Affordability has been a challenge in Canada for decades, but it became a dominant national concern around 2023.
Housing prices and the financialization of housing had been rising since the early 2000s, yet the pandemic and subsequent economic shocks intensified these pressures, turning affordability into a top political and social issue.
But the crisis extends far beyond housing.
Canadians now struggle to afford essentials — food, child care, health care, and education. As costs continue to climb, what was once viewed as a regional or sector-specific problem has become a nationwide emergency.
Most proposed solutions centre on increasing the supply of affordable housing through faster approvals, zoning reform, and innovative construction methods. Others call for strengthening employment insurance, curbing housing speculation, or expanding targeted government programs.
While worthwhile, these approaches do not confront the underlying driver of the affordability crisis: wages have not kept pace with the soaring cost of living.
Treating symptoms without addressing the widening gap between incomes and costs will not solve the problem.
The Bank of Canada argues that long-term affordability requires raising productivity. “If we want to make things affordable, we need to raise our income,” said external deputy governor Nicolas Vincent. “And the way we grow our income is by increasing productivity.”
But in practice, calls for higher productivity often translate into lower corporate taxes and lighter regulation — policies premised on the hope that gains will eventually trickle down to workers. This theory has a long history of failing to deliver broad-based wage growth.
If wages are to rise meaningfully, Canada must look beyond market-driven solutions that have repeatedly fallen short. The urgency is greatest for low-income Canadians, who cannot wait for the market to correct what it has failed to correct for decades.
Canadians for Tax Fairness reports that after-tax income for the bottom 50 per cent has grown at less than half the rate of real GDP per capita. Had it merely kept pace with economic growth, 15 million Canadians would have had an average of $6,450 more in 2022.
Statistics Canada notes that 18.5 per cent of workers earned less than $20 an hour in 2024; in Ontario, about 25 per cent earned less than $20 an hour in 2023.
Unsurprisingly, low-income households often spend more than half their budgets on housing and about 30 per cent on food, says Richard Matern of Food Banks Canada.
A report by the National Union of Public and General Employees found that inflation pushed low-income workers’ spending on necessities up 11.3 per cent between 2019 and 2024, leaving them with virtually no disposable income.
As wages lag behind rising food prices, more Canadians are turning to food banks. Monthly visits have reached 2.2 million this year — double the 2019 level. Food Banks Canada notes that while it took decades to reach one million monthly visits, it took only five years to double that.
The situation is even worse in Toronto, where more than one in 10 residents relies on food banks, according to the Who’s Hungry 2025 report.
Nationally, 40 per cent of food bank users depend on social assistance or disability benefits, but a striking 19 per cent report employment as their main income source — a 58 per cent increase in six years.
In Toronto, 37 per cent rely primarily on wages. This reflects both inadequate social assistance rates and wages too low to cover basic living costs, even for full-time workers.
The Who’s Hungry 2025 report warns that hunger is becoming a long-term reality for people with full-time or multiple jobs.
“Food banks,” says Matern, “are becoming more and more necessary for survival.”
Jasmine Ramze Rezaee of Right to Food is blunt: “Hunger in Canada is not about food supply. It’s about income. And it is a policy failure, not a personal shortcoming.”
The expansion of food banks in a wealthy country is nothing to celebrate. It should shame us.
Canada is one of the richest nations in the world, yet it fails to provide either adequate social supports or wages that enable families to meet basic needs. And this should not be tolerated. If we can afford 88 F-35 fighter jets, we can certainly afford to eliminate food insecurity.
That so many working people cannot satisfy their basic needs reveals that the free-market system, as structured, is not working for them. Governments implicitly acknowledge this through minimum-wage legislation, yet current minimum wages fall far short of what constitutes a living wage.
A living wage covers basic necessities, supports healthy child development, avoids financial stress, and allows participation in community life.
In Ontario, the minimum wage is $17.60 an hour, while the living wage in the Greater Toronto Area is estimated at $27.20. This gap helps explain why 37 per cent of Toronto food bank users are low-income workers.
“If you’re working that minimum wage job, you’re going to be short by $336 a week,” says Craig Pickthorne of the Ontario Living Wage Network. Closing this gap would go a long way toward reducing poverty and its damaging consequences.
Predictably, conservative politicians and corporate leaders argue that higher minimum wages would force firms to cut jobs. Yet Ontario’s average household income is about $129,000.
If businesses in one of the wealthiest jurisdictions in the world can survive only by paying poverty-level wages, we should question whether they ought to remain in business at all — and whether their exit might actually push the economy toward higher productivity.
Indeed, the need to pay higher wages is one of the strongest incentives for firms to invest in productivity-enhancing technologies — far more effective than subsidies or tax cuts.
If Canada is serious about solving the affordability crisis, it must start by ensuring that work pays enough to live.
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