Canadian Imperial Bank of Commerce is boosting its minimum wage and pledging to push it even higher in the next few years as tight labor markets force banks into fierce competition for workers.   

The lender’s minimum wage will rise to $20 per hour in Canada and US$20 in the US in July, and the bank is committing to raise those figures to $25 and US$25 by the end of 2025, according to a statement from Chief Executive Officer Victor Dodig on Thursday. The bank is also providing a 3 per cent raise for workers in the six lowest levels of its pay scale next month. 

“These investments build on the steady, strategic targeted investments we have been making as we continue to ensure we pay competitively and recognize the contributions of our team, particularly at a time when the cost of living has been increasing,” Dodig said in the statement.

The bank’s minimum entry wage for merit-based pay team members is currently $17. The 3 per cent increase applies to roles including contact center agents, mobile adviser and investment adviser assistants.

Canada’s banks are boosting pay, especially for employees in the lower tiers of their pay scale, to attract and retain workers in a historically tight labor market. Canada’s unemployment rate hit a low of 5.2 per cent in April -- the lowest in data going back to 1976. 

Royal Bank of Canada said last month that it would spend more than $200 million on pay increases, benefits and other incentives to retain workers. The bank is raising base salaries by 3 per cent in the four lowest levels of its pay scale, accounting for almost half of its workforce. 

Bank of Nova Scotia is raising pay for workers in assistant manager roles and below, representing half of its Canadian employees, by 3 per cent as of June 20. The increase, announced to employees last month, is in addition to regular year-end salary adjustments. 

Bank of Montreal in October said it was raising its minimum wage for US branch and contact-center employees to US$18 an hour, a 20 per cent bump.

CIBC, Canada’s fifth-largest lender by assets, had about 47,800 employees as of the end of its most recent fiscal quarter, according to a company filing.