is 42.4 occurring in 1990 and 1992.

Chart 1b Ratio between minimum wage and average hourly earnings
Year SEPH—Manufacturing SEPH—Total LFS—Total
1975 48.7    
1976 48.7    
1977 46.1    
1978 44.5    
1979 42.9    
1980 40.5    
1981 39.5    
1982 37.1    
1983 36.6 39.6  
1984 36.4 39.8  
1985 35.9 39.6  
1986 35.6 39.3  
1987 36.4 40.2  
1988 36.9 40.7  
1989 36.9 40.8  
1990 36.7 41.0  
1991 36.8 40.9  
1992 38.3 42.4  
1993 39.3 43.5  
1994 39.9 44.3  
1995 40.3 45.0  
1996 39.7 44.6  
1997 40.0 44.6 41.4
1998 39.2 44.1 41.2
1999 39.8 44.3 40.9
2000 38.8 43.6 40.0
2001 38.0 42.4 39.2
2002 38.1 42.2 38.7
2003 37.3 41.5 38.4
2004 36.9 41.2 38.3
2005 36.9 41.0 38.2
2006 38.5 41.7 38.5
2007 37.8 41.4 38.4
2008 39.3 42.5 39.2
2009 43.5 44.1 40.3
2010 44.0 45.6 41.7
2011 44.1 45.4 42.2
2012 44.5 46.0 42.4
2013 45.0 45.5 42.1
2014 45.6 45.8 42.4

Minimum wage is often expressed on the basis of average hourly earnings. This ratio can vary depending on the data source used, but the trends are similar. In 1975, the minimum wage represented almost 49% of average hourly earnings, compared with a value of between 42% and 46% in 2014.

Proportion of workforce earning minimum wage slightly increases

Between 1997 and 2014, the proportion of employees receiving minimum wage rose from 5.0% to 7.2%. Most of this increase occurred between 2003 and 2010. This proportion was lowest in Alberta, at 1.7%, followed by Saskatchewan at 3.5%. Ontario had the highest proportion at 10.9%.

Chart 2 - Proportion of employees paid at minimum wage by province, 2014
Description for Chart 2

The title of the graph is "Chart 2 Proportion of employees paid at the minimum wage rate by province, 2014."
This is a bar clustered chart.
This is a horizontal bar graph, so categories are on the vertical axis and values are on the horizontal axis.
There are a total of 11 categories in the vertical axis. The horizontal axis starts at 0 and ends at 12 with ticks every 2 points.
There is 1 series in this graph.
The horizontal axis is "percent."
The vertical axis is "province."
The title of series 1 is "Proportion of employees paid at the minimum wage rate by province, 2014."
The minimum value is 1.7 and it corresponds to "Alberta."
The maximum value is 10.9 and it corresponds to "Ontario."

Chart 2 Proportion of employees paid at the minimum wage rate by province, 2014
Province percent
Ontario 10.9
Canada 7.2
New Brunswick 6.7
Prince Edward Island 6.1
Quebec 6.0
British Columbia 5.9
Nova Scotia 5.7
Newfoundland and Labrador 5.4
Manitoba 5.1
Saskatchewan 3.5
Alberta 1.7

When the minimum wage goes up, the proportion of employees paid at minimum wage may increase. This is because some employees who were earning above the minimum wage join the ranks of those earning the minimum wage.

In 2014, as in 1997, youth, women, students and people with a lower level of education were the groups most likely to be paid at minimum wage. In 2014, 49% of employees aged 15 to 19 years and 15% of those aged 20 to 24 were paid at minimum wage. The rate for women was 9%, compared with 6% for men. Among students, 29% were paid at minimum wage, versus 5% of non-students. Lastly, 20% of employees with less than a high school diploma were paid at minimum wage, compared with 3% of employees who had a university degree.

Chart 3 - Proportion of employees paid at minimum wage by age group, 2014
Description for Chart 3

The title of the graph is "Chart 3 Proportion of employees paid at the minimum wage rate by age, 2014."
This is a column clustered chart.
There are a total of 6 categories in the horizontal axis. The vertical axis starts at 0 and ends at 60 with ticks every 10 points.
There is 1 series in this graph.
The vertical axis is "percent."
The horizontal axis is "age."
The title of series 1 is "percent."
The minimum value is 4.0 and it corresponds to "25 to 34."
The maximum value is 48.4 and it corresponds to "15 to 19."

Chart 3 Proportion of employees paid at the minimum wage rate by age, 2014
Age percent
15 to 19 48.4
20 to 24 15.0
25 to 34 4.0
35 to 64 5.1
65 years and older 7.3
Total 7.2

Definitions

Minimum wage: The lowest hourly wage rate that an employer can legally pay its employees.

Average hourly earnings: Amount obtained by dividing employees' weekly pay by the number of hours in their normal work week.

References

Galarneau, D. and E. Fecteau. 2014. “The ups and downs of minimum wage,” Insights on Canadian Society, Statistics Canada Catalogue no. 75-006-X.

Fortin, P. 2010. “Salaire minimum, pauvreté et emploi : à la recherche du compromis idéal,” Regards sur le travail. Vol. 7, no. 1 (French only).

Resource persons

To enquire about the concepts, methods and data quality in this publication, contact Diane Galarneau (613-854-3018) or Sébastien Larochelle-Côté (613-951-0803), Labour Statistics Division.

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