Closing the gap to the living wage: Prince Edward Island needs to stay the course

This is a joint submission on behalf of the Canadian Centre for Policy Alternatives– Nova Scotia, and MacKillop Centre for Social Justice.

We appreciate the opportunity to provide input on the current minimum wage review and the process for setting it in Prince Edward Island. Our detailed submission outlines reasoning and evidence to support key recommendations to ensure that the minimum wage provides sufficient protection for workers on P.E.I.. 

We also encourage Islanders to reach out to the Minimum Wage Review Committee and share their thoughts via email to [email protected]. Just be sure to include “Minimum Wage Review Feedback” in the subject line. The last day for submissions is October 30th, 2026.

1. Substantially increase the minimum wage to $20 in three years.

The current minimum wage does not sufficiently reflect the cost of living as captured by Prince Edward Island’s living wage calculations. We recommend implementing a plan to raise the base to $20 within the next three years and continue monitoring the gap between it and the living wage.

While the living wage includes a regional breakdown, the minimum must be sufficient to cover the highest costs in the province. As we outline in our living wage reports (2026 is forthcoming), we could do more to address regional inequities through investments in public services, affordable housing, affordable transportation, and more. We do not recommend regional minimum wage rates, which could intensify disparities; instead, we recommend that the provincial minimum better reflect costs. The living wage report also includes a provincial weighted living wage average based on where the population resides. In 2025, that provincial living wage was $22.77, which leaves a significant gap, which has increased in 2026 (report forthcoming). 

A significant minimum wage increase is a crucial response to the living wage gap.

Arguments against raising the minimum wage lack empirical support. Businesses often oppose minimum wage increases, claiming they will have no choice but to raise prices, which will increase inflation or lead to job loss. Since the 1990s, real-world evidence shows that even significant minimum wage increases have little to no effect on job loss. In Ontario, a significant minimum wage increase led to employment growth even in sectors known for low wages and precarious work; overall unemployment fell, wages rose, and racialized workers saw significant gains in particular. As for inflation, businesses pass on only a fraction of the increase in labour costs through higher prices; the extent depends largely on demand and supply, not a simple cause-and-effect relationship. Broader macroeconomic factors overwhelmingly determine costs and employment levels. 

Providing workers with a living wage improves their health and their ability to bring their best to the workplace. We should also recognise the negative impacts of a low-wage economy on government revenue and expenditure, and on society; when workers are stressed, it takes a toll on their health and increases their need for health care. For employers, ample evidence shows that living-wage employers benefit from lower turnover rates and thus lower training costs, and they find it easier to recruit and retain employees who take fewer sick days

Substantially increasing the minimum wage can also help reduce income, gender, and racial inequality. While 5.18 per cent of P.E.I. people work for the minimum wage during 2025, another 24.3 per cent work below $20 an hour. ¹Calculations based on Statistics Canada’s Labour Force Survey (LFS) Public Use Microdata Files (PUMF), January-December 2025, www150.statcan.gc.ca/n1/en/catalogue/71M0001X. Minimum wage rates are from the Government of Prince Edward Island. The hourly rate was $16.00 from January to September 2025 and $16.50 from October to December 2025: Government of Prince Edward Island. (2026). “Minimum Wage Orger (Board and Lodging).” www.princeedwardisland.ca/en/information/workforce-and-advanced-learning/minimum-wage-order-board-and-lodging

Lifting low-wage workers’ wages recognizes that there are disproportionately more women and racialized workers earning below this amount (almost 60 percent of those earning minimum wage are women, and 25.6 percent of employed women earned less than $20 an hour, compared to 23 per cent of men).

The minimum wage review should seek to advance gender equality and non-discrimination wage policies. As the CCPA report shows, even though P.E.I. has one of the lowest gender pay gaps when it comes to hourly wages, there is a gap that is still significant when considering annual income. The gap is largest for non permanent residents. The government should also strengthen pay equity, by extending it to the private sector.

2. Establish a minimum wage formula that reflects the cost of living and work effort.

It is time to think more holistically about the minimum wage rate. Ensuring the base wage is not eroded by inflation is important, but not having your income erode is also not getting ahead. Furthermore, adjusting a base rate that is too low only by inflation is insufficient. A minimum wage that leaves full-time adult workers with too little income to cover basic expenses is not doing its job. 

