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Labour Views: Living in the North is becoming unaffordable

May 25, 2022

On June 3, 2015, I wrote a labour views column about minimum wage in the Northwest Territories

Two days prior the GNWT had raised the minimum wage in the NWT from $10 per hour to $12.50. That works out to around $26,000 per year working a 40 hour workweek. By 2018, the NWT minimum wage had crept up to $13.46 per hour – an increase of 96 cents per hour.

Fast forward to September 2021 when the territorial minister of ECE – with great fanfare – increased the minimum wage to $15.20 per hour… after they’d spent the past year or so topping up wages for workers at small businesses struggling to retain employees during a pandemic to $18.00 per hour.

Sadly, this underwhelming increase came as no surprise to northern labour organisations. As the UNW has experienced directly over five decades of representing northern workers, the GNWT doesn’t have the best track record when it comes to keeping up with inflation.

This is an issue that arises during every round of collective bargaining when regular workers have to fight tooth and nail for incremental increases, while being portrayed as greedy. Really, if workers are to actually benefit, annual increases should exceed the cost of living, even if only by a small percentage. Otherwise they are just standing still.

This past April, the federal government started to show some progress in this area with a new federal minimum wage of $15.55 per hour that will be adjusted automatically on April 1 of every year.

The increase will be based on the average annual increase of the Consumer Price Index, as reported by Statistics Canada. The Federal minimum wage only applies to workers and interns in federally regulated private sectors.

According to the feds, this raise “is to ensure that the federal minimum wage keeps pace with inflation. This year’s rate increase reflects the 3.4 per cent annual average rise of the Consumer Price Index for Canada in the previous calendar year.”

This will mean the recently introduced minimum wage in the NWT – which has one of the highest costs of living in the country – is already below what the Federal Government considers the baseline average minimum wage in Canada. And they wonder why the north has trouble retaining workers.

Whenever UNW members head into bargaining, their bargaining team keeps a close eye on the territory’s rising inflation rates. As of April 2022, Canada’s annual inflation rate is sitting at 6.8 per cent, the highest since January, 1991. According to Statistics Canada, the NWT’s annual inflation rate just hit 7 per cent.

In addition to the ongoing economic effects of the Covid-19 pandemic, the world is starting to feel the rising food and commodity costs resulting from Russia’s invasion of Ukraine. Here at home, the NWT’s housing crisis – combined with rising power rates, fuel costs, and other essentials – is making living in the north increasingly unaffordable.

Worker retention is a huge threat to all employment sectors in the North. The majority of workers in the NWT were born and/or raised here, and this is their home. A home where many can no longer afford to live.

On March 30, Alternatives North – a local non-profit organization – released their living wage report. A living wage is the minimum amount someone needs to earn to afford basic necessities such as shelter, clothing, childcare, and food.

The report showed that the lowest cost of living in the NWT – Fort Providence, at $17.61 per hour – is well above the GNWT’s minimum wage. Sachs Harbour requires the highest living wage, at $24.90 per hour. That is $9.70 per hour more than minimum wage.

As rates, costs, and inflation continue to rise, the Government of the Northwest Territories will be facing some tough decisions when the next budget comes around. When weighing their priorities, they must remember that NWT residents – and their spending power – are the biggest driver of our economy.