In April 2025, an amendment to the Wages Regulations under the Labour Standards Act was registered bringing notable changes to how minimum wages are set and adjusted in the territory. This regulatory update, made under the authority granted by section 14 of the Act, replaces section 5 of the existing regulations and introduces a revised framework for determining the minimum wage. The revised section defines two key economic indicators that are now central to the wage calculation process: the “annual average hourly rate of wages” and the “consumer price index” (CPI). The former refers to the average hourly earnings of hourly paid employees in Nunavut, excluding overtime, within a defined industry category, as published by Statistics Canada. The CPI is the annual average of all-items inflation for Iqaluit, also sourced from Statistics Canada. Both indicators are based on calendar-year data and are crucial inputs for the formula that determines wage adjustments.

The amendment establishes that, effective immediately, the minimum wage in Nunavut is set at $19.00 per hour until August 31, 2025. Starting on September 1 of each subsequent year, this rate will either increase or remain the same, depending on the outcome of a specific calculation. If the calculated adjusted minimum wage is higher than the current rate, it becomes the new minimum wage; if not, the rate remains unchanged.

The calculation of the adjusted minimum wage is governed by a formula that integrates both wage growth and inflation trends. It combines the average hourly wage data from the previous two calendar years and the corresponding CPI values to create a multiplier applied to the existing minimum wage. Specifically, the adjusted rate (AMW) is determined by taking the average of the previous two years’ average hourly wages and the average of the previous two years’ CPI values, then multiplying that combined factor by the prior year’s minimum wage.

To ensure transparency and give employers and employees sufficient notice, the regulation also mandates that the Minister must publish the updated minimum wage by July 31 each year. This requirement is significant because it formalizes the communication process and ensures that all stakeholders are informed of any upcoming changes at least one month in advance of their implementation.

The new regulation reflects a modernized approach to labour standards, aligning wage-setting practices with empirical economic data and providing a structured mechanism for annual updates. It aims to reduce uncertainty around wage increases and links worker compensation more directly to both local economic performance and inflation. This change is particularly relevant in Nunavut, where high living costs and wage disparities have been long-standing concerns. By institutionalizing a system that responds to real-world economic indicators, the amendment is intended to support the financial well-being of workers while providing employers with a consistent and predictable framework for labour costs.

Nunavut (020-2025) April 30, 2025
Disclaimer: Insights are for informational purposes only and do not reflect RRI’s official position or constitute legal opinion