Canada’s Federal Minimum Wage Increase 2025 – Everything Employers Need to Know

Effective April 1st 2025, the minimum wage for federally regulated employees increased to $17.75 per hour from $17.30 per hour. The minimum wage increase rate is adjusted in accordance with Canada’s Consumer Price Index (CPI) from the prior calendar year.

In December 2021, changes to Canada’s Labour Code established a federal minimum wage of $15 per hour and introduced an annual increase in line with inflation. The first increase took place on April 1, 2022. 

What is minimum wage? 

Minimum wage is the lowest wage an employer can legally pay their employee. Employers are free to pay more but they cannot pay less than the minimum wage outlined in the Employment Standards Act (ESA). 

Full-time, part-time, interns, casual employees or those paid an hourly rate, commission, piece rate, flat rate or salary, are eligible for minimum wage. If a worker’s pay is based entirely or partly on commission, it must amount to at least the minimum wage for each hour the employee has worked. 

However, some workers in healthcare, hospitality services, transportation and other industries are exempt from the minimum wage provisions of the ESA. 

What is federal minimum wage?  

Federal minimum wage in Canada is the lowest hourly wage a federally regulated employer can pay their employees under the law. The Federally Regulated Private Sector (FRPS) include those employed within the transportation, banking and telecommunications industry, among others.  

Is federal minimum wage for everyone? 

The federal minimum wage is not for everyone, and only applies to federally regulated employees. Examples of federally regulated industries include:

• Banks
• Postal and courier services
• Interprovincial air, rail, road, and marine transportation

If you’re an employer in a federally regulated industry, you must provide the updated minimum wage to your employees.

What happens if the minimum wage in your province is higher than the federal minimum wage? 

If the minimum wage set by the province or territory is greater than the federal minimum wage, federally regulated employers must pay the provincial or territorial wage rate. 

What’s the highest minimum wage in Canada? 

To attract more skilled workers to the territories, the governments of Nunavut and Yukon increased the territorial minimum wage to match the realities of living in these territories. Nunavut’s territorial minimum wage has been increased to $19.00 per hour from $16.00 per hour. Yukon’s territorial minimum wage is now $17.59 per hour from $16.77 per hour.  

Nunavut and Yukon are the only territories to have a higher territorial wage than the federal minimum wage. Hence, federal workers in these territories are entitled to $19.00 per hour and $17.59 per hour, respectively.  

Please note that from April 1, 2025, Yukon's minimum wage also increased to $17.94 from $17.59 per hour.

Do you have questions about the federal minimum wage increase? 

Our experts can help you with any questions related to employee pay and assist you with any HR, health and safety or employment advice you may need. 

As a  trusted HR  and  health & safety consulting company, Peninsula serves over 6,500 small businesses across Canada. Peninsula’s clients receive ongoing updates of their  workplace documentation and policies as legislation changes. They also benefit from 24/7 employer HR advice  and are supported by legal assistance. 

To learn more about how our services can benefit your business, call an expert today at 1 (833) 247-3652.