Student Author: Written by Sara Tatelman, 3L, University of Toronto Law School
It’s more expensive to live in Vancouver than in Fort Nelson, in Toronto than in Kapuskasing. Yet in Canada, the provinces and territories set minimum wages, none of which differentiate by region. So a cashier who pays $1,500 for half of a two-bedroom apartment in Kitsilano makes the same as one who pays $400 for the same square footage in the Northern Rockies.
Canadian minimum wage law was not always so overbroad. In 1918, Manitoba created a minimum wage board to determine the wages for women working in all urban shops, mail-order houses and factories. It set minimum wages that differed by industry, experience and, in some cases, by geography. For instance, paper-box factory workers in Winnipeg earned at least $11 per week. Those in Brandon earned $9, and those in Dauphin, $8.50.
In 1920, Ontario created its first minimum wage board. But instead of setting different wages for various cities as Manitoba had done, the board divided the province into four regions. First was Toronto, where experienced adult women at paper-box factories earned at least $12.50 per week. Next were other cities with populations greater than 50,000, where the weekly minimum wage was $11.50. Third came communities with populations between 5,000 and 50,000, where the weekly minimum wage was $11. And finally, in the rest of the province, the minimum wage was $10 per week. All in all, there was a 20% difference between the highest and lowest minimum wages for the same work, by the same type of worker.
One can only assume this was because it was always more expensive to live in Winnipeg than in Dauphin, in Toronto than in Kingston, and in Kingston than in Espanola. After all, the Manitoba minimum wage board was tasked with determining “what wages are adequate to supply the necessary cost of living to employees and to maintain them in health.” Similarly, the Saskatchewan board investigated the required weekly wage for “a girl dependent on her own earnings … to live in reasonable comfort.” (It settled on $15.) Minimum wage, it seems, has always been about the cost of living.
Some American cities have instituted minimum wages higher than that of their states. In Washington State, the 2020 minimum wage is $13.50, but Seattle has passed a municipal ordinance raising minimum wage up to $16.39 for large employers, and $15.75 for small ones. Similarly, the city of SeaTac raised its 2020 minimum wage to $16.34 for hospitality and transportation industry workers. All three jurisdictions raise their minimum wages each year based on the consumer price index. Currently, 52 American cities and counties have their own minimum wage ordinances.
Beginning with New Westminster, B.C. in 2010, various Canadian cities have passed policies that require all municipal employees, as well all those working for firms contracted and subcontracted to the city, to receive a living wage.But no Canadian municipality has passed a bylaw like Seattle’s or SeaTac’s that raises the minimum wage for all employees working within the city limits, though their empowering statutes often suggest they could do so.
In Ontario, the City of Toronto Act and the Municipality Act recognize that a municipality’s purpose is to provide good government on matters in its jurisdiction. In British Columbia, the Community Charter states the purpose of a municipality includes “fostering the economic, social and environmental well-being of its community”, while the Vancouver Charter allows city council to “provide for the good rule and government of the city”. In Spray-Tech Inc. v. Town of Hudson, the Supreme Court cautioned that municipal general welfare powers such as these “do not confer an unlimited power.” Bylaws must have a reasonable connection to the municipality’s permissible objectives, which are generally to advance residents’ health, safety, welfare and good government. Creating a higher minimum wage within city limits seems to fall squarely within such objectives, as it aims to improve the ability of local workers to live in their communities.
Further, in her strong dissent in Shell Canada Products Ltd. v. Vancouver (City), McLachlin J. found that courts should respect elected municipal councils’ decisions on what best serves their citizens: “Barring clear demonstration that a municipal decision was beyond its powers, courts should not so hold.”
Municipalities need not rely on their general welfare powers to create higher minimum wages for employees working within city limits. Ontario’s acts permit municipalities to pass bylaws regarding the “health, safety and well-being of persons”. The Community Charter permits municipalities to regulate public health issues, and the Vancouver Charter permits council to pass bylaws “for providing for the care, promotion, and protection of the health of the inhabitants of the city”. There is a close connection between income and well-being, as without sufficient funds, people often face food insecurity and precarious shelter, which in turn lead to severe health problems. Cities therefore clearly have the authority to pass bylaws regarding the minimum wage within their geographic limits.
Provinces could also create regional minimum wages, as Ontario did a century ago and as New York State currently does. In 2020, the minimum wage in New York City is $15, while it’s $13 in Long Island and Westchester, and $11.80 in the rest of the state. Provincial and territorial governments may resist such a model, fearing accusations of favouritism for workers in large cities or employers in small ones. In New York, Gov. Andrew Cuomo won his wage agreement by conceding to a much slower phase-in period for outside New York City. This appeased certain Republican representatives, but caused some publications to note the gap between Cuomo’s self-laudatory speeches on the $15 wage and the fact that many New Yorkers do not yet benefit.
Regional minimum wages could cause businesses to move to neighbouring communities with different bylaws. But a recent Statistics Canada survey found that in 2018, 32.7% of all minimum wage workers worked in retail, and another 26% worked in accommodation and food services. These are not industries that can easily move to another city. Few Torontonians will drive to Hamilton to buy their groceries every week, and no tourist visiting Vancouver will happily book a hotel room in Chilliwack. Unlike factories, proximity to customers is key for stores, restaurants and hotels. They must stay in cities to get residents’ and visitors’ business, so there is little danger of losing significant minimum wage jobs to other communities.
If the purpose of minimum wage is to ensure that workers can afford to live in their communities, as it was a century ago, there should be higher minimums in more expensive areas. Whether that is best accomplished by provincial or municipal legislation is still up for debate. But when one province includes sprawling cities and small towns with very different costs of living, we cannot pretend that same minimum wage works across them all.
Sara Tatelman, “The Case for Sub-Provincial Minimum Wages” Canadian Law of Work Forum (April 20 2020): https://lawofwork.ca/?p=12356
Kathleen Derry and Paul H. Douglas, “The Minimum Wage in Canada” (1922), 30 Journal of Political Economy 2 at 173.
Ibid at 181.
Ibid at 172, 175.
City of SeaTac, “City of SeaTac Announces 2020 Minimum Wage Adjustments” (11 October 2019), online: City of SeaTac.
U.C. Berkeley Labor Centre, “Inventory of US City and County Minimum Wage Ordinances” (13 February 2020), online: UC Berkeley.
City of Burnaby, “City of Burnaby to Seek Living Wage Employer Certification” (25 June 2019)
City of Toronto Act, SO 2006, c. 11 s. 1; Municipal Act, 2001, SO 2001, c. 25, s. 2.
Community Charter, SBC 2003, c. 26, s. 7(d).
Vancouver Charter, SBC 1953, c. 55, s. 189.
Ibid at 26.
Shell Canada Products Ltd. v. Vancouver (City),  1 SCR 231 at p. 241.
City of Toronto Act, supra note 10 at s. 8(2); Municipal Act, supra note 10 at s. 10(2)
Community Charter, supra note 11 at s. 8(3)(i).
Vancouver Charter, supra note 12 at s. 330(a).
Jesse McKinley and Vivian Yee, “New York Budget Deal With Higher Minimum Wage Is Reached” (31 March 2016), online: New York Times; Annie McDonough, “Which New Yorkers don’t get a $15 minimum wage?” (18 April 2019), online: City & State New York
Dominique Dionne-Simard and Jacob Miller, “Maximum insights on minimim wage workers: 20 years of data” (11 September 2019), online: Statistics Canada