It's next to impossible to pay the rent working full time for minimum wage, new report calculates
The odds of a minimum wage worker being able to afford a one- or two-bedroom apartment in just about every city in Canada are next to nil, a new report from an Ottawa-based think-tank says.
Looking at Statistics Canada data on wages from last October, and rental information from the Canada Mortgage and Housing Corporation (CMHC) that same month, the Canadian Centre for Policy Alternatives (CCPA) crunched the numbers on the almost 800 neighbourhoods across Canada's three dozen largest cities to see how easy it is to find a place to live on the minimum wage.
The results were bleak.
By the CCPA's math, a minimum wage earner could afford a one- or two-bedroom apartment in just 24 neighbourhoods across the country, out of 795. If the standard drops to a one-bedroom, the picture looks marginally better, as the availability extends to about 70 neighbourhoods, but that's still less than one in 10 — and most are far from downtown cores where jobs are more plentiful and generally higher paying.
Concern over Canada's housing market tends to focus on homeowners, CCPA economist David MacDonald said, but almost five million Canadians — about a third of all households — are renters, and they face affordability issues that are just as pressing.
"Many of these renters, particularly those working at or near minimum wage, on fixed incomes or single-income households, are at risk of being priced out of modest apartments no matter where they look," he said.
In its analysis, the CCPA calculated the income that a minimum-wage worker would earn over a standard 40-hour workweek, and then cross-referenced it against rental data from the CMHC. The report also assumes the rule of thumb that a person should spend no more than 30 per cent of income on housing to avoid having other financial issues. Theoretically, a minimum-wage worker could simply work more hours, or drastically cut back on other expenses somehow, but that isn't quite the same thing as making an apartment affordable.
Add it all up and the standards of affordability are looking increasingly out of reach.
Leading the way is Vancouver, where a theoretical minimum-wage worker would have to work 84 hours a week to afford the average-priced one-bedroom apartment, or 112 hours a week for a two-bedroom apartment.
Toronto was not far behind, where that same worker would have to work a 79-hour week for a one-bedroom, and a 96-hour week for a two-bedroom apartment.
"A sole income earner working full time should be able to afford a modest two-bedroom apartment for their family in a country as rich as Canada," MacDonald said. "But in most Canadian cities, including Canada's largest metropolitan areas of Toronto and Vancouver, there are no neighbourhoods where it is possible to afford a one- or two-bedroom unit on a single minimum wage."
Victoria, Calgary and Ottawa round out the top five. In all three places, that same worker would have to clock a 70-hour workweek at least just to pay the rent on a two-bedroom.
The CCPA only found three cities where the local minimum wage would be enough to comfortably afford a one-bedroom apartment and have enough left over, if working 40 hours a week. All are in Quebec: Sherbrooke, Saguenay and Trois-Rivières.
Across the country, the CCPA tabulates that a worker putting in 40 hours a week would have to earn $22.40 an hour to be able to afford a two-bedroom apartment. It drops to $20.20 an hour for a one-bedroom unit.
The highest minimum wage in the country is $15 an hour in Alberta, a highwater mark that is still well short of both of those levels. In some provinces, the minimum wage is barely $11 an hour — less than half what it takes for a two-bedroom, according to the CCPA. And roughly a quarter of Canadian workers earn less than $3 more than minimum wage, the CCPA says.
"Until those wages are pushing $20 an hour, and more of the available jobs are full-time, rental costs will remain a significant burden on many workers," MacDonald said.
"Everyone deserves a decent place to live."