Clear  |  More Options ▼
◄ Return

couple in hand drawn apartment

How much do you need to make to afford rent in Canada’s major cities?

By Zoocasa

Canadian cities are officially unaffordable for renters making the minimum wage, says a recently released report by the Canadian Centre for Policy Alternatives.

The average after-tax wage needed to afford a one-bedroom apartment across Canada is just over $20/hour and $22/hour for a two-bedroom,
assuming the tenant works 40 hours a week for 52 weeks out of the year.

The Canadian Centre for Policy Alternatives says the 4.7 million families who rent their homes are facing an “affordability crisis.” (Housing costs are considered affordable when they are less than 30 per cent of one’s take-home income).

“In most Canadian cities, including Canada’s Toronto and Vancouver, there are no neighbourhoods where it is possible to afford a one- or two bedroom unit on a single minimum wage,” reads the report. “In fact, it is possible for a minimum-wage worker (e.g., a single parent) to comfortably afford the average two-bedroom rental rate in only 3% of the 795 neighbourhoods where rental and income data are available.”

There is no province in Canada in which the minimum wage exceeds $15/hour, even before taxes, and many of those jobs are part-time. A full 25% of Canadian workers make within $3 of the minimum wage, and the majority of those workers are adults.

Alberta pays the highest minimum wage at $15/hour while Saskatchewan pays the lowest at $11.06/hour
Because of the high costs renters are forced to the outskirts of the city, where they are pushed into buying a car to commute to work, another expense they can hardly afford.

The highest two-bedroom rental wages are found near condos for sale in downtown Toronto near the Bay Street corridor at $73.17/hour, Vancouver’s North False Creek neighbourhood at $60.93/hour and the Toronto waterfront and island area at $53.01 hour. The only exception to this affordability crisis is Montreal, which still has well-priced one-bedroom units in neighbourhoods close to transit.

Toronto is partially so expensive for renters because sold house prices in Toronto are so high, even for houses for sale in North York, East York, Etobicoke, and Scarborough. Landlords must cover their carrying costs.

“High housing costs, having priced many millennials out of home ownership, are also contributing to increased demand for rental units—and increased rental costs,” reads the report. “Rising rents alongside a shift from purpose-built rental buildings to condominiums has made living in Canada’s cities challenging for renters. “

It used to be different — there were far fewer individual landlords and more large buildings designed purposefully for renters. But that sector has essentially collapsed. Purpose-built rental units went from 100,000 new units landing on the market in the 1970s and early 1980s to just 10,000 in the 1990s.

The centre says the only solution is building new dedicated affordable housing, which would chill rental prices by increasing supply.

◄ Return