No Funds City:

Why Vancouver millennials have the lowest discretionary income in Canada

Highlights
Vancouver millennials buying a property at average cost in 2016 have the lowest discretionary income of
10 Canadian cities analyzed.
If a typical millennial couple purchased a Vancouver property at average cost in 2016 they would go into debt
by $2,745 a year after paying for essential expenses including taxes, healthcare premiums, food, utilities, public
transportation, clothing and housing.
In 2015, a typical Vancouver millennial household of two, aged 25-34, earned $72,291 the second lowest rate
in Canada.
Yearly costs for an average home purchased in Metro Vancouver in 2016 is $44,354.
Toronto had the next most expensive housing market at an average cost of $33,405 annually for a typical home
purchased in 2016 $11,000 less per year compared to Vancouver. It also had the next lowest discretionary income
at $3,379 annually for millennial couples who purchased a home at an average price in 2016.
Millennials in Victoria are better off than in Vancouver, but still ranked third for the least amount of discretionary
income nationally. Millennial couples who purchased a Victoria property at average cost in 2016 have an annual
discretionary income of $12,200.
By comparison, the average millennial in Edmonton has more than $47,000 in annual discretionary income
the highest in Canada.
If a typical millennial couple were to purchase a townhouse at average cost in Vancouver in 2016, their discretionary
income would be $9,548 annually.
If a typical millennial couple were to purchase a condo at average cost in Vancouver in 2016, their discretionary
income would be $16,422, annually (not including condo fees, which could be as much as $500 monthly).
Growing families in Vancouver face a dramatically more challenging financial situation. The average cost of
childcare for one child in Vancouver is $14,580 annually.
With one child in full-time paid care, discretionary income of average millennial couples would be about:
-$17,325 (debt) annually if they purchased a Vancouver property at average cost in 2016

-$5,031 (debt) annually if they purchased a Vancouver townhouse at average cost in 2016

$1,674 annually (not including strata fees) if they purchased a Vancouver condo at average cost in 2016

-$29,597 (debt) annually, not including strata fees, if they purchased a three-bedroom condo at average cost in 2015

$771 annually if they rented a three-bedroom unit outside the city centre in 2016.

About 16% of families who rent in Vancouver are overcrowded in their current housing arrangement.
The overall vacancy rate for rented units in Metro Vancouver is under one per cent.
Among other possible solutions, the report recommends creating incentives for developing affordable,
family-friendly housing and dramatically increasing support for rental housing.

Make Good Money (TM) is a trademark of Vancouver City Savings Credit Union.

Introduction

Spend or save: disposable income

and life enjoyment

As housing prices in Vancouver have risen, so have questions

around how the largest generation in history will afford a
home in an increasingly out of reach housing market. And
are millennials staying in Vancouver or are they leaving for
more affordable markets? Recent news reports point to a
millennial exodus from Vancouver and relocation to more
affordable places, like Victoria and Kelowna. Meanwhile,
local entrepreneurs and millennials are adding to the
dialogue by saying unaffordability is emptying Vancouver
of one of its most valuable assets young people from the
city who want to stay invested in it.

The amount of money in your pocket is directly correlated

to the ability to live a happy life. While there is much good
work going on worldwide to attempt to quantify a measure
of happiness that goes beyond a simplistic measure of gross
domestic product (GDP), most people intuitively know that
the difference between income and expenses is the basic
economic calculation. This is because peoples lives are lived
in between these margins.
In 2010, Princeton University published a landmark study
that related income to emotional well-being, showing
conclusively that high income doesnt buy happiness.1
Although people with high incomes report greater life
evaluation (the thoughts people think about their life),
their emotional well-being is no higher than those with low
income. In other words, high income buys satisfaction but
not happiness. However, the study also revealed that money
does buy happiness for those with incomes below US
$75,000. In this income group, increased earning power does
translate into greater well-being.

Yet others point to a growing population of 20- to 34-yearolds in the city: a 9.5% hike in the last 10 years. This increase
could simply be attributed to the fact that this age cohort
is the largest in generation in history, so naturally their
numbers would rise. Furthermore, immigration rules favour
people under 35, which could create a smokescreen effect
as new Canadians arriving in Vancouver obscure the reality
that a large number of millennials are also leaving.
The question is also not one that is limited to Vancouver,
either. The affordability of other nearby cities such as
Victoria are now being called into question. And earlier
in the year, The Economist published an article labelling
millennials as Generation Uphill. Although millennials are
richer, better educated and more connected than any
previous generation, their talents are being squandered. In
rich nations, 15% are NEETs: not in education, employment
or training. That figure rises to 25% in middle-income
countries. The path to adulthood is longer and more
complicated because it is taking longer to get established
and become financially secure.