The current plan for Prince Edward Island’s minimum wage, which is currently $17.30, is to increase to $17.60 on April 1, 2027. Once it reaches $20, we recommend adjusting it using the province’s annual overall Consumer Price Index, or the annual provincial average of combined CPI food and shelter costs, whichever is higher, plus one percent. The additional percent recognizes that adjusting for inflation only prevents wage erosion and does not provide gains for these workers, which would also help narrow the gap between the minimum and the living wage. Regular, annual reviews are critical, but the struggles of low-waged workers are not just about the hourly minimum wage amount. 

3. Strengthen all labour standards. 

The minimum wage should be strengthened alongside other labour standards, and while P.E.I. recently made some changes, more is needed. For example, workers should never have to provide a medical certificate to take short-term sick leave; it burdens healthcare professionals. The goal should be to ensure access to paid leave to support sick individuals to not go into work. We need to consider how employers can better support workers’ health and well-being more broadly—especially if the aim is to retain employees. This includes providing more paid vacation leave (note that Quebec just added a third week of vacation), as well as leave to care for loved ones, attend medical appointments, manage personal responsibilities, and take sick leave (with the choice left to the worker). Trust is key.

Regarding the standard work week, it is undeniably important to lower the threshold for overtime pay; at 48 hours, Prince Edward Island had the longest work week in Canada (tied with Nova Scotia). 44 hours is an improvement, but still very long; we recommend the regular work week should be no longer than 40 hours. We must remain vigilant about actual hours worked. We do not want employers to try to avoid paying overtime by hiring more part-time workers instead. What is particularly concerning about the current trend toward “task-based” or precarious work is that employees have no guaranteed hours; any reforms should address this.

Labour standards are minimum standards for workers, designed to improve working conditions and reduce precariousness. When governments speak of “striking a balance,” we must remember that employers already have significant leeway and power, and these standards are meant to rebalance. Workers deserve better protection. The government must ensure these standards apply to all employees (no matter the industry or immigration status). The government should also proactively enforce these standards, rather than in response to individual complaints.

We recently outlined changes needed for Nova Scotia, many of which would apply to P.E.I., including more paid leave, and removing incentives for hiring part-time or gig workers. The government should also conduct research, consult with the public, workers, unions, community organizations, and businesses, and develop recommendations to ensure employment standards keep up with changing labour market conditions, including issues such as “gig” workers, AI, and just transition processes.

4. Supporting low-waged workers beyond raising the minimum wage.

There are often proposals from business owners that there are better ways to support minimum wage workers than raising the minimum wage. We would argue that there are policies and programmes that would complement increasing the minimum wage, to get at some of the root causes and strengthen support to these low-waged workers, including stronger labour standards. However, given P.E.I.’s perennially low average wages, it is also critical to work towards broader policies that will support economic security for everyone. 

We do not advocate using the tax system, and tax cuts, as the road to affordability for these workers. Across the board tax cuts such as further raising the basic personal amount, do not sufficiently help these workers, while resulting in a significant loss of revenue that could be used to strengthen public services, and other income transfers, as we outline in our living wage reports. The P.E.I. Child Benefit, and the P.E.I. Essentials Benefit, are excellent mechanisms that could be further enhanced, providing more assistance to those who are struggling when their wages are insufficient. We also underline the importance of further expanding public services, including public health care, investing in making transit more available and accessible, expanding non-profit child care, and funding non-market affordable housing (co-ops, social housing). The government also has a mechanism to cap rental increases that should continue to be strengthened, along with improving tenants rights. As is outlined in the CCPA submission about this cap, Islanders deserve a rental freeze. 

These low waged workers need more income security, but they also need a safety net that will support them. 

5. Utilize more robust data to inform decisions.

To design and implement an adequate minimum wage policy, the government needs more timely, robust, reliable data. Data should support an evidence-based approach enabling an intersectional analysis of labour market impacts, including by gender, race, residency status, and ability. The only race-based income and work-related data at a provincial level is from the Census. The labour market survey provides only Atlantic regional data disaggregated by race, but not by province.The government could invest more in provincial data collection or oversample national data as needed, supporting and building a local database accessible to the public, like Newfoundland and Labrador’s Community Accounts. 

Submission of the Canadian Centre for Policy Alternatives–Nova Scotia and MacKillop Centre for Social Justice. 

The Nova Scotia office of the CCPA opened its doors in 1999. With the help of our loyal supporters and research associates, we continue to raise debate and propose policy alternatives that will get us closer to achieving a more economically and socially just—as well as environmentally sustainable—province and Atlantic region.

The MacKillop Centre for Social Justice is a community and advocacy organization based on Prince Edward Island with a focus on the social justice issues faced by Islanders.