Torontonians need to earn more than double minimum wage to afford apartment: Report
Posted July 18, 2023 10:52 am.
Last Updated July 18, 2023 12:34 pm.
A new report finds there would need to be a huge boost to the minimum wage for low-income earners in Toronto to even come close to comfortably affording a two-bedroom apartment.
The findings from the Canadian Centre for Policy Alternatives suggests people living in the city would need to earn $40 an hour to afford a two-bedroom apartment and then still have money left over for food and utilities. For a one bedroom apartment they would need to earn close to $34 an hour.
Ontario currently has the second highest minimum wage in the country at $15.50, and will have the highest in October 2023 when it increases to $16.55. The report finds the climbing cost of housing in Toronto has wiped out any gains made by recent minimum wage increases.
“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,” reads the report. “They are likely spending too much on rent, living in units that are too small, or, in many cases, both.”
CMHC, Rental Market Survey Data Tables; ESDC, Minimum Wage Database; authors’ calculations. (Source: Canadian Centre for Policy Alternatives)
The average monthly rent in Toronto is $2,500 for a one-bedroom apartment and $3,301 for a two-bedroom unit, according to recent data analyzing monthly listings from rental.ca.
A separate report released earlier this month from the Toronto Regional Real Estate Board showed average condominium apartment rents in the Greater Toronto Area continued to outpace the rate of inflation in the second quarter of 2023.
The report finds nearly all Canadians working a 40-hour week at minimum wage are allocating more than 30 per cent of their monthly pre-tax income towards rent or mortgage.
Premier Doug Ford was asked about the latest study while taking questions from reporters in Niagara Region on Tuesday morning. The premier said high housing costs remain a supply and demand issue and seemed to suggest businesses have been unable to attract workers at minimum wage rates.
“Everyone starts somewhere,” said Ford. “But what I’m hearing from business owners is they can’t get anyone. No matter if it’s $18 or $20, it’s tough to find people.”
The Canadian Centre for Policy Alternatives’ report suggests the skyrocketing rent should “not be interpreted simply as a supply and demand problem.”
The study instead attributes the high cost to three factors, including wage suppression policies, low supply for rental housing, and rental market regulation that favour profit over housing security.
“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,” reads the study.
