In Canada, the minimum wage is the lowest hourly rate an employer must pay their employees. Each year, the government reviews and adjusts this rate according to the Consumer Price Index (CPI) and cost of living. In 2025, the minimum wage was increased by 2.4%, bringing it to $17.75 per hour. This update took effect in August 2025 and applies across the country to employees in the private sector, including industries like banking, postal services, transportation, and telecommunications.
While $17.75 is the federal minimum wage, several provinces and territories set their own rates, which can be higher. For example, British Columbia is set to raise its minimum wage to $17.40 from August 2025.
Overview of 2025 Increase
| About | Details |
|---|---|
| Country | Canada |
| Authority | Canada Revenue Agency |
| Year | 2025 |
| Minimum Wage | $17.75/hour |
| Overall Increase | 2.4% |
| Basis for Increase | CPI (Consumer Price Index) & COLA |
| Effective Date | 1 August 2025 |
| More Information | canada.ca |
Annual Calculation of Minimum Wage
The minimum wage in Canada is reviewed yearly to ensure fair pay in line with economic conditions. The calculation considers:
- The previous year’s Consumer Price Index
- Cost of living adjustments
- Regional economic conditions and wage differences in provinces and territories
Since each province and territory can set its own rate, workers should check the local minimum wage for their area, as it might be higher than the federal rate.
Reasons for the 2025 Increase
The 2.4% increase to $17.75 in 2025 is linked to:
- Rising living costs and inflation pressures on workers
- Demands from labour unions and worker advocacy groups
- The goal of maintaining economic stability and improving the job market
- Government policies to ensure that wages reflect basic living expenses
Disclaimer
The federal minimum wage is reviewed and adjusted annually. The current 2.4% increase was implemented on 1 August 2025. Many provinces and territories set higher rates, so workers should verify their region’s specific rate. For the latest updates, visit the Canada Revenue Agency’s official website.
FAQs
What is the federal minimum wage in Canada for 2025?
It is $17.75 per hour effective August 1, 2025.
How much was the 2025 increase?
It was a 2.4% rise from the previous year.
Do provinces have different rates?
Yes, some provinces set higher wages than the federal rate.
What factors determine wage increases?
Consumer Price Index and cost of living adjustments.
When is the next review of minimum wage?
It is reviewed annually based on economic conditions.
