The Government of the Northwest Territories (GNWT) is changing the way it calculates and adjusts the territory’s minimum wage.
Beginning September 1, 2023, the minimum wage will be adjusted annually using a formula based on the percentage change in the Consumer Price Index (CPI) for Yellowknife and the percentage change in the average hourly wage (AHW) in the Northwest Territories (NWT) for the preceding calendar year.
As such, beginning in 2023, the minimum wage in the NWT will be adjusted using the established formula on September 1, and annually thereafter, unless otherwise directed by the Minister of Education, Culture and Employment (ECE).
Using CPI as a basis for adjusting the minimum wage rate allows the minimum wage to keep up with the increasing costs for NWT residents, and with other jurisdictions’ minimum wage rates.
Businesses will be able to plan for the minimum wage rate to be adjusted on September 1st each year, and the annual increases will be smaller, which will allow businesses to better absorb the impact of each increase.
ECE will announce the new adjusted rate by August 1st each year.
“Using this new formula to calculate the Northwest Territories minimum wage will result in predictable, measurable, and data driven changes that will provide stability and certainty for the territory’s business community. Adjusting the minimum wage annually will help us keep up with the cost of living in the NWT.”
R. J. Simpson, Minister of Education, Culture and Employment
The Minimum Wage Committee, which provided biannual reviews of the NWT minimum wage and provided options for adjustment to the Minister, will be dissolved.
Many jurisdictions are now adjusting their minimum wage rates annually based on the annual average CPI (or a formula based on CPI). For example, the federal minimum wage, which came into force on December 29, 2021, is adjusted automatically on April 1st every year, based on the average annual increase of the CPI, as reported by Statistics Canada.
The new formula will mean an increase in the minimum wage most years. However, if the percentage change in the CPI or AHW were to decrease below zero in a given year, and the application of the formula resulted in a decrease to the minimum wage, the minimum wage rate would remain the same.
The last increase to the NWT’s minimum wage occurred on September 1, 2021 and represented an increase of $1.74.
Employment and Social Development Canada - Pay and minimum wage, deductions, and wage recovery
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