Ontario’s Minimum Wage Increase: Is It Enough for Newcomers to Live On?

As of October 1, several provinces in Canada, including Ontario, Prince Edward Island, Manitoba, and Saskatchewan, have increased their minimum wage. These increases are mainly linked to inflation, ensuring wages keep pace with rising costs. In Ontario, the minimum wage has risen from $16.55 to $17.20 an hour.

What Does This Mean for Workers?

For a full-time employee in Ontario, working an average of 39.3 hours per week (based on Statistics Canada data), this translates to gross earnings of about $675.96 per week before taxes and deductions. Most employers pay bi-weekly, so full-time minimum wage workers can expect around $1,351.92 per paycheck. Over the course of a year, with 26 pay periods, this equals a gross income of approximately $35,149.92. After taxes, the net income for this salary is about $29,026, according to Wealthsimple’s tax calculator.

Can You Live on Minimum Wage in Ontario?

For many newcomers to Ontario, particularly those who arrive without a job offer, living on a minimum wage salary may be challenging. In large cities like Toronto, where nearly half of the population consists of immigrants, the cost of living is high. Here’s a snapshot of what a single person living in Toronto might expect to spend each month:

• Rent for a one-bedroom apartment: $2,452 (as of September 2024)
• Groceries: $526.50
• Utilities: $160.44
• Phone plan: $56.20
• Internet: $69.70
• Public transportation: $143 for a monthly pass
  
  

In total, the average monthly cost of living comes to approximately $3,407.84, or about $40,894.08 per year. This is significantly higher than what someone earning minimum wage takes home, creating a gap of over $11,000 between net earnings and living expenses.

Reducing Costs

While these figures paint a challenging picture, newcomers can reduce expenses by sharing accommodation, shopping smart, opting for budget phone or internet plans, and using public transportation instead of more expensive commuting options.

Minimum Wage Jobs for Newcomers

Many newcomers, particularly those waiting for their foreign credentials to be recognized, may need to take minimum wage jobs in the interim. Around 20% of Canadian jobs are regulated, meaning you need a license or certificate to work in these professions. As each province has its own rules for credential recognition, there’s no set timeline for when newcomers can start working in their trained fields.

Statistics Canada reports that between 2001 and 2021, the number of immigrant workers in low-skilled jobs increased. Many of these roles, often paying minimum wage, were previously filled by Canadian-born workers. This trend highlights the challenges newcomers face when transitioning to the Canadian job market.

While Ontario’s minimum wage increase provides some relief, it’s clear that newcomers may still face financial challenges when trying to settle in the province, especially in large cities like Toronto. However, with careful planning and budgeting, it is possible to manage these challenges while working towards a better financial future.