Prospects bleak for minimum wage renters in Hamilton, Oshawa and Niagara – report

A study examining the gap between the minimum wage and what it costs to rent an apartment in Canada paints a stark picture of life for people earning less than the living wage.

According to data from the Monitor, the Canadian Centre for Policy Alternatives’ current affairs magazine, covering social, economic and environmental justice issues, there are zero provinces and just three cities – all in Quebec – where workers can afford a one-bedroom apartment at minimum wage.

It’s worse for two-bedroom apartments. In the six cities cited in the report with the highest two-bedroom rental wage – Vancouver, Toronto, Kelowna, Victoria, Ottawa, and Halifax – the rental wage is more than twice the minimum wage.

The rental wage measure calculates the hourly wage required to afford rent while working a standard 40-hour week and spending no more than 30 per cent of income on housing. In those six cities two full-time minimum wage workers cannot rent a two-bedroom home without spending more than 30 per cent of their combined income on housing.

The rental wage is considerably higher than minimum wage in every province and even in the three provinces with the highest minimum wage in Canada – B.C., Ontario and Alberta – there’s a shortfall in what minimum-wage workers earn and the rent they have to pay.

Report authors David Macdonald and Ricardo Tranjan say this means the higher minimum wages in these provinces “don’t directly translate into better living conditions because landlords capture a larger share of those wages through high rents.”

The minimum wage in Ontario is $15.50 per hours but the rental wage here is $25.96 for a one-bedroom apartment and $29.90 for a two-bedroom unit.

In the Golden Horseshoe only St. Catharines-Niagara, Oshawa and Hamilton have rental wages under the Ontario average. St. Catharines is $20.60 (one-bedroom) and $24.23 (two-bedroom), Oshawa is $24.73 and $$27.88; and Hamilton is $23.02 and $28.77.

The trend is getting worse, the authors added, with living conditions declining since their last report in 2018. From 2018 to 2022, the number of hours it takes for a minimum-wage earner in Oshawa to afford a two-bedroom apartment climbed from 89 to 94. In St. Catharines-Niagara it’s 81 hours, but number is up seven from 2018. In Hamilton the forecast is even more dire: 97 hours are required for a minimum wage earner to afford a two-bedroom unit; up a dozen hours from 2018.

St. Catharines is the only Golden Horseshoe community with a single neighbourhood where renters can afford housing on minimum wage. There were three in 2018.

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, say the authors. “They are likely spending too much on rent, living in units that are too small, or, in many cases, both.”

McDonald and Tranjan believe the findings should not be interpreted “simply as a supply and demand problem.” At least three sets of factors make rent too high for low-wage earners: wage suppression policies; low supply of rental housing, – especially purpose-built, rent-controlled, and non-market units – and poorly regulated rental markets that “privilege profit-making over housing security.”

“The mess in which we find ourselves in,” they declared, “is due to bosses keeping wages down with help from provincial governments that set the minimum wage and federal governments that control monetary policy.”

Canada needs a larger share of rental housing outside of the private, for-profit rental market, they added.

A comparison between rental wages and social assistance rates would arrive at even more dire findings. In 2021, social assistance rates for single individuals who were considered employed equalled between 31 per cent and 51 per cent of the income of a full-time minimum wage worker, depending on the province. The income of a couple with two children in receipt of social assistance corresponded to between 55 per cent and 73 per cent of the combined income of two full-time minimum-wage workers.