A rent report is shedding light on what it says is an alarming disconnect between wages and the cost of housing in major Canadian cities like Vancouver.
The report comes from The Monitor, which analyzed a 2023 report from the Canadian Centre for Policy Alternatives (CCPA). The report includes information about what the CCPA calls a “rental wage,” or the hourly wage required to afford rent while working 40 hours per week and spending no more than 30% on housing.
“Put simply, the rental wage is how much people need to earn to pay rent without spending too much on it and sacrificing other basic needs like food and clothing.”
Some of the key takeaways from the report include the fact that between October 2022 and 2023, minimum wage increases fell behind rental wage increases in every province except Manitoba. Another alarming finding is that in 29 of 37 major cities, rent for a two-bedroom unit consumed 80 or more hours of minimum-wage work.
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While a minimum wage worker would potentially see about $30,000 a year after tax, that would leave very little a month for extra expenses, and with rent prices being so high, it would fall far out of reach of the CCPA’s rental wage metric.
“Tenants in Vancouver cannot afford a two-bedroom unit even with the combined income of two full-time minimum-wage workers,” the report states.
The report suggests that the situation will only get worse. While there is a rent cap in BC for existing tenancies, unregulated rent increases can occur once a unit is vacated. Without vacancy control, a landlord’s ability to raise the rent is unlimited, it says. The average increase in Vancouver was 34%. Only Toronto saw a higher increase, at 40%. The report adds, “There is no reason to believe similar increases won’t happen next year.”
The CCPA published a rental wage report in 2019, and between that and the 2023 report, the gap between the rental wage and the minimum wage increased.
It’s important to note that BC’s minimum wage increased in 2024 to $17.40 an hour, making some of the 2023 figures below out of date.
As a province, BC has the highest minimum wage, but it also has the highest rental wages:
Numbers are from 2023 and do not reflect BC’s current minimum wage increase. The Monitor
As a city, Vancouver’s rental wages are higher than the province of BC. The one-bedroom rental wage in Vancouver is $34.98, while the two-bedroom rental wage is $45.29.
The Monitor
“Higher minimum wages don’t always translate into better living conditions because landlords capture a large share of wage gains through rent hikes. Hard-fought-for wage increases should improve the material conditions of working families, not go back into the pockets of landlords, ” the report says.
The CCPA, a think tank focused on social justice and other issues, also has some scathing remarks for landlords, going so far as to call it “structural exploitation.”
“The disconnect between low wages and high rents is not simply a market imbalance. The large and growing gap illustrates how Canada’s employers and landlords double-dip on low-wage workers, paying them inadequate wages and then taking a large portion of their wage increases back in the form of rent increases.”
It adds that the structural exploitation of tenants “goes back to the expropriation of Indigenous land, the creation of land and housing markets, the establishment of financial institutions that buttress those markets, and the robust funding of enforcement apparatuses that ensure nobody stands in the way of profit.”