Finding an affordable apartment in many of Canada's major cities has become an elusive dream for minimum wage earners.

According to a startling new report from the Canadian Centre for Policy Alternatives (CCPA), the study reveals that only 22 neighborhoods out of nearly 800 in urban areas offer average rent for two-bedroom apartments that are accessible to those earning minimum wage—a sharp decline from the previous analysis conducted in 2019.

Minimum Wage Workers' Housing Crisis

The CCPA report highlights that out of 62 urban centers, workers earning minimum wage can only afford a one-bedroom apartment in a mere nine locations, and just three areas offer a feasible two-bedroom option. The cities where affordable rentals can still be found include Brandon, Manitoba; Cape Breton, Nova Scotia; and several smaller cities in Quebec.

Rising Hours and Rental Wages

The data underscores a troubling trend: minimum wage workers now have to toil longer hours to meet rent payments compared to just a few years ago. Cities such as Vancouver, Toronto, and Calgary offer little respite, with even dual-income households relying on minimum wage struggling to find suitable two-bedroom units.

Utilizing data from the Canadian Mortgage and Housing Corporation (CMHC), the CCPA introduced the concept of a "rental wage"—an hourly rate needed to afford an average apartment while adhering to the benchmark that housing should not consume more than 30% of a household’s before-tax income. For instance, in Toronto’s Kennedy Park neighborhood, the rental wage reaches an astounding $25 per hour, while the actual minimum wage lingers at $16.55.

Rental Wage Disparities

The disparities are clear: in provinces like British Columbia, the gap between the rental wage and the minimum wage for a one-bedroom apartment is as high as $13.21. Meanwhile, Quebec presents a more manageable gap for two-bedroom rentals at $4.79, but pockets like Drummondville and Sherbrooke remain rare havens where the rental wage is still lower than the minimum wage.

The Rent Surge: What’s Driving Costs Up?

Several factors have worsened the rental crisis, including population increases and slow construction rates amid climbing borrowing costs, which have collectively pushed average national rents for one-bedroom units up by more than 30% since the pandemic's lowest point in April 2021. According to Rentals.ca, the average asking rent has soared to $1,849 as of June 2023.

Economists, including those from Desjardins Group, have identified rent hikes as a key component driving inflation in Canada. However, recent trends suggest a slight easing of rent increases, with rates rising just 3.3% year-over-year from August 2023 to August 2024.

Advocating for Solutions

The CCPA advocates for "modern rent controls" as a necessary solution to this alarming issue, calling on provincial governments to enact policies that would curb exploitative rent increases. Conversely, the Canadian Federation of Apartment Associations (CFAA) argues that the crux of the problem lies in inadequate supply, exacerbated by high construction costs linked to government taxes and fees that can account for more than 30% of development expenses.

The Urgent Need for New Housing Units

With a household rental market where an estimated 30% of Canadians live in rented accommodations, the demand for new rental units is critical. According to CFAA interim president Tony Irwin, Canada requires a staggering 3.5 million new housing units to meet current needs.

A Call to Action

As discussions around housing affordability heat up, the question remains: Will the government take adequate action to ease the burden on Canada’s lowest earners? The clock is ticking, and the urgency to address this crisis has never been more pressing.