Is a living wage the answer to New Brunswick’s cost-of-living crisis?

Affordability pressures in Fredericton have intensified the debate over whether wage policy alone can keep pace with rising living costs. (Credit: Ali Ahmed Iraqui)

When rent goes up, groceries go up and everything from transit to textbooks costs more, the instinctive response is simple: wages should go up too. 

In New Brunswick, that instinct has turned into renewed calls for a “living wage,” a rate of pay meant to reflect what it costs to sustain yourself every day. 

While the idea sounds straightforward, the debate around whether raising the minimum wage to a living wage would fix affordability is far more complicated and deeply contested.

A living wage is not the same thing as the government-mandated minimum wage. 

The Living Wages in New Brunswick 2025 report defines a living wage as the hourly rate a worker needs to meet basic needs and maintain a decent quality of life, based on the real costs of living and raising a family in the province.

In 2025, the province-wide living wage is $24.77 an hour, while Fredericton’s living wage is even higher at $26.05 an hour.

By contrast, New Brunswick’s minimum wage is $15.65 an hour, one of the lowest in Canada.

The gap between what workers are legally paid and what it costs to live in the province has grown alongside rising living costs, particularly housing.

The report points to shelter as the single biggest expense driving living wages upward.

Shelter costs increased the most over the past year, with rent in New Brunswick rising by 7.9 per cent between June 2024 and June 2025, outpacing the national rate.

For families, shelter is a fixed and unavoidable cost. When incomes do not keep pace with rent increases, households are forced into difficult trade-offs, such as choosing between paying rent on time or buying groceries.

The report estimates that 45 per cent of workers in New Brunswick earn less than a living wage, challenging the assumption that low-wage work is limited to students or temporary workers.

From this perspective, calls for higher wages are not abstract policy debates but responses to concrete affordability pressures experienced by nearly half of the province’s workforce.

At the same time, not everyone agrees that moving the minimum wage toward a living wage is the right solution. 

Louis-Philippe Gauthier, Atlantic director for the Canadian Federation of Independent Business. (Credit: LinkedIn / Louis-Philippe Gauthier)

“What you're discussing is setting the minimum wage at a living wage level,” he said.

“Minimum wage has growth or increases. The minimum wage has surpassed, by far, CPI increases over the last 15 years and has surpassed what is actually happening within the labour market.” 

According to Gauthier, minimum wage should move in step with overall wage growth, not jump ahead of it. 

“From a minimum wage perspective, the minimum wage should increase when all the wages in the province increase,” he said, adding that “arbitrary increases to the minimum wage distort the wage scales and the labour market.”

Gauthier also questioned whether minimum wage is an effective tool to address poverty at all. 

He argued that many people living in poverty are not actively working, including those on welfare or fixed incomes and therefore, would not benefit from minimum-wage increases. 

Gauthier also emphasized that businesses facing higher payroll costs would likely raise prices to compensate. 

“These employers would, in turn, have to raise prices, while some would get more money. Government would take more in personal taxes from these individuals and government would take more in remittances for businesses and employees,” he said. 

“Businesses would essentially have to increase their prices, pass that on to the customer … and then at that point, you have essentially inflation.”

The Living Wages in New Brunswick 2025 report takes a different stance, arguing that earning minimum wage often means living in poverty and being unable to meet basic needs.

The report also notes that paying a living wage can benefit workers’ well-being and is associated with reduced financial stress and improved stability

However, the report acknowledges limitations in the living-wage model, which is based on a reference family of two adults and two children and does not account for all household types or complex financial situations

This tension between economic caution and social need sits at the heart of the living-wage debate.

For Gauthier, the idea that minimum wage can act as a cure-all for affordability is misguided. 

“Minimum wage is not a magical wand,” he said.

Instead, he pointed to other policy levers, such as taxation and housing policy, which governments could use to reduce cost-of-living pressures without directly reshaping wage structures. 

“It's not only on the wage side of the conversation that the solution exists,” he said, suggesting that housing costs, municipal taxation and development policy all play roles in shaping affordability.

What emerges from this debate is not a simple policy choice but a broader question about how affordability should be addressed in a province where rent, food and child care costs continue to rise. 

The Living Wages in New Brunswick 2025 report shows how far current wages lag behind the cost of living for many households.