Cost of rent too high for minimum-wage workers in nearly every Canadian city: report

A new report on the cost of renting in Canada paints a bleak picture of affordability in most cities in the country, including Toronto, where two full-time minimum-wage workers do not earn enough to reasonably afford a one-bedroom apartment.

The report, released by the Canadian Centre for Policy Alternatives, calculated a “rental wage,” which is the hourly wage that would be required to afford rent while working a 40-hour week and spending no more than 30 per cent of one’s gross income on housing.

“The rental wage is considerably higher than minimum wage in every single province. Even in the three provinces with the highest minimum wage in Canada—B.C., Ontario, and Alberta—there’s a shortfall in what minimum-wage workers earn and the rent they have to pay, on average,” the report read.

In all but three cities in the country, which are all located in Quebec, the one-bedroom rental wage is higher than the minimum wage.

“Vancouver and Toronto are the worst culprits: even two full-time minimum wage workers cannot afford a one-bedroom unit without spending more than 30 per cent of their combined income on housing,” according to the report.

In Toronto, the report said, the rental wage for a one-bedroom apartment is $33.62, more than double the province’s minimum wage of $15.50. For a two-bedroom unit, the report said the rental wage in Toronto is $40.03.

“The discrepancy between the rental wage and the minimum wage is such that, in most Canadian cities, minimum-wage earners are extremely unlikely to escape core housing need. They are likely spending too much on rent, living in units that are too small, or, in many cases, both,” the report said.

Compared to the findings in its 2018 report, the Canadian Centre for Policy Alternatives found that “rents have become even less affordable to minimum-wage workers.”

“Even in Québec, where rents are comparatively more affordable, the trend is worrisome,” the report states.

When asked about the report at a news conference on Tuesday, Ontario Premier Doug Ford touted the ways his government is addressing the affordability crisis, including capping the province’s rent increase at 2.4 per cent this year and 2.5 per cent next year.

“This goes back to supply and demand and last year… purpose built rentals, we set a record with about 15,000 in purpose built rentals,” Ford said.

“We need to continue building supply.”

He added that the province intends to raise the minimum wage in Ontario to $16.50.

The report identifies “three sets of factors” that make rent too high for minimum-wage workers in the country, including wage suppression policies, low supply of rental housing, particularly purpose-built, rent-controlled, and non-market units, and poorly regulated rental markets that favour profit-making over housing security.

“The findings presented in this report should not be interpreted simply as a supply and demand problem,” the report continues.

“The mess in which we find ourselves is due to bosses keeping wages down with help from provincial governments that set the minimum wage and federal governments that control monetary policy.” 


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