Living wage now $21.65 after Oshawa and Durham switched from GTA to East region

A slight redrawing of the map and presto! Durham Region just got slightly more affordable for minimum wage earners.

Not really, of course, and it’s debateable if Oshawa and Pickering wage earners should be lumped in with Toronto and Oakville or with Kingston and Cobourg, but the Ontario Living Wage Network has decided this year to include Durham Region in the ‘East’ Zone from the GTA.

That change means the living wage in Durham – the salary where a person can live ‘comfortably’ – dropped from $26 an hour to $21.65 an hour.

Although inflation has cooled and grocery prices aren’t growing as steeply as they were post-pandemic, high rental rates are continuing to put pressure on residents in Ontario – especially the Greater Toronto Area (which includes Peel, Halton and York regions) – making life unaffordable for minimum wage earners.

According to a recent report by the Ontario Living Wage Network, GTA residents must make at least $26 an hour to live comfortably, followed by Grey-Bruce-Huron-Perth-Simcoe ($23.05), Ottawa ($22.80) and the East region ($21.65).

Western Ontario was rated the most affordable, with London-Elgin-Oxford at $19.50 and hour and the Southwest region at $19.85 per hour.

Despite some positive trends, 2024 living wage rates have increased by an average of 3.4 per cent, largely due to shelter costs. According to the most recent National Rent Report, rents, while starting to decline slightly, are still high. In Toronto, the average price of a one-bedroom unit hit $2,380 last month (down over nine per cent from October 2023), while a one-bedroom in Mississauga cost about $2,308 (down just two per cent year-over-year).

“For the most part the increase to this year’s living wage rate is mainly due to rising costs for rent in our province. Inflation of food costs may have calmed but still remain high relative to earlier years,” the report reads.

The report notes that while the minimum wage climbed to $17.20 in October, it’s still far below what a resident would need to make to afford life anywhere in Ontario.

In order to come up with its calculations, the OLWN factors in shelter, food, transportation and other expenses, including modest vacations and cultural and community experiences. According to the report, OLWN analyzes costs for three types of households: two parents aged 35 and two children aged 7 and 3, a single parent with a child aged 7, and a single adult.

The living wage rate is the before-tax income that each adult would need to cover the expenses included in the ‘basket’ for their family type. The calculation considers government transfers the family may receive and the payroll and income taxes the adults may pay.

Historically, living wage rate increases have been fairly similar to the rate of inflation and with inflation hitting a 40-year high of 6.8 per cent in 2022, living wage rate increases were no surprise. That said, the report notes that general inflation “cannot fully explain changes in living wage rates in Ontario.”

The report says the costs of food and shelter are two of the biggest expenses in the living wage calculation and that these costs increased by more than 18 per cent compared to general inflation of 13.4 per cent between 2018 and 2022.

The Living Wage Network said increases in food and rental costs, as well as transportation costs due to higher fuel prices, could account for 2023 living wage rate increases.

In the report, the OLWN says it encourages employers to offer wages that help lower-income residents live more comfortably in their cities.

“This is the end goal of our calculation work and certification program: signing up certified living wage employers across Ontario. In order to qualify for certification, all employees must make at least a local living wage, and many see a raise as a result,” the report reads.

“The problem of working poverty is complex, and is the product of issues of affordability, policy, cultural norms and attitudes about the value of work and more. Yet the most expedient first step is to simply ensure that a day’s work can cover that day’s expenses.”

The report suggests that a family of four in the GTA spends $32,007 a year on shelter – by far the highest on the list. Families in Durham Region will spend $22,539, while a single parent $20,055 and a single person without children $17,223.

Food costs are actually slightly more affordable in the GTA than Durham and the rest of the East region. A family of four in Toronto will spend $12,213 a year on food – compared to $12,541 in Durham. A single parent in the GTA $5,869 vs $6,022 in Durham. And a single person will spend $4,175 a year on food in Toronto and $4,288 in the East region.

Transportation is another major cost, and again, Toronto is cheaper as a reflection of the abundance of transit options. The difference for a family of four is substantial – $12,445 in Durham vs $9,801 in Toronto – while costs for a single parent is the same at $7,584. Transportation costs for a single person is more than double in Durham at $4,861 per year vs $2,217 in the GTA.

The wage calculations also factor in adult education, medical expenses, illness and insurance, internet and cell phone costs, childcare and other expenses such as personal care items.

To learn more, click here.

(The living wage regions are derived from Statistics Canada’s geographic concept of economic regions, which are geographic units defined by Statistics Canada to represent regional economies. Ajax and Pickering in Durham Region are included in the Toronto CMA while the rest of the lakeshore communities in the region are part of the Oshawa CMA. The Ontario Living Wage Network made the call this year to include Durham Region as a whole and include in the East region to avoid confusion.)

With files from Ashley Newport