Rents in Canada are so high that minimum-wage earners have to allocate much of their full-time work hours to cover the average cost an apartment, thereby jeopardizing their push for financial independence, according to a new report by Zoocasa Realty Inc.
“Financial independence and stable housing have long been seen as markers of adulthood, but for many young Canadians, these milestones are slipping out of reach,” the report released on Aug. 10 said.
The Zoocasa report said 29 of the 60 cities it looked at required minimum-wage workers to dedicate 120-plus hours of an average 174-hour work month at eight hours a day to cover their rent. People in only eight cities could work less than 100 hours a month to cover rent.
But in North Vancouver, a minimum-wage employee would need to direct 95 per cent or 164 hours from the month toward rent, based on a provincial minimum wage of $18.25 and the average rent for all apartments, which is $2,983.
The other top five cities where rent gobbles up the most working hours are clustered in British Columbia and Ontario.
In Vancouver, 87 per cent of their hours worked would need to be earmarked for rent, while it’s 84 per cent in North York, part of the Greater Toronto Area (GTA), tech-hub Kanata, just outside Ottawa, and the City of Toronto.
The report said all the areas in the GTA were “uniformly high-cost,” requiring between 118 and 146 hours of work.
Ontario had the widest variance between hours needed to cover rent, ranging from the lowest at 95 in Sarnia to a high of 146 hours in North York.
Zoocasa said the cross-provincial gaps are due to the cost of rent rather than to different minimum wages.
“Since provinces set minimum wage uniformly, any variation in the number of work hours needed to afford rent comes entirely from differences in local rent levels, making rent the key lever for closing the affordability gap, not wage policy,” it said.
For example, B.C. has the highest provincial minimum wage at $18.25 an hour, but that isn’t helping with affordability. Four B.C. cities ranked among the top 10 for most hours needed to cover rent.
Alberta, meanwhile, has the lowest minimum wage at $15 an hour. Affordability problems have risen in communities around Calgary.
In Airdrie, just outside the oil capital, workers need to dedicate 79 per cent of their work hours to rent compared with 73 per cent in Calgary.
The situation is better in other Alberta cities such as Edmonton, Red Deer, Lethbridge and Medicine Hat.
In Saskatchewan, where Zoocasa said “rents haven’t escalated the way they have in B.C. or Ontario,” 95 hours of work in Regina will cover rent.
Halifax ranked sixth for the number of hours needed to cover rent at 143, or 85 per cent of people’s time on the job. The most affordable place nationally was St. John’s NL, where 74 hours of work would cover rent for the month.
However, rental affordability could remain elusive.
A Rentals.ca report last week said national rents fell four per cent in July from a year ago — the 22nd annual consecutive rental decrease — bringing the average asking rent to about $2,037. But it said overall annual decreases in rent are slowing and they are rising month over month.
“Canada’s rental market is showing signs of stabilizing, but not yet recovering,” said Shaun Hildebrand, president of Urbanation Inc., owned by Landlord Web Solutions Inc., which is also the owner of Rentals.ca.
In Toronto, rents have increased month over month, is on the verge of posting a year-over-year increase and could be “a leading indicator” for where the market is headed,” he said.
• Email: gmvsuhanic@postmedia.com