By admin (October 3, 2024)

With Ontario’s Minimum Wage Increase, Can Newcomers Afford to Live?

As of October 1, Ontario, Prince Edward Island, Manitoba, and Saskatchewan have raised the legal minimum wage for workers. Most of these increases are gradual and linked to inflation. In Ontario, for instance, the minimum wage has risen from $16.55 to $17.20 per hour.

The average income for minimum-wage workers largely depends on their weekly working hours. According to Statistics Canada, a full-time employee in Ontario worked an average of 39.3 hours per week in 2023. If we assume all hours are paid (excluding unpaid breaks), this results in a gross weekly income of approximately $675.96 for those earning minimum wage. Since most employers in Ontario pay bi-weekly, a full-time worker can expect to earn around $1,351.92 per paycheck. Part-time workers, on the other hand, will earn significantly less.

If we calculate this over 26 pay periods a year (52 weeks divided by 2), minimum-wage employees can anticipate an annual gross income of about $35,149.92. However, using Wealthsimple’s income tax calculator, an employee in Ontario with this average salary would take home approximately $29,026 annually, assuming no additional income or investments.

So, is it possible to live on a full-time minimum wage salary in Ontario? This question is particularly pertinent for newcomers, especially those immigrating without job offers who must quickly find work to support themselves or demonstrate income for housing.

Cost of Living for Newcomers in Ontario

According to the 2021 Census, 46.6% of Toronto’s population consists of immigrants, making it the city in Canada with the highest number of newcomers. Many newcomers initially rent while they save for a home.

Based on various sources, here’s an overview of the living expenses for a single person in Toronto, which may be higher than in other parts of Ontario or Canada. Note that these are estimates and costs can fluctuate:

• Average rent for a one-bedroom apartment: $2,452 (as of September 2024, TRREB)
• Monthly grocery cost for one person: $526.50 
• Utilities (electricity, heating, cooling, water): $160.44 
• Phone plan: $56.20 
• Internet: $69.70 
• Public transport: $3.30 per trip or $143 for a monthly adult TTC pass 

This adds up to about $3,407.84 monthly for essentials for a single person in Toronto, totaling approximately $40,894.08 per year. This amount exceeds the gross average annual income of a minimum-wage worker by over $5,000, or more than $11,000 compared to their net annual income.

There are strategies to lower living expenses, such as opting for shared housing, taking advantage of grocery sales, choosing cheaper phone and internet plans, or walking instead of using public transport.

Newcomers in Minimum-Wage Positions

Newcomers often find themselves in minimum-wage jobs while waiting for their foreign qualifications to be recognized. According to government data, 20% of jobs in Canada are regulated and require specific licenses or certificates.

Each province has its own licensing body for these professions, resulting in no national data on the duration for credential recognition. Meanwhile, many newcomers must work in positions outside their field of expertise, which typically pay minimum wage or slightly above.

A Statistics Canada report from earlier this year revealed that between 2001 and 2021, immigrant workers increasingly took on low-skilled jobs, often alongside temporary foreign workers (TFWs), filling roles that used to be occupied by Canadian-born individuals.