Toronto, Vancouver Residents Must Make at Least $40 per Hour to Reasonably Afford 2-Bedroom Apartment, Report Suggests

Condo towers dot the Toronto skyline as a pedestrian makes his way through the COVID-19-restricted winter landscape on Jan. 28, 2021. Frank Gunn/The Canadian Press

Toronto and Vancouver residents must make at least $40 per hour working a full-time job if they hope to reasonably afford a two-bedroom apartment within the city, suggests a new report by an Ottawa-based think tank.

The Canadian Centre for Policy Alternatives (CCPA) published a report on July 18 studying the gap between Canada’s minimum wage as it varies province-by-province and what it costs to rent an apartment in major cities across the country.

For the study, the report’s authors calculated a “rental wage,” which calculates the hourly wage an individual must earn to afford rent while also working a standard 40-hour week and spending no more than 30 percent of their income on housing.

The report’s authors found that the rental wage needed to afford a one-bedroom apartment in Vancouver is over $32.30, while in Toronto it is just over $33.60.

Renting a two-bedroom apartment in Toronto requires a rental wage of around $40.00, while in Vancouver it comes in even higher at $42.60.

The British Columbia cities of Kelowna and Victoria are the next two most expensive cities in Canada for renting two-bedroom apartments as they both require rental wages of over $34.80, while Ottawa and Halifax are the fifth and sixth most expensive cities for two-bedroom units.

The report’s authors also found that each province’s rental wage is “considerably higher” than its minimum wage.

“In practice, this means that 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 report says.

Toronto and Vancouver

Furthermore, the one-bedroom rental wage is higher than the minimum wage in all of Canada’s cities except for Sherbrooke, Trois-Rivières, and Saguenay, all of which are located in Quebec.

“Vancouver and Toronto are the worst culprits,” the report says. “Even two full-time minimum-wage workers cannot afford a one-bedroom unit without spending more than 30 percent of their combined income on housing.”

The new report came out soon after Royal LePage published a forecast on July 13 predicting that aggregate home prices in the Greater Toronto Area will climb by another 11 percent in the final quarter of 2023.

“As affordability and low supply continue to challenge buyers, the region’s rental market is also getting tighter,” the real estate firm wrote.

Royal LePage added that the average rental price of a one-bedroom apartment in the Toronto area already increased more than 15 percent year-over-year in the first quarter of 2023.

“Chronic shortage of housing supply, due in part to sellers’ hesitancy to list, continues to put upward pressure on home prices,” the firm wrote.