Ontario increases minimum wage. Is it enough to live on as a newcomer?

Ontario, Prince Edward Island, Manitoba, and Saskatchewan have all increased the legal minimum hourly wage paid to workers as of October 1.

Most increases are incremental and tied to the rate of inflation. For example, in Ontario, the minimum wage has increased from $16.55 an hour to $17.20.

The average income of a person making minimum wage generally depends on the number of hours they work each week. Statistics Canada data for 2023 shows that the average actual hours per week worked by a full-time employee in Ontario is 39.3. Assuming these are all paid hours (not accounting for unpaid breaks), this means that before tax and other deductions, employees making minimum wage can expect to gross $675.96 each week.

Discover if You Are Eligible for Canadian Immigration

Most employers in Ontario pay their employees every two weeks, so on average, a full-time wage worker will gross $1,351.92 per paycheck. A part-time employee can expect much less.

If that is expanded to 26 pay periods a year (52 weeks a year divided by 2), minimum wage employees can now expect on average a gross income of approximately $35,149.92 a year.

However, according to Weathsimple’s income tax calculator, an employee in Ontario with that average annual salary will net (take home) $29,026 (assuming they have no other income, investments or an RRSP).

So, can you survive on a full-time minimum wage job in Ontario? This is relevant to many newcomers, especially those who immigrate without a job offer and need to find work quickly to support themselves or, in some instances, require proof of income to help them find accommodation.

Cost of living for newcomers in Ontario

Census data from 2021 found that 46.6% of Toronto’s population is made of immigrants, making it the city in Canada with the most newcomers. Newcomers are also more likely to rent when they first arrive in Canada while they save to buy a home.

Pulling information from a few different sources, here is a picture of the cost of living in Canada’s largest city as single person living alone. Other locations in Ontario, and Canada, may be less expensive.

Note: this is an approximation and the cost could vary.

• Average rent for a one-bedroom apartment: $2,452 as of September 2024 (TRREB)
• Monthly cost of groceries for one person: $526.50 (numbeo.com)
• Utilities (Electricity, Heating, Cooling, Water): $160.44 (numbeo.com)
• Phone Plan: $56.20 (numbeo.com)
• Internet: $69.70 (numbeo.com)
• Public transport: $3.30 per trip or $143 for a monthly adult TTC pass (ttc.ca)

This means the average cost of essentials comes in around $3,407.84 each month for a single person living alone in Toronto, or $40,894.08 per year. This is more than $5,000 more than the gross average annual income of a person making minimum wage, or over $11,000 more than their net average annual pay.

There are ways to reduce this cost, such as shared accommodation, shopping grocery sales, selecting the least expensive phone or internet plans possible, or choosing to walk instead of using public transit or ride shares.

Newcomers in minimum-wage roles

It is also often a reality for newcomers who are waiting to have their foreign credentials recognized to find themselves in minimum wage positions for a time. Government data says that 20% of all occupations in Canada are regulated occupations that require a license or certificate to work in Canada.

Each province has their own licensing authorities for these professions, which means there is no national data for how long it will take newcomers to have their credentials recognized when they arrive in Canada. In the meantime, these newcomers will often need to work in jobs that fall outside the scope of their trained professions, many of which are paid minimum wage or just slightly above.

In fact, another Statistics Canada report earlier this year found that between 2001 and 2021, “the role of immigrant workers in low-skilled occupations has increased. Together with TFWs, they filled some of the low-skilled jobs that previously would have been occupied by Canadian-born workers.”

Discover if You Are Eligible for Canadian Immigration