Understanding Living Wage: Impact and Calculation Methods

1. 2019 NWTLiving Wage M. Haener Consulting Services Mhaener@telus.net March 2019

2. Presentation Outline • What is Living Wage (LW)? • What is the purpose of LW? • How is LW calculated? • What is the NWT LW? • What is the level of Annual Expenses, Government Transfers, and Taxes? • What is the LW in other communities?

3. What is Living Wage? “… the hourly rate at which a household can meet its basic needs, once government transfers have been added to the family's income and deductions have been subtracted” (Living Wage Canada, 2015) Based on “…the amount of income an individual or family requires to meet their basic needs, to maintain a safe, decent standard of living in their communities (Vibrant Communities Calgary, 2012) • Incorporates a bare-bones budget which includes: • food, clothing, rent, transportation, child care, health care, adult education, some household expenses, and a small emergency fund.

4. What is the purpose of LW? • Information for community • Amount of income required to meet basic needs • Indicator of living cost changes • Indicator of local impact of government transfer programs • Community–based policy or programs • Municipal LW policy/bylaws • Municipal low-income access/affordability programs • Advocacy • Increase support for working poor • Higher minimum wages • Benefits of paying LW and/or participation in LW Employer programs

5. How is LW calculated? • Canadian Living Wage Framework (CLWF) • Indigenous family in Inuvik

6. How is LW calculated? • CLWF calculation approach Annual Expenses = Before-Tax Employment Income + Government Transfers - Taxes Before-Tax Employment Income / Paid Hours of Work = Living Wage

7. How is LW calculated? • CLWF calculation approach

8. What is the Living Wage in the NWT? • Couple Family – 2 working adults & 2 children

9. Annual Expenses

10. Annual Expenses: Estimation Approach and Data Sources • Food / Clothing & Footwear • NWT MBM • Shelter • CMHC Market Rental Report • Tenant insurance quotes • Transportation • NWT MBM • Public transit & taxi • Other Household Costs • Survey of Household Spending (Statistics Canada) • Childcare • Cost of local providers & summer programs • Health Care • Health insurance premium quotes • Conservative estimates of out-of-pocket expenses

11. Annual Expenses:Estimation and Data Sources • Social Inclusion • Cell phone, cable and internet • Adult education – Aurora College tuition and material estimates • Local recreation costs • Computer, children’s toys, gifts - Survey of Household Spending • Netflix account • Restaurant meals – conservative estimates • Vacation – Trip to Edmonton/Yellowknife/Whitehorse

12. Government Transfers • Canada Child Benefit over $6,000 • Income is too high to receive benefits through: • NWT Child Benefit • GST Rebate

13. Taxes • Net Tax comes in at $12,000-$14,000 • Includes: EI, CPP, Federal & NWT Income Tax • Highest in Inuvik due to higher Net Income resulting from lower child care expense adjustment • Greatest tax burden stems from: • Federal Income Tax –$5,000 to $6,500 • CPP - $4,300 to $4,600

14. Living Wage in Other Communities

15. What is the LW in other communities? • Whitehorse (2017) – $18.26 • North East BC (2018) - $18.29 • Edmonton (2018) - $16.48 • Calgary (2017) - $18.15 • Canmore (2017) - $25.28 • Vancouver (2018) - $20.91 • Victoria (2018) - $20.50

16. Contact Information Michel Haener M Haener Consulting Services mhaener@telus.net 780-228-4464