Nunavut minimum wage going to $19 an hour on Jan. 1, GN announces

Move will make territory’s minimum wage highest in Canada; minister cites need for relief from high cost of living

Nunavut’s minimum wage will rise to $19 an hour next year from the current $16 in a move aimed to combat inflation and the high cost of living, the territorial government announced Friday.

That change — an 18 per cent raise, starting Jan. 1, 2024 — will make Nunavut’s minimum wage the highest in Canada, over $2 an hour more than the second-highest of $16.77 in Yukon.

“We recognize Nunavummiut face the highest cost of living in Canada and that during this time of increasing costs and high inflation, the financial pressure on Nunavummiut has increased,” Justice Minister David Akeeagok said in the legislative assembly.

Iqaluit-Sinaa MLA Janet Pitsiulaaq Brewster applauded the move, saying it “will go towards creating healthier homes by allowing families to be better able to afford healthy food.”

Akeeagok said the decision to raise the minimum wage was made after a survey and consultations with employees and business owners, as well as a financial and statistical review.

Noting that “food security, at the root of it, is an income issue,” Duane Wilson, vice-president of stakeholder relations for Arctic Co-op, said “steps that help improve income are generally going to have a positive effect.”

While higher minimum wages could increase the price of some products, which would impact people’s food security, Wilson said the financial situation for each of the 23 co-op stores across Nunavut is unique.

He said some might be able to absorb the increased cost without passing it on to consumers through higher prices. Others, though, might not be able to, or might have to adjust their patronage dividend program to cover the added cost.

At Arctic Co-ops, customer members receive a yearly dividend based on the store’s profits for the year.

“I would highly doubt that there would be any job losses as a result” of the higher minimum wage, Wilson said.

Meanwhile, two Ottawa university professors disagreed Friday over the impact a higher minimum wage could have.

Ian Lee, an economist and professor at Carleton University’s Sprott School of Business, said in an interview that “I have seen study after study and the majority, not 100 per cent but the majority of economists agree that minimum wage increases reduce employment.”

He said some businesses will raise prices to compensate for the expenditure. Others will not be able to raise prices for fear of losing customers, so instead will cut staff.

Raising the minimum wage is a way governments can address poverty, Lee acknowledged, but he called it a scattershot approach that should be more targeted to help those who need it without affecting others.

The federal government has the tools to do that, he said, in the form of tax rebates and other incentives.

He cited carbon tax rebates and the proposed national pharmacare program as other examples where the government is doing just that. Only people at lower income levels will be able to benefit from those.

Asked in the interview what he thought raising the minimum wage in Nunavut to $19 from $16 would lead to, Lee answered:

However, retired economist and University of Ottawa professor Mario Seccareccia disputed that opinion.

In an interview, he said that contrary to popular opinion minimum wage increases do not generally lead to higher unemployment.

Seccareccia has studied the issue for decades and said that in a large Canada-wide and decades-long study, he found that in sectors with a high proportion of minimum wage workers “it did not have any statistically significant effect on reducing employment.”

In fact, he said, for the employer, improved productivity from workers who are paid more generally offsets the increased cost of paying those workers.

At the Nunavut assembly Friday, Akeeagok said the government “is also exploring options to index future minimum wage increases to a specific formula, such as the Consumer Price Index, to ensure more consistent and regular increases going forward.”