The annual cost of “getting ahead” for a single working-age adult in Toronto is $61,654 after taxes, according to a new report.
New research from the Wellesley Institute, Thriving in the City, published earlier this weekaims to quantify how much money an individual needs to earn to be physically, socially and psychologically healthy – or as they characterize it, “thrive” – in the city.
“Prospering is not just having the basic needs of food and housing covered. It includes connecting with your community and family, learning, and ensuring your long-term financial security,” said Wellesley Institute researcher Abinaya Balasubramaniam.
That “affluent” figure, calculated for a single person between the ages of 25 and 40, amounts to $61,654 after taxes in Toronto and $83,680 in Mississauga, according to the report, which examined two scenarios: a Toronto-based renter without a car and a Mississauga based condo owner with a car.
“This is well above the income of a minimum wage ($16.55 per hour), full-time (i.e. 35 hours per week) worker, which is $25,994 after taxes. The highest costs are associated with fundamental aspects of life, such as housing, transportation and savings,” the report states.
A person earning a living wage (the minimum required to cover the cost of living) amounts to $25.05 per hour, or $45,591 per year, before taxes in the Greater Toronto Area.
That’s only 74 per cent of the cost needed to “thrive” in Toronto and only 54 per cent for those living in the suburbs.
Research shows the cost of living in the GTA has skyrocketed since Wellesley Institute first conducted its Thriving in the City research in 2017 (a 33 per cent increase for single adults in Toronto), with housing costs, transportation and saving enough money for retirement the main drivers of the increase.
The authors estimated essential costs in nine major domains of life based on existing research, such as the Canadian Mortgage and Housing Corporation (CMHC) Rental Market Report and Statistics Canada data.
In particular, the average market rent for a one-bedroom apartment in Toronto costs $21,008 per year ($1,750.70 per month), while owning a one-bedroom condo in Mississauga amounts to $36,228 per year, taking into account mortgage payments, property and housing taxes. sure.
The average price of food totaled $5,310 per year, transportation totaled $2,877, and health care costs, including extended coverage and over-the-counter medications, cost $2,436.
The report pegged “social participation,” which includes books, internet, a smartphone plan and travel, at $7,356 a year.
While certain costs, such as social participation, can be reduced, higher costs are critical, such as housing, and would therefore have only a minimal effect on annual expenditures.
Raising the minimum wage is an important step forward, but research concludes that it is unlikely to ever be enough to support a prosperous welfare state.
“If we can’t raise wages to the level where people can prosper, then we have to reduce the cost of essentials like housing, food, utilities and transportation. We must also ensure that everyone has adequate access to the care and support they need. This should not be considered optional. If we don’t do it now, we will pay for it in the future,” said Dr. Kwame McKenzie, CEO of the Wellesley Institute.