VCC in collaboration with the Alberta Living Wage Network has published a new living wage, reflecting what it costs to live in a city like Calgary. The new living wage for Calgary is $22.40 per hour. It’s probably not surprising that it’s gone up especially since many are feeling the pinch at the grocery store and the gas pump. This page will help you learn more about living wages and actions businesses and policymakers can take to make life more affordable for those living on low incomes.
E4A in Action
Calgary’s Living Wage is $22.40 per hour
Not surprisingly, the cost of living is up over last year
14 November 2022
2022 living wage
What's a living wage?
A living wage is a proxy for the cost of living in a community. It is determined by calculating average expenses, taxes, and government transfers for a given household using local costs. A living wage considers the basic needs of an average household, plus the additional costs we all incur from time to time and government benefits. It allow a household to have a modest standard of living, and build their human and financial assets. Employment income that is sufficient to cover the cost of living is vital to reducing poverty and building a resilient city and economy.
Calculating the living wage
The living wage is calculated based on a weighted average of the income needs of three household types: two-parent family with two young children (32.6%); single parent with one young child (7.7%); and single individual with no children (59.6%). This is a different approach than 2021 Living Wage, which used the income needs of a two-parent family with two kids.
The methodology for calculating Calgary's living wage assumes that all adults in the household are working full-time hours and the following inputs are included:
Elements in the living wage calculation
Full details of the allocations for each category are provided in the 2022 Calgary Living Wage Brief.
Based on Health Canada’s 2019 National Nutritious Food Basket (NNFB) and adapted by Alberta Health Services for Alberta communities. The NNFB represents the cost of a basic, healthy diet that meets nutrition recommendations and reflects food habits and food purchasing patterns of the population. Registered Dietitians and trained volunteers within specified communities go to grocery stores in their community to determine how much the food basket costs in their community. The NNFB includes a mix of fresh, frozen, and minimally processed foods that can be purchased at a full-service grocery stores any time of the year. The amount of each food item required for a family or single person is determined by the age and sex of the individuals. The cost of the NNFB reflects the cost of all the food items together. Visit National nutritious food basket - Canada.ca for more information about the National Nutritious Food Basket and a full list of its content. Please contact publichealthnutrition@ahs.ca for information about the data collection process.
Based on Statistics Canada’s Survey of Household Spending (SHS) for the following categories: women’s and girls’ wear (aged 14+), men’s and boys’ wear (aged 14+), and children’s wear (under 14 years of age). SHS data is reported by income quintile. The income quintile with the lowest expenditure was used, excluding the first income quintile (first to 20th percentile of income), since many in the first income quintile would not be making a living wage. SHS data is based on what the average household spends, so numbers were adjusted based on Statistic’s Canada’s 2021 Census Profile Table for Alberta (2.6 people per household; 19% aged 0–14). The data was adjusted to 2022 using Statistics Canada’s Consumer Price Index for Clothing & Footwear.
Based on Canada Mortgage and Housing Corporation’s (CMHC) Housing Market Information Portal, which assumes a 3-bedroom rental apartment or townhouse for the family of four, a 2-bedroom unit for the lone parent family, and a 1-bedroom for the single individual. Numbers from the October 2021 CMHC Rental Market Survey were adjusted to 2022 using Statistics Canada’s Consumer Price Index for shelter in Alberta. Estimates for utilities are based on the Utilities Consume Advocate’s Cost Comparison Tool as of October 25, 2022. Tenant insurance is based on community-specific Square One estimates as of October 25, 2022.
Based on the Canadian Automobile Association’s Driving Costs Calculator as of October 25, 2022. The costs represent the average of a lower-cost 8-year-old car, hatchback, truck, and SUV. Expenses assume milage of 10,000 km and a 70/30 split between city and highway driving, and include depreciation, maintenance, license and registration fees, insurance costs, monthly car payments (assuming a 15% down payment), and fuel costs (sourced from the CAA Gas Price tool for Calgary). Communities with public transit assume one vehicle and one transit pass for the family of four, one vehicle for the lone parent family, and the average of a transit pass and a vehicle for the single individual. Transit pass costs are based on Calgary Transit’s pricing.
Includes the cost of 12 months of child care for the three-year-old, based on the cost of local providers. Also includes 10 months of before- and after-school care and two months of day camps for the seven-year-old, based on the actual costs of local providers. The expenses are after the Affordability Grant is taken into account ($450/month for the three-year-old). The Alberta Childcare Subsidy is included in calculations for living wages under its income threshold of $180,000 for a family.
