B.C.'s minimum wage, now tied to inflation, up 45 cents to $15.65 an hour

The British Columbia government is increasing the minimum wage by 45 centsto $15.65 an hour, starting June 1.

The increase is the first to be tied to B.C.'s annual inflation rate, which was 2.8 per cent last year.

Labour Minister Harry Bains says it means B.C. will have the highest minimum wage of any province.

While true, the claim does not include Canada's territories. Nunavut's minimum wage is higher at $16 an hour and the minimum wage in Yukon is set to rise to $15.70 an hour in April.

Bains said the decision to use the provincial rate of inflation rather than the national rate was made to better reflect the needs of B.C. workers.

He said the increase is expected to attract more workers to the province, while providing certainty of costs for businesses.

"We fully understand that businesses are still hurting coming out of the pandemic and that workers, living in one of the highest living cost areas, are still struggling," Bains told a news conference.

"Having a fair minimum wage is a key step in our effort to lift people out of poverty, to make life more affordable and to continue B.C.'s strong economic recovery."

The B.C. Federation of Labour said it was happy with the news, but the minimum wage is "still well below" the amount a family needs to cover basic expenses.

"Every worker should be able to earn a wage that makes their community affordable and livable, no matter where they live in B.C.," Sussanne Skidmore, the federation's secretary-treasurer, said in a news release.

The B.C. Chamber of Commerce said in a statement that while it supported a fair wage for workers, the timing of the increase would negatively impact small and medium-sized businesses.

Bains said a commission travelled the province consulting businesses and others affected by the minimum wage, and it suggested the increase. He said the government is still waiting for the commission's recommendations to address the difference between the minimum wage and a so-called living wage.

'Treading water'

Alex Hemingway, a senior economist with the Canadian Centre for Policy Alternatives, said the wage increase was good news in the broadest sense for the province's lowest-paid workers, but it does not go far enough to address the spiking cost of living.

He said the province's decision to peg the wage increase on the provincial rate of inflation last year measured by the Consumer Price Index(CPI)was not keeping up with the actual cost of living in 2022.

"Over time, linking wages to the CPI would just mean treading water," he told Gloria Macarenko, host of CBC'sOn the Coast. "That would mean that low-wage workers would never get a raise, in real dollar terms, in ... their purchasing power.

"The economy grows over time, and the benefits of those gains are flowing somewhere.But they're not flowing to those workers if their wages only go up at that CPI inflation rate."

University of Victoria economist Elizabeth Gugl says that while increasing the minimum wage according to the previous year's inflation rate is usually appropriate, inflation rates are changing rapidly right now, and the increase doesn't match the current situation.

"Prices are rising and therefore [minimum-wage earners]cannot keep up with the expenses," she said.

B.C. hasforecasteda stronger recovery from the pandemicthan many other Canadian provinces. Hemingway says many low-wage workers in the province are racialized women, so the minimum wage was a significant equity issue, especially with skyrocketing housing costs.

He says one of the only things stopping the provincial government from increasing the minimum wage to proposed "living wage" standards is political will.