How much you need to make to afford life in these Ontario cities

Although inflation has cooled and grocery prices aren’t growing as steeply as they were post-pandemic, high rental rates are continuing to put pressure on residents in Mississauga, Brampton and the rest of the GTA, making the geographic area unaffordable for minimum wage earners.

According to a recent report by the Ontario Living Wage Network, GTA residents must make at least $26 an hour to live comfortably. 

The report says that despite some positive trends, 2024 living wage rates have increased by an average of 3.4 per cent, largely due to shelter costs. According to the most recent National Rent Report, rents, while starting to decline slightly, are still high. In Toronto, the average price of a one-bedroom unit hit $2,380 last month (down over nine per cent from October 2023), while a one-bedroom in Mississauga cost about $2,308 (down just two per cent year-over-year). 

The average asking rent in Ontario was $2,350 last month, a decline of 5.7 per cent from the year before. 

Despite the decreases, the high rates mean the living wage in the GTA has increased from $25.05 in 2023 to $26. 

“For the most part the increase to this year’s living wage rate is mainly due to rising costs for rent in our province. Inflation of food costs may have calmed but still remain high relative to earlier years,” the report reads.

The London-Elgin-Oxford region has the lowest living wage in the province at $19.50, up from $18.85 year-over-year.

Other areas that require a higher living wage include Hamilton ($21.30), Grey Bruce Perth Huron Simcoe ($23.05), Ottawa ($22.80) and Dufferin Waterloo-Guelph-Wellington ($21.30).

The report notes that while the minimum wage climbed to $17.20 in October, it’s still far below what a resident would need to make to afford life in the GTA. 

In order to come up with its calculations, the OLWN factors in shelter, food, transportation and other expenses, including modest vacations and cultural and community experiences. 

According to the report, OLWN analyzes costs for three types of households: two parents aged 35 and two children aged 7 and 3, a single parent with a child aged 7, and a single adult. 

The living wage rate is the before-tax income that each adult would need to cover the expenses included in the “basket” for their family type. The calculation considers government transfers the family may receive and the payroll and income taxes the adults may pay.

The OLWN says that, historically, living wage rate increases have been fairly similar to the rate of inflation. With inflation hitting a 40-year high of 6.8 per cent in 2022, living wage rate increases were no surprise. That said, the report notes that general inflation “cannot fully explain changes in living wage rates in Ontario.” 

The report says the costs of food and shelter are two of the biggest expenses in the living wage calculation and that these costs increased by over 18 per cent compared to general inflation of 13.4 per cent between 2018 and 2022. 

OLWN says increases in food and rental costs, as well as transportation costs due to higher fuel prices, could account for 2023 living wage rate increases. 

In the report, the OLWN says it encourages employers to offer wages that help lower-income residents live more comfortably in their cities.

“This is the end goal of our calculation work and certification program: signing up certified living wage employers across Ontario. In order to qualify for certification, all employees must make at least a local living wage, and many see a raise as a result,” the report reads. 

“The problem of working poverty is complex, and is the product of issues of affordability, policy, cultural norms and attitudes about the value of work and more. Yet the most expedient first step is to simply ensure that a day’s work can cover that day’s expenses.” 

Living expenses

In the GTA, a family of four is projected to spend $12,213 annually on food, while a single family parent is expected to spend about $5,869 and a single person about $4,175. 

The report suggests that a family of four in the city spends $32,007 a year on shelter–by far the highest on the list of Ontario cities.

The report says a single-parent family is spending $26,614 and an individual is spending $23,641. 

For clothing, Ontario families are spending about $3,039 if they have four members. Single-parent families spend about $1,674 and individuals about $527.

For transportation (which may include both a car and public transit), families of four in the GTA can expect to spend 9,801 a year. Single-parent families could spend up to $7,584 and individuals could spend $2,217. 

The wage calculations also factor in adult education (one course with textbooks costs about $564), medical expenses, illness and insurance (up to $3,696 for a family of four), internet and cell phone costs ($461 for cell phone and $1,024 for internet in the GTA), childcare (anywhere from $8,374 to $14,358 in the GTA) and other expenses such as personal care items ($3,496 to $10,873 in the GTA). 

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