Albertans making minimum wage at full-time jobs don’t make enough to get out of poverty and still don’t qualify for a host of government benefits.
by Lee Stevens. Originally published on Policy Options
August 6, 2024
Canada faces a mounting cost-of-living crisis that makes it difficult for more and more people to make ends meet. While federal measures like interest rate adjustments can control inflationary costs to some degree, provincial governments play a role when they set the wages of workers at the lower end of the income spectrum.
Take Alberta, one of the richest provinces in the country. Some workers are struggling to meet day-to-day needs because, despite having full-time jobs, they are paid a minimum wage that is simply not enough.
The province’s minimum wage is $15 an hour and has been for the last six years. It’s $13 an hour for students under 18. Almost 163,000 Albertans were receiving the basic rate in 2020 the year the government stopped publishing minimum-wage numbers. By the end of 2024, Alberta, Saskatchewan and New Brunswick will have the lowest minimum wages in the country.
Although Canada has transfers and benefits to help people meet their basic needs, minimum wage workers often don’t qualify. Most government benefits are reserved for those with very low incomes, sometimes below what one can earn from working full-time on minimum wage.
What’s more, the eligibility income thresholds are often not based on poverty lines and many are not indexed to inflation. That means more people become ineligible for the benefit over time. This reality is making the affordability crisis worse and causing considerable strain on the social service sector with food banks bearing the brunt.
The tables below compare the annual salary of a single person working full time at minimum wage in Alberta against living expenses and eligibility criteria for relevant government benefits at the municipal, provincial, and federal levels.
Table 1 shows living expenses in Calgary outstripping what that single person earns. Costs are taken from The Alberta Living Wage Network’s 2023 living wage report.
Table 2 shows that same single person is ineligible for most low-income benefits, except for three offered by the federal government and one (rental assistance) offered by the Alberta government.
The eligible federal benefits include the GST credit, the grocery rebate, the carbon rebate and the Canada workers benefit for $2,454 annually in government support. However, as shown in Table 1, that still leaves a shortfall of almost $10,500 a year.
It should be noted that according to the Alberta government, the wait-list for provincial support for affordable housing sat at 24,000 in 2021.
The Fair Entry program, offered by the City of Calgary, is intended to support low-income citizens by offering subsidized rates for seven different services, including public transit, home maintenance and property tax assistance.
In addition, the adult health benefits the province offers to low-income households without employer health benefits, provide coverage for services not covered by Alberta Health Care insurance, including regular dental visits, vision services and ongoing prescription drug coverage.
Alberta’s income support program — which helps struggling Albertans pay for basic expenses like food, shelter and clothing — allows people to work while receiving benefits. But the “earned income exemptions formula” reduces benefits so sharply, they almost vanish completely before a person’s income even approaches the poverty line.
The goods and services/harmonized sales tax (GST/HST) credit is one of the only benefits available to single working-age adults. It is a tax-free quarterly payment that helps individuals and families with low and modest incomes offset the GST or HST that they pay.
Behind the numbers are minimum-wage workers who are faced with an impossible scenario: unable to meet their most basic needs while at the same time ineligible for benefits intended to help those who are struggling.
All Canadians should be entitled to an hourly wage that covers their basic expenses and allows them to participate in their community. Calgary’s living wage has been determined to be $23.70 an hour.
The minimum wage is an income floor for working people and ought to be calculated with the cost of living in mind. When people earn a wage that is sufficient to meet local costs, they are better equipped to fully participate in society, thrive, stay healthy and build their human and financial assets.
Note: The author thanks Ryan Lacanilao, co-ordinator for the Alberta Living Wage Network, for his help with this article.
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This article first appeared on Policy Options and is republished here under a Creative Commons license.