Alberta is now tied for the lowest minimum wage in Canada

Alberta, which had the highest minimum wage in Canada six years ago, is now tied with Saskatchewan for the lowest at $15 an hour.

The province dropped into the tail position on Tuesday as four others, including Saskatchewan, raised their minimum wages to account for inflation.

Alberta has not raised its minimum wage since 2018.

Anti-poverty advocates say the provincial government needs to look at raising the minimum wage, saying it would help families keep pace with rising inflation and expenses.

But some of those arguing for a status quo in the minimum wage say many smaller businesses across the country are too fragile to absorb the cost of higher wages.

"We're not necessarily against increases in the minimum wage, but we want to make sure that any increase is sustainable, stable and predictable," said Bradlee Whidden, western policy analyst with the Canadian Federation of Independent Business (CFIB).

Minimum wage climbed on Oct. 1 in 4 provinces

Between Jan. 1, 2022 and Jan. 1, 2023, nine provinces and one territory raised their minimum wage rates. Then, between Jan. 1, 2023 and Jan. 1, 2024, nine provinces and three territories raised their minimum wage rates, according to Alberta's provincial government.

On Tuesday, minimum wages went up in Saskatchewan, Manitoba, Ontario and P.E.I. It's tied to inflation and formulas set forth by their own provincial governments.

The federal minimum wage which the Canadian government says affects around 30,000 employees in the federally regulated private sector was adjusted to $17.30 per hour back in early spring to reflect the increase in Canada's annual average Consumer Price Index for 2023 and was aligned with inflation.

Many provinces and territories increased their minimum wage in 2024, and those that haven't did last year. Meanwhile Alberta's inflation rate hit two per cent in August, lowering by 0.7 per cent from the month before and on par with the national average, but still behind the consumer price index of B.C. and Ontario at 2.4 per cent and 2.1 per cent, respectively.

Alberta's Minister of Jobs, Economy and Trade, Matt Jones, said in an emailed statement to CBC News that the minimum wage is an important issue for the Alberta government and that it will continue to monitor and evaluate it.

"Alberta's government understands that significant changes to the minimum wage could negatively impact small businesses, youth and Albertans seeking their first job or part time employment. Further, these changes also affect operational costs, which ultimately flow through to all Albertans," reads the email.

"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.

Modest minimum wage increases

University of Calgary economist Trevor Tombe says gradual changes to minimum wage on a yearly basis through automated inflation indexation and modest increases may be something for Alberta to consider.

"Rather than having long periods where the minimum wage doesn't change at all and then suddenly needs to be reevaluated," he said.

While minimum wage is only marginally higher than Alberta's current rate in provinces like Nova Scotia and New Brunswick, Tombe added that by adjusting minimum wage to inflation, or indexing it to adjust based on the average wage in the economy as a whole, would also be much easier for businesses to adjust to.

"The median full-time wage in Nova Scotia is only $26 [an hour]. So half of that is $13, which means that their minimum wage of $15.20 is actually bigger compared to what workers typically make in those jurisdictions," he said.

As for the Alberta government pointing to its advantage as a jurisdiction for personal low-income taxes,Tombe says that while Alberta taxes in general are lower than certain other provinces, personal income tax depend heavily on how much money an individual makes.

"What makes Alberta different than elsewhere is our first income tax bracket kicks in at a 10 per cent rate, whereas in B.C., for example, the first bracket there is significantly less, at about five per cent. So people earning the minimum wage in Alberta compared to individuals in B.C. do tend to pay more in personal income taxes here than they do there," said Tombe.

"Just on the income tax side, your income has to be sufficiently high in Alberta to really benefit from the low tax environment that exists here."

Tombe says lower income Albertans such as those single income households earning minimum wage wouldn't necessarily be benefiting the same as higher income individuals when compared to provinces like B.C. or Ontario.

Some observersare concerned that Alberta's minimum wage isn't high enough to meet citizens' needs, considering other provinces aren't being hit as hard by various costs associated with living.

Meaghon Reid, executive director of Vibrant Communities Calgary, which is a non-profit organization advocating for poverty reduction strategies, says she's happy to see multiple provinces hiking their minimum wages. Reid believes it's a step in helping citizens keep pace with rising expenses, such as rent and groceries.

"In terms of increasing the minimum wage, we actually know it's not healthy for small businesses particularly to increase it all at once. There has to be a smoothing effect where gradual increases are brought in over time," she said.

"That's why we really need to start looking at this now so that we can start to catch up to the rising cost of living."

According to Alberta's 2023 minimum wage profile, over 60 per cent of minimum wage earners were older than 19. It's why Reid also adds that because the province's minimum wage earners aren't just students and teens, it's important to consider how rising costs impact families.

CBC News reached out to the Alberta NDP for comment on Tuesday, but a spokesperson declined.