Clearly a certain basic amount of income is required for a

happy life. Although not analyzed in the Princeton study,
the relationship between income and required life expenses
is important in showing this relationship between money
and happiness. If an individual cannot purchase basic life
requirements (housing, food, health), their emotional wellbeing will suffer. Beyond basic expenses, people generally
want to have enough flexibility in their incomes to be able
to also spend time with friends, enjoy leisure, support
others and save for the future. These activities also support
a happy life. However, this desire is not insatiable, as the
Princeton study shows. At a certain point, increased income
can no longer supply increased happiness. (It is beyond the
scope of this report, but we can surmise that once a minimum
level of individual happiness is achieved, social and public
goods become more important to the happiness equation).

The millennial conundrum has become particularly acute

in Vancouver, which has built its image as an outdoor
playground. Local economic pressures are putting a fine
point on the realities raised above, with the underlying
question: what will become of Vancouver if the average
family cannot afford to live here? This report brings a
wider focus to this question. By comparing the financial
realities of young people across the country, it is possible
to discover if life in Vancouver is substantially harder
than anywhere else in the country. If it is, this would lend
motivation for families to leave and data for policymakers
to try to stem that tide.

As a result, we see that part of living a happy life is having a

little extra money left over after all the monthly bills have
been paid. This difference is called discretionary income
the income we have, beyond our obligations, to choose to
spend where we want.
It is out of discretionary income that earners purchase
experiences, save for their future and give to people and
causes they care about. In other words, it is out of our
discretionary income that well-being is purchased. This wellbeing has a number of dimensions. First, individuals may

A comparison of 10 Canadian cities

choose to purchase quality of life in the present. They may go

to the movies, upgrade their phone or travel abroad. Second,
they choose to purchase quality of life in the future. This may
be through a savings account, an RRSP or loaning money to
the kids. Third, discretionary income could promote social
well-being: they may buy a gift for a friend, give to a charity
or sponsor a refugee. These things may not have direct
personal feedback, but promote well-being nonetheless.

It should come as no surprise that the economics of daily life

are tight in Vancouver. Anecdotal evidence and case studies
abound as Vancouverites struggle to cope with some of the
highest housing and food prices across Canada. However,
a deeper dive into the economic lives of young people in
the Vancouver area reveals a disturbing reality: Vancouver
millennials have the lowest levels of discretionary income when
compared to their counterparts in other major Canadian cities.

While all of the above are essential to a rounded life that

maximizes well-being, there is a final use for discretionary
income that is particularly relevant for millennials: paying
off debt.

Discretionary income is the amount of earnings left over

after paying for the basic requirements of life. This is
calculated by starting with gross salary and subtracting
the mandatory government payments of income tax,
employment insurance and pension contributions. From this
figure, payments for the basic needs of life are accounted
for. For the purposes of this report, basic life expenses
include food, housing, utilities (such as electricity and
water), public transportation and clothing. While expenses
such as credit card or student debt payments are included in
this category, these payments are not necessarily common
to all earners and therefore have not been included.
Similarly, while it is true that many Vancouver homeowners
may supplement their salaried income with rental income,
this is not currently the standard and has been excluded
from our calculations. Therefore, the best way to estimate
the experience of Vancouver millennials is to use these
income and expense categories as the foundation for a
detailed analysis show the income levels and mandatory
expenses of two-person families where the oldest individual
is between the ages of 25 and 34.

Millennials are the most educated generation in history.2

This education comes at a high cost, and the effects of
this are at the forefront of millennial minds. A recent
Facebook study of the financial priorities of U.S. millennials
found that 46% define financial success as being debt-free.
Furthermore, 57% prefer to pay for purchases with cash,
reflecting an inherent predisposition away from carrying
consumer debt. So well-being for many millennials means
being able to have enough discretionary income to avoid
credit and pay off their debt.
Vancouver is a world-class city, offering an almost limitless
number of opportunities to increase well-being. Renowned
experiences are outside the doorstep. New businesses and
innovations are ripe to invest in. Social consciousness is
high. And yet, Vancouver also claims the gloomy title of
Canadas Unhappiest City.3 Insight into relative discretionary
income levels across Canada provides a clue as to a
potential reason for this apparent dichotomy.

