Low-Income Workers Can’t Afford Rent in 91% of Canadian Cities

A new study shows how unaffordable this country has become as cities like Vancouver and Toronto are basically out of reach for anyone making less than $70,000.
minimum wage workers can't afford rent in most canadian cities
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If you make minimum wage, you can’t afford to live on your own in virtually any Canadian city, a new study says.

According to a report released Thursday by a leading research institute, the Canadian Centre For Policy Alternatives (CCPA), if you’re looking for a two-bedroom, you’d be shut out of 97 percent of the 795 neighbourhoods where rental information is publicly available. You’re shut out of 91 percent of cities if you’re looking for a one-bedroom.


Given that one-third or 4.7 million households across the country, rent rather than own, the “affordability crisis” highlighted in the data is significant. According to the report’s author, renters are often low-income earners, millennials and Gen Z, or newcomers to the country.

“There’s a big group of people who don’t make a lot but are working full-time and they can’t afford to rent in big cities. The people who live in downtown Toronto are not just bankers. They’re also the people that staff lunch counters, people that drive in the food, clean those offices,” said CCPA senior economist David Macdonald. “They might be throwing up their hands because they’re being pushed out of the downtown on the real estate side and the rental side.”

The study honed in on “rental wage,” meaning the hourly wage a person needs to make in order to be able to rent a place using no more than 30 percent of their pre-tax income, which is the widely-used threshold for housing affordability. The national rental wage for an average-priced one-bedroom apartment is $20.20 per hour, which works out to $42,016 annually. That’s significantly higher than minimum wage anywhere in the country.

The rental wage climbs in the most expensive markets. It’s highest in Vancouver at $35.43, or $73,695 annually. Framed another way, that means someone making minimum wage of $13.85 an hour in Vancouver, would have to work 84 hours a week to afford the average-priced one-bedroom apartment, or in the case of a single-parent or single-earner household, 112 hours a week for a two-bedroom apartment.


Rental wages are also steepest in Toronto ($33.70 hourly or $70,096 annually), Calgary ($26.97 hourly or $56,098 annually) and Ottawa ($26.08 hourly or $54,247 annually). For context, it’s important to consider that 25 percent of workers earn within $3 of minimum wage.

This issue disproportionately affects young, low-income workers who can’t afford to buy into many Canadian housing markets, and are feeling the rental squeeze in most urban cities. The federal Liberals’ 10-year National Housing Strategy includes increasing the supply of rentals—boosting supply is expected to bring rental costs down. But based on the current trajectory, the majority of those rental units won’t open their doors until the late 2020s.

In the meantime, the details of a new rent supplement for low-income tenants are being worked out and they’ll average about $2,500 a year. Based on Macdonald’s calculations, that brings down rental wages by about $4 an hour. That initiative has a maximum budget of $750 million, which means it will only extend to about 12 percent of renters struggling with affordability—but many millennials aren’t likely to be eligible.

“The budget cap on this program is tight and it’s being negotiated right now with the provinces. What will likely happen is strict criteria will be put on who accesses it. In some cases it will be based on who is very low income, who has children and seniors. And everybody else would be cut out,” said Macdonald.

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