The answer is essentially the entire month!
Toronto Today reports that the finding comes from a new report by real estate technology firm Zoocasa, which analyzed Canada-wide data from Rentals.ca, a popular house hunting platform.
A full-time employee earning Ontario’s $17.60 minimum wage would need to work 145 hours a month to pay the average asking rent of $2,543 for a one-bedroom unit in Toronto. In neighbouring North York, that figure climbs to 146 hours.
Typical full-time hours range from about 160 to 170 per month, leaving anywhere from 15 to 25 hours’ worth of wages for everything else, including groceries, transit and other costs.
Together, Toronto and North York represent the heaviest rent-to-hours-worked burdens in Ontario, according to Zoocasa’s analysis.
They trail only North Vancouver and Vancouver nationally, where one-bedroom asking rents average $2,983 and $2,723 despite a slightly higher $18.25 minimum wage. There, minimum wage earners have to put in 164 and 150 hours, respectively, to afford their own one-bedroom apartment.
In other GTA municipalities, low-wage workers don’t get much of a break. Mississauga, where the average asking rent for a one-bedroom apartment is $2,360, requires 135 hours. In Brampton, it takes 127 hours of minimum-wage work to afford the average $2,231 one-bedroom rent.
While the study suggests a bleak outlook for Toronto’s minimum-wage workers, the reality is actually worse. That’s because the report didn’t factor in the typical tax burden. Instead, it simply divided the average asking rents provided by Rent.ca by Ontario’s $17.60 minimum wage to get to 145 hours.
But gross pay doesn’t equal what a minimum wage worker walks away with after the cheque or direct deposit hits their bank account. Federal and provincial income taxes and mandatory deductions – such as Employment Insurance and the Canada Pension Plan – generally strip away about 15 to 17 percent of total earnings.
That leaves the standard minimum wage worker with an after-tax hourly income of about $14.50 to $15.
Redoing the math using actual spendable income means it doesn’t take 145 hours, or almost the entire month, to afford a one-bedroom apartment in Toronto – it requires 170 hours.
Since a typical full-time work month tops out at around 173 hours, renting a one-bedroom apartment alone takes up the entire budget.
But minimum-wage workers can receive money back from tax rebates like the GST/HST benefit, which was recently rebranded and expanded as the Canada Groceries and Essentials Benefit.
A single worker with no children can get up to $679 per year, while parents can get up to $234 extra for every child under 19.
However, $679 per year translates to less than $60 per month. Further, these rebates are generally paid quarterly, while rent is usually due at the first of every month and paycheques arrive biweekly or twice a month.
The Zoocasa report and the underlying Rentals.ca data, hones in on a specific slice of the housing market. Because the report looks at asking rents for vacant and newly listed units, the 145-hour figure only reflects the barrier to entry for someone signing a new lease today. It doesn’t capture the rent paid by existing tenants, some of whom are protected by provincial rent controls.
Further, the Rentals.ca data doesn’t include single-room rentals, which tend to cater to lower-wage workers, driving the average price higher.
The economic pressure is changing how Torontonians – and Canadians – live, according to the report.
“Millennials ages 25 to 39 are nearly twice as likely to live with their parents as Baby Boomers were at the same age,” it said, adding the trend is driven “less by lifestyle preference and more by financial necessity.”
