Ontario Increases Minimum Wage:  Is It Enough for Newcomers to Live On?

Ontario Increases Minimum Wage: Is It Enough for Newcomers to Live On?

As of October 1, several Canadian provinces, including Ontario, Prince Edward Island, Manitoba, and Saskatchewan, have raised their minimum wage rates. Ontario’s minimum wage, in particular, saw an increase from $16.55 per hour to $17.20. While these incremental increases are designed to keep pace with inflation, the question remains: is this enough for newcomers to Canada, especially in Ontario, to make ends meet?

What the Numbers Say: Minimum Wage in Ontario

According to 2023 Statistics Canada data, the average full-time worker in Ontario works 39.3 hours per week. Based on the new minimum wage of $17.20, this equates to a gross weekly income of approximately $675.96 before taxes and deductions. Most employers in Ontario pay on a biweekly basis, meaning a minimum wage earner would bring in roughly $1,351.92 every two weeks, or around $35,149.92 annually before taxes.

After accounting for income taxes, an individual with this salary would net approximately $29,026 annually, based on estimates from Wealthsimple’s tax calculator. This leaves newcomers in Ontario asking: is this enough to cover the cost of living?

Cost of Living for Newcomers in Ontario

Ontario, particularly its largest city Toronto, is home to a significant number of immigrants. According to the 2021 census, 46.6% of Toronto’s population consists of immigrants, making it a hub for newcomers. Many of them start out renting homes while they work toward buying property. But with rising living costs, can minimum wage workers keep up?

Let’s break down the approximate monthly expenses for a single person living in Toronto:

  • Rent for a one-bedroom apartment: $2,452 (as of September 2024, Toronto Regional Real Estate Board)
  • Groceries: $526.50 (based on numbeo.com data)
  • Utilities (Electricity, Water, Heating, Cooling): $160.44
  • Phone Plan: $56.20
  • Internet: $69.70
  • Public Transportation: $143 for a monthly Toronto Transit Commission (TTC) pass

This brings the total monthly cost of living for a single individual to approximately $3,407.84. Annually, this equals $40,894.08. Even before taxes, the gross income of a full-time minimum wage earner falls short by about $5,744. After taxes, the shortfall is even more significant, at around $11,868.

Strategies for Reducing Expenses

Given these numbers, many newcomers will need to find ways to stretch their income. Some strategies include:

  • Shared accommodations: Renting a room or sharing a larger apartment with roommates can significantly reduce housing costs.
  • Budget shopping: Shopping at discount stores or during sales can cut down on grocery expenses.
  • Choosing affordable plans: Opting for basic phone and internet packages can help minimize these monthly costs.
  • Alternative transportation: Walking, biking, or carpooling instead of using public transportation can save on travel costs.

Newcomers in Minimum-Wage Jobs

For many immigrants, working minimum-wage jobs is a temporary reality, especially as they wait to have their foreign qualifications recognized. In Canada, around 20% of occupations are regulated, meaning they require specific licenses or certifications. However, each province manages these processes independently, leading to delays for newcomers who are often forced to take jobs outside their field.

A 2021 report by Statistics Canada found that between 2001 and 2021, the role of immigrants in low-skilled occupations increased. Immigrants and Temporary Foreign Workers (TFWs) have filled many positions that were once dominated by Canadian-born workers. This trend is likely to continue as more immigrants arrive and navigate the complex credential recognition process.

While Ontario’s recent minimum wage increase is a positive step, it still falls short of meeting the high cost of living in cities like Toronto, especially for newcomers. Although strategies like shared housing and careful budgeting can help, many immigrants may struggle to make ends meet until they can transition into higher-paying jobs. For those waiting for their credentials to be recognized, this challenge can last months or even years. Nevertheless, Ontario remains an attractive destination for newcomers due to its diverse population and economic opportunities, though the path to financial stability may take time.

 

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