The Ontario government is poised to increase minimum wage based on the rate of inflation since 2010, a source tells CTV’s Paul Bliss.

The annual inflation rate in the three years since the last hike has been 2.9 per cent, 1.52 per cent and 0.91 per cent. That would mean raising the province’s minimum wage from $10.25 an hour to between $11 and $11.25.

The news comes as an advisory panel examining minimum wage in Ontario released a report on Monday calling for an increase in minimum wages across the province.

The Canadian Press reports that the six-member panel's report recommendations included:

  • tying wage increases to the inflation rate
  • giving businesses four months notice before any increases take effect
  • a full review every 5 years
  • ongoing research to aid government policy decisions

The panel is not expected to recommend exactly how much the government should raise the rate.

Government sources told The Canadian Press an announcement, about hiking the minimum rate retroactively to 2010, is likely this week.

On Monday, Premier Kathleen Wynne told reporters pegging the increase to the rate of inflation would be a wise move.

"It takes the decision out of the realm of political whim and puts it into the realm of some kind of relationship with the way the economy is growing," she said.

"I think that businesses and individuals should be pleased that there will be a more predictable system in place."

The general minimum wage, which is the lowest rate an employer can pay an employee in the province, was last increased in March 2010, from $9.50 to $10.25 per hour.

Students have seen their minimum wage stalled for three years too, at $9.60 per hour, while the minimum rate for employees who serve liquor as a regular part of their work has remained $8.90.

Business groups have warned that raising the minimum wage would have a negative impact on workers, insofar as costs could rise too, as the number of available jobs decreases.

The Canadian Federation of Independent Businesses was not happy with word of a retroactive increase.

"I think any kind of increase, be it an increase in the hourly rate or retroactive increases, it's going to make it difficult for businesses to cope, period," CFIB policy analyst Nicole Troster told The Canadian Press.

"Businesses can't go back to their customers and retroactively charge more fees for their products and services, so really, why should government be able to do this?" she added.

The organization warned that increasing the minimum wage would hurt low-skilled, low-income workers -- the very group it's supposed to help -- because it forces small businesses to absorb the cost through reduced hours or job cuts.

But various campaigns have nevertheless been calling on the provincial government to raise the general minimum wage to $14.

That's the amount advocates say someone working 35 hours a week would have to earn to bring their income 10 per cent above the $23,000 a year, before taxes, that is currently considered to mark the poverty line.

At $10.25 per hour, a minimum-wage earner brings home less than $19,000 before taxes.

The Ontario Convenience Stores Association said Monday that tying future increases in minimum wage to the inflation rate is a good idea, adding it wasn't concerned with the retroactive hike back to 2010. "It looks very minimal and will protect jobs," the association said.

In her comments Monday, Wynne cautioned against imposing too big an increase, too quickly.

"I know that there's a call for $14 (but) we have to move very carefully because this is about making sure that we retain and create jobs," she said..

"At the same time, we need to have a system in place that has a fairness to it that I think has not been the case for many years."

According to results of a Wellesley Institute study released last October, nine per cent of Ontario workers were earning the minimum wage in 2011, up from 4.3 per cent in 2003.

And while young workers used to dominate the ranks of minimum-wage earners, Statistics Canada data shows that 40 per cent of people making the base wage in 2011 were aged 25 or older.

Ontario's minimum wage rates are already among the highest in Canada, where rates fall in a range from $9.95 in Alberta to $11 in Nunavut.

With files from The Canadian Press.