Employers shift from base salary to total rewards as wage disparities persist across Canada
As of April, Canada's minimum wage landscape presents significant disparities across provinces, impacting compensation strategies for employers and plan sponsors.
While the national average hourly wage stands at $35.99, certain provinces maintain minimum wages less than half this average, influencing labor market dynamics and employee retention efforts.
A 2024 survey reported by Benefits and Pensions Monitor, involving over 430 Canadian organizations, revealed that salary increase budgets for 2024 were fixed at an average of 3.6 percent, aligning with initial forecasts made in the summer of 2023.
This stability in salary budgets underscores the importance for employers to strategically allocate compensation resources to remain competitive in attracting and retaining talent.
Top 5 Canadian Provinces with the Lowest Minimum Wage (as of April)
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Alberta – $15.00/hour
The minimum wage has remained unchanged since October 1, 2018, with no announced plans for an increase.
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Saskatchewan – $15.00/hour
Effective October 1, 2024, the province implemented this rate, with future adjustments tied to the Consumer Price Index (CPI).
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New Brunswick – $15.65/hour
Increased on April 1, as part of the province's annual CPI-based adjustment mechanism.
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Nova Scotia – $15.70/hour
Raised on April 1, with a scheduled increase to $16.50 on October 1, reflecting the province's commitment to regular wage reviews.
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Quebec – $15.75/hour
Set to rise to $16.10 on May 1, continuing the province's trend of annual minimum wage increases.
These provinces' lower minimum wages, relative to the national average, present both challenges and opportunities for employers.
While lower wage floors can reduce labor costs, they may also necessitate enhanced benefits and compensation packages to attract and retain skilled workers.
Further insights from Benefits and Pensions Monitor indicate that employers are increasingly focusing on non-salary compensation elements.
A March 2024 survey highlighted that compensation budgets are trending downward, with 2025 compensation spend likely to be less concentrated in base salaries and more on other program elements highly valued by employees.
This shift emphasizes the growing importance of comprehensive benefits packages, including health benefits, retirement plans, and flexible work arrangements.
For plan sponsors, these trends underscore the necessity of a holistic approach to employee compensation.
In regions with lower minimum wages, offering competitive benefits can be a key differentiator in the labor market.
Moreover, staying informed about provincial wage adjustments and aligning compensation strategies accordingly can enhance employee satisfaction and organizational performance.
