There is no province in Canada where workers making minimum wage can afford rent without spending more than 30 per cent of their income, according to a new analysis from the Canadian Centre for Policy Alternatives.
The study calculated the “rental wage,” the hourly wage required to afford rent while working 40 hours a week and spending no more than 30 per cent of income on housing. Thirty per cent of income for housing is what Statistics Canada considers affordable.
The analysis found the rental wage is considerably higher than minimum wage across the country
In Alberta, the rental wage was found to be $21.42 per hour for a one-bedroom home and $25.04 for a two-bedroom.
British Columbia, Alberta and Ontario have the highest minimum wages but the report notes this does not translate to better living conditions because landlords collect a larger portion of the wages through high rental rates.
According to the latest report from Rentals.ca and Urbanation, the average cost of a one-bedroom unit in June in Lethbridge was $1,176 and a two bedroom was $1,377. The city has among the lowest rental rates in the country of the 35 included in the report.
READ MORE: June rental rates in Lethbridge remain among the lowest in the country
In Vancouver and Toronto, two full-time minimum wage workers cannot have a one-bedroom unit without spending more than 30 per cent of their combined income.
“The findings presented in this report 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 and allow the use of rental accommodation as an asset class,” reads a portion of the report’s summary.
“In other words, the mess in which we find ourselves is due to bosses keeping wages down with help from provincial governments that set the minimum wage and federal governments that control monetary policy.”
It also points to governments’ failure to build, finance and acquire the right kind of rental housing and says this is compounded by landlords using political influence to weaken rental market regulation.
“Markets do not solve the problems they create. When the desired outcome is housing security rather than profit, governments must regulate markets and support non-market housing,” the summary concludes.