Based on the cost of the premiums for Alberta Blue Cross health insurance. The plan selected is Blue Choice, with Plan B extended health benefits, dental coverage, and prescription coverage. It also includes the cheapest life insurance available from LowestRates.ca estimates and the cheapest critical illness insurance available from PolicyAdvisor.
Cost sourced from local and online post-secondary institutions for two three-credit courses, including fees and textbooks. Assumes one adult is taking one course per semester. A tax credit is calculated for tuition and eligible fees.
Based on Statistics Canada’s Market Basket Measure (MBM) multiplier for Other expenses (75.4% of food and clothing & footwear). The methodology of the multiplier is based on using the cost of a basket of items for food and clothing & footwear. While our methodology for Food is based on the cost of a basket of items, our methodology for Clothing & Footwear is based on expenditures (Survey of Household Spending), so we use Alberta’s MBM estimate for clothing in this calculation. See page 73 of First Comprehensive Review of the Market Basket Measure of Low Income (Human Resources and Skills Development Canada) for a full list of items included. This category also includes a phone plan with Public Mobile for each adult, with 5GB of data on a 4G network.
One twenty-sixth of the above expenses. It represents approximately two weeks’ worth of pay for each adult in the household. This amount is meant to provide a savings cushion for unexpected events, like the serious illness of a family member, transition time between jobs, etc.
Federal and provincial taxes are calculated along with Canada Pension Plan and Employment Insurance contributions.
The living wage is offset by government benefits, including:
- Canada Child Benefit
- Climate Action Incentive
- Alberta Child Care Subsidy
- Alberta Energy Affordability
- Alberta Fuel Tax Relief Program
- Child Care Affordability Grant
There were significant changes in government benefits between 2021 and 2022 for families with children. In 2022, families did not receive the CCB young child supplement, which provided $1,200 to the family of four in 2021. The Alberta Child Care Subsidy was also significantly reduced, but the annual income threshold to receive this benefit was increased from $90,000 to $180,000. The child care affordability grant introduced in 2022 provides child care centres with $450/month for full-time care for a preschoolaged child regardless of the family’s income. In Calgary, this resulted in a decrease in the cost of child care for the family of four from 2021 to 2022.
How are living wages different from minimum wages?
Minimum wages are legislated by the provincial government and are set so that no employer may pay below the legal minimum. It currently sits at $15 per hour for most employees and $13 per hour for people under the age of 18 and hasn’t gone up since 2018. Alberta is the only province that didn’t increase its minimum wage in 2022, and is one of four provinces that doesn’t periodically adjust minimum wage based on the cost of living.
About 200,000 Albertans are on minimum wage in our province and in Calgary, the living wage is almost 50% higher than the minimum wage.
Living wages across Canada
There are many communities that publish living wage across Canada and formally established networks in Ontario and British Columbia. Annual figures are also released by organizations in Quebec, Saskatchewan, New Brunswick, and Nova Scotia.
Calculating and publishing living wages informs about local affordability measures and how they compare to other cities and provinces. Equipped with this information, policymakers can evaluate how measures like utility rate caps and action on affordable housing and food can affect lower income workers in a city.
Certified living wage employers
Employees that pay a living wage directly or through a combination of wages and basic needs benefits, may be eligible for living wage certification through the Alberta Living Wage Network.
Studies show that living wage employers experience a decrease in employee turnover and absenteeism, increased retention and productivity, and savings on rehiring and retraining. Employers can also use the living wage as a tool within their recruitment strategy for lower paying occupations. Living Wage Employers receive public recognition for demonstrating a commitment to socially responsible practices, making them more attractive to potential employees and customers. The Living Wage Employer Program recognizes and celebrates employers that pay their direct and indirect employees a living wage.
Resources
- Living wages: one solution to working poverty explores approaches that would help low wage workers with the current affordability crisis.
- Get answers to common questions about living wages.
- The Alberta Living Wage Network is made up of community organizations, businesses and municipalities with the goal of encouraging employers and policymakers to implement a living wage and best practices across the province that would help businesses thrive and Albertans earn livable incomes.
- Studies show that living wage employers also cut costs when it comes to hiring and training new employees. Learn more in How Living Wages Benefit Employers.
Calgary's Living Wage
VCC works in collaboration with the Alberta Living Wage Network to calculate the annual living wage.