Minimum wage workers across Canada face out-of-control rents that far exceed their income

OTTAWA—Nearly all minimum-wage workers putting in a standard 40-hour week in Canada face rents that exceed 30 per cent of their monthly pre-tax income, the standard measure of housing affordability. In fact, the “rental wage”—the hourly wage needed to pay rent without exceeding that 30 per cent threshold—is considerably higher than the minimum wage in every single province. This makes housing unaffordable for minimum-wage workers across the country, says a new report by the Canadian Centre for Policy Alternatives (CCPA).

In Out of Control Rents: Rental wages in Canada 2023, CCPA senior economist David Macdonald and CCPA Ontario political economist Ricardo Tranjan present an updated rental wage for all provinces, cities and neighbourhoods. They find that in 2023, rental wage increases outpaced minimum wage increases in every province but Manitoba and P.E.I., the two provinces with the strongest rent controls in the country. In the most egregious example, Alberta’s minimum wage didn’t budge, while the rental wage for two-bedroom units in that province rose by more than10 per cent. See table below:

“What this means is that minimum wage increases are going largely into the pockets of landlords rather than improving the living standard of working families,” said Tranjan. “Higher minimum wages should also fuel local economic activity through consumption, but that would require the money to be spent on Main Street.”

The report also examines 62 urban areas and 787 neighbourhoods across Canada, and it finds soaring rents everywhere. In only nine cities in all of Canada—the majority of these in Quebec—can minimum-wage workers afford a one-bedroom unit without spending too much on rent. In Vancouver, Toronto, Victoria, Kelowna, Ottawa and Calgary, the combined income of two full-time minimum-wage workers is insufficient to afford a two-bedroom unit.

“The fact is affordable rentals won’t be delivered by the market as developers can’t turn a profit building housing for low-income families,” added Macdonald. “So, the federal government must invest in building affordable units. It should also enact strong, federal rent controls, the single measure that would have the most direct and immediate impact on stopping the profiteering that is driving up rents across the country. Indeed, the federal government is currently consulting on a Renters’ Bill of Rights: A national rent control policy should be its central plank.”

Out of Control Rents is available at: https://policyalternatives.ca/publications/reports/out-control-rents
An interactive map of the report data, including provincial, city and neighbourhood views, is available at: https://monitormag.ca/articles/rentalwages2024

For more information and interviews please contact Amanda Klang, CCPA Senior Communications Specialist (Media & PR) at [email protected]