Full Time Work No Longer Pays the Rent

Full time work at minimum wage is only affordable in 8 cities in the country according to the CCPA.

Photo by Bruno Guerrero on Unsplash

In most Canadian cities, working full-time at minimum wage is not enough to pay rent.

A new report from the Canadian Centre for Policy Alternatives (CCPA) analyzed 62 cities across the country and found only eight where a full-time minimum wage job makes rent affordable. Six of those cities are in Quebec.

The study uses the common measure that rent should consume no more than 30 per cent of income. By that standard, Toronto and Vancouver are the epicenters of unaffordability: minimum wage would need to be $38 an hour, or roughly $79,000 a year, to afford a one-bedroom apartment, more than two times the current minimum wage. Montreal, once a bastion of affordability, has seen rents climb 42 per cent since 2018. Minimum wage workers there now devote about half their take-home pay to rent—about two weeks’ earnings each month.

Advocates have long argued for more off-market housing, but Canada’s entrenched view of homes as financial assets complicates reform. Eve-Lyne Couturier, researcher at the Institut de recherche et d’informations socioéconomiques, calls this approach flawed.

“If we want to take housing off the market, perhaps we should focus on a universal pension framework– a system that provides adequate income once retired,” she said.

For decades, retirement has been treated as an individual investment. If someone can’t afford to live after retiring, it’s seen as a personal failure. Marie-José Houle, the federal housing advocate, says Canada’s approach is wrong.

“Reframe housing as infrastructure,” she said. “So that they’ve got long, amortized mortgages around them with the best rates possible– so that they’re not financialized.”

“Governments have favored individual pension plans, defined contribution plans, over defined benefit plans, or universal plans that support retirement income. Retirement income is not sufficient. So, people find themselves in unrestricted jobs, or jobs with a plan that doesn't meet their retirement needs,” Couturier said.

Marc Lee, senior economist with the CCPA, says Canada’s focus on housing crowds out other investments. “We’ve been investing so much into housing instead of machinery, equipment, or intellectual property. You know, the real capital in capitalism that leads to higher levels of income over time.”

Canada’s dependence on housing as a source of wealth has left younger generations shut out. In 2011, 44 per cent of Canadians aged 25–29 owned their homes. Today, only 36 per cent do. Affordability gaps are stark. The CCPA calculates that in Vancouver, it would take 2.2 people working full-time at minimum wage to afford a one-bedroom apartment. A two-bedroom requires more than three minimum wage jobs worked full time. The pattern extends beyond the major population hubs as well. In Halifax—once considered affordable—it now takes 1.8 minimum wage jobs to rent a one-bedroom apartment. Even in Saskatchewan, it takes 1.5.

Couturier says that’s because “minimum wage is not based on what we need to pay for our goods, our services, it is not based on what people need to survive, but on the strength of the economy up to a certain point.”

Arguments against raising the minimum wage often hinge on fears of higher consumer prices. But, as Couturier explains, that logic is “based on a lot of theory, not practice.” Only a minority of workers earn minimum wage, meaning most businesses wouldn’t see their bottom line affected.

Housing unaffordability also stifles economic mobility. Jobs may exist in certain regions, but workers can’t take them if housing is out of reach. In Vancouver and Toronto, the wage needed to afford a home sits at about $38 an hour. Calgary comes next at $30. These jumps leave workers with few options. The jump between needing $30 an hour and $38 is astronomical for most.

Vancouver and Toronto’s job density pulls in workers, but that inflow drives prices higher. “It’s a function of being larger metropolises, where there is a lot of diversity and opportunity,” Lee said. But, he added, “People can’t afford to get on to that first rung of the housing ladder,” noting that most young people must lean on parents unless they land “extremely well-paying work.”

For Houle, the answer is to “reframe” housing policy through a human rights lens. “With this lens, the government could transform the market in Canada to prioritize people as opposed to speculative investment.” But she flagged a persistent obstacle: “lack of coordination between governments.”

Nonetheless, the Trudeau government’s historic investments are finally paying off, and certainly over the next five years as more investments are made, and the previous government’s investments are made more apparent, Carney & friends will get the credit for the state of the housing market.

The housing market is currently beginning to suffer, with some speculators saying that there are too many homes that have been built which could decrease costs. Immigration levels have been capped, which will flatten population growth even as new housing is built.

Hypothetically that will ease prices, to the chagrin of these speculators, but Lee warns the market is “tending to be sticky in the short term.” With tariffs, slowing growth, and stagnant wages, he predicts that downward pressure on housing prices is inevitable.

But a rapid drop would bring its own dangers. Housing deflation could trigger an economic crisis—a risk that has hung over Canada for years now. With U.S. instability and the Canadian economy contracting 1.6 per cent this quarter, the threat is sharper. Deflation is usually the sign of an economic crisis.

Couturier points out that crises always hit the most vulnerable first. “The people touched by an economic crisis are never those who are able to withstand it… It’s people who live paycheque to paycheque. If businesses are cutting prices, it isn’t to help people out, it’s because of loss of employment, poor living conditions, and services being cut.”

She added: “We have a social crisis, we have an environmental crisis, we have extremists, we have a genocide in Gaza. We no longer know how to tackle it in order to change it. But clearly, the political system we have, the economic system we have, is not giving us the necessary leverage to tackle these problems. The political and economic system we have seems to feed off this type of crisis rather than trying to resolve it.”

Whether Canada’s housing crisis can be solved before conditions worsen for working people remains uncertain. But as it stands, in much of the country, a full-time job at minimum wage is no longer enough to keep a roof overhead and the future of wages across the country is uncertain.