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The gap between Ontario’s minimum wage and living wage continues to grow.
The minimum wage is a legal floor: the minimum amount the provincial government requires employers to pay workers. Although the rate increase is adjusted for inflation each year, it bears no relation to the cost of living. It is an arbitrary amount. In 2025, the minimum wage for most employees was $17.60, and on October 1, 2026, it will increase to $17.95.
In contrast, the living wage corresponds to the amount workers need to live a decent life. The Ontario Living Wage Network (OLWN) uses a robust calculation framework to estimate how much workers need to earn to afford basic needs like food, shelter and transportation, as well as modest community participation expenses, such as a modest vacation and after-school activities for the children. While collecting expenses for their annual calculation, the OLWN gathers figures for a four-person family with two adults and two children, a single-parent family, and a single adult living alone. The calculation work also accounts for government income supports like the Canada Child Benefit, which boost family incomes, plus any other applicable taxes, transfers and benefits. Since living costs vary across regions—especially rents—the OLWN calculates 10 local living wage rates instead of a single rate for the entire province.
In 2025, living wages across Ontario ranged from $21.05 to $27.60, which is much higher than the $17.60 minimum wage.
The share of all workers earning less than the living wage also varies across Ontario, from 19.6 per cent in Oshawa to 31.1 percent in Peterborough. In Toronto, the province’s largest census metropolitan area (CMA), slightly more than one in five workers (21.4 per cent) take home less than what they need to live a decent life.
The impact of race and gender
As it has been widely documented, women and racialized workers earn less than non-racialized and male workers. This persistent pattern is visible in the living wage findings.
In all CMAs for which data are available, female and racialized workers are more likely than the overall average to earn less than the living wage. Take Hamilton, for example. While the average for that CMA is 20.8 per cent, 23.4 per cent of racialized workers and 25.2 per cent of female workers earn less than the living wage.
It’s even worse for racialized female workers. In Barrie and Sudbury, racialized women are over twice as likely as the average to earn less than the living wage. Over half of Peterborough’s workers earning less than $22.20 are racialized women.
It happens to workers of all ages
Those who publicly oppose minimum-wage increases often argue that it is mostly young people who earn the floor wage. Most people get better-paying jobs as they grow up and gain workplace experience, the argument goes. That’s a myth. People of all ages earn the minimum wage. As shown in Table 2, the share of workers 55 and older earning less than the living wage ranges between 13.4 per cent and 22.4 per cent across Ontario.
The gap is growing
The minimum wage increased by 40 cents in October 2025, from $17.20 to $17.60. In the same year, the living wage increased by much more, in almost all census metropolitan areas, widening the gap between what employers are legally allowed to pay workers and what workers need to earn.
The obvious remedy to working poverty
When the next minimum wage increase goes into effect on October 1, 2026, workers across the province will take home a little more pay, but not enough to provide their families with a better standard of living. The new rate of $17.95 is well below a living wage and, in most cities, further below than it was last year.
The decision to keep the rates low is a political one. The minimum wage is an arbitrary amount that is not based on any calculation or standard. Governments can hike, adjust, or freeze rates, depending on whose interests they choose to prioritize. In 2018, the newly elected Progressive Conservative Party (PC) repealed many provisions in Bill 148 (Fair Workplaces, Better Jobs Act, 2017), including a minimum wage increase scheduled to take effect in January 2019. Worse still, the new government froze the rate until October 2020. Since then, the rate has been adjusted for inflation a few times, but the amount is now too low, and the cost of living is rising too fast.
Rents are a major driver of cost-of-living increases, and are captured in living wage rate updates. Here too, government decisions have failed to prioritize low-wage workers. In 2018, the Ontario government exempted newly occupied units from rent control, while failing to re-enact vacancy control. This means that in a growing number of rental units, rents rise above inflation from one year to the next, and once a tenant leaves, landlords raise rents by however much they want.
The 2018 minimum wage freeze, coupled with the weakening of rent control, dealt a double blow to low-wage workers and working families across Ontario. Poverty—measured in various ways—has increased in recent years as a direct result of these policies.
This is a sad portrayal of the choices made in recent years—of the provincial government’s unwillingness to prioritize the well-being of low-wage workers, including a disproportionate share of female and racialized workers. But there is a silver lining: the solution is obvious.
The provincial government should raise the minimum wage to the living wage rate – a single change that would considerably improve the lives of more than 1.5 million workers in Ontario. That measure would go further in reducing working poverty if paired with regulatory changes that halt price gouging in rental housing and groceries. All it takes is a provincial government that puts workers first.
About the authors
Ricardo Tranjan
Ricardo Tranjan directs the research program for the CCPA-Ontario. Ricardo’s expertise centres on Ontario public finances and the political economy of social policy, especially public education funding, income support programs, and rental housing. He is the author of multiple books, including The Tenant Class (2023).
Anne Coleman
Anne Coleman is the Executive Director for the Ontario Living Wage Network. She has been with the OLWN since its inception in 2017, and prior to that with Living Wage Waterloo Region. Anne believes in reducing poverty through paid work and is dedicated to raising wages in Ontario.