Table 1: Disposable income for average millennial couple (aged 25-34) by city prior to housing and expenses.
City

Median income

Income tax

Contributions

Edmonton

$107,120

$17,642

$5,963

$83,515

Calgary

$104,581

$17,224

$5,822

$81,536

Ottawa

$93,348

$16,563

$6,744

$70,041

Kitchener-Waterloo

$84,481

$14,990

$6,103

$63,388

Halifax

$82,384

$14,391

$6,214

$61,779

Victoria

$80,912

$12,817

$5,313

Winnipeg

$73,198

$12,374

$5,462

$55,362

Montreal

$75,284

$14,519

$6,274

$54,491

Vancouver

$72,291

$11,452

$4,747

Toronto

$67,744

$12,020

$4,894

Notes:
BC is the only Province that charges a separate healthcare premuim in addition to taxes.
Income data from Satscan CANSIM 111-0012, 2015 estimate by Vancity
Expenditure data from Survey of Household Spending 2014, 2015 estimate by Vancity
Housing data from Real Estate Board of respective city/region, March 2016, Annual mortgage estimated by Vancity
All figures average, except where noted

Healthcare

$1,632

$1,632

Disposable income

$61,149

$54,460
$50,829

Table 2 shows what it would look like if the average millennial

couple in Vancouver tried to purchase an average property
(which includes a condo, townhome or detached single home)
in the current market. The expenses added on top of carrying
this property are by no means an exhaustive list, but still the
numbers are clear: Vancouver millennials are in a tight spot.

category are more than $10,000 higher in the innovation hub

of Kitchener-Waterloo and Cambridge, while top-earning
Edmonton surpasses Vancouver by almost $35,000 per
year. The reasons for this disparity are not the focus of this
analysis, yet the disparity warrants further investigation.

In 2015, the typical Vancouver millennial household (two

people aged 25-34) earned only $72,291 the second lowest
rate in Canada. When used to pay Vancouver expenses,
this amount does not go far, especially if millennials opt to
purchase an average property.

However, the larger component of this situation aside

from the compulsory healthcare fee, unique to B.C. is the
cost of housing security in the Vancouver area. Temporarily
leaving the question of indefinite renting aside, we see
that average housing costs as a proportion of income in
Vancouver is the highest in Canada.

From this salary, $16,200 will go to taxes and other

government contributions, and a further $1,632 for
mandatory healthcare premiums. Some employers cover
this cost, though not all, so we have included this in the
list of expenses. This yields $54,460 in disposable income.
Provincial averages for food, utilities, public transportation
and clothing add another $12,850 to yearly outflows. Yet
it is housing that forms the bulk of expenses for young
families: the maintenance costs for a newly purchased home
in Metro Vancouver average almost $44,500 per year.

With the real estate market continuing its rapid rise,

millennial families in Vancouver face an impossible choice.
Do they purchase a home that will annually cost them, on
average, $11,000 more than the next most expensive city,
Toronto? Or will they choose to find a home in a more
realistic market such as Ottawa where a mortgage would
cost half as much? Until there is a broad cultural shift away
from home ownership or more long-term stability in the
rental market, this seems to be the only choice if a family is
going to pursue an acceptable level of well-being.

Taken together, assuming that a key aspect of long-term

well-being is housing security in the form of owned property,
the average millennial household would be going into debt by
almost $3,000 per year. This would leave no income to spend,
save or give away those key components of well-being.

It should be recalled that the expenses included in this

analysis are ones that are understood to be those basic to
life. Yet for a young couple or family there are typically many
additional expenses, such as student debt, extended health
care and car payments or maintenance among them. Any
of these outflows could put a young family into a pattern
of debt that would be difficult to escape. No wonder many
young people still remain reliant on their parents to make
major life advances in higher education or to buy a house.

A primary reason for the lack of discretionary income is that

young people in Canadas two largest cities, Vancouver and
Toronto, actually have lower average incomes than other
areas in the country. Average household incomes in the age

Table 2: Discretionary income for average millennial couple (ages 25-34) who purchased property at an average cost in 2016.4
Disposable income

Total expenses
except housing

Housing (avg prop)

Discretionary income

Edmonton

$83,515

$15,505

$20,654

$47,356

Calgary

$81,536

$15,505

$24,098

$41,933

Ottawa

$70,041

$14,045

$21,494

$34,502

Halifax

$61,779

$12,555

$15,337

$33,887

Kitchener-Waterloo

$63,388

$14,045

$20,230

$29,113

Montreal

$54,491

$11,957

$15,619

$26,915

Winnipeg

$55,362

$13,060

$16,372

$25,930

Victoria

$61,149

$12,851

$36,098

$12,200

Toronto

$50,829

$14,045

$33,405

$3,379

Vancouver

$54,460

$12,851

$44,354

-$2,745

City

Notes:
Income data from Satscan CANSIM 111-0012, 2015 estimate by Vancity
Expenditure data from Survey of Household Spending 2014, 2015 estimate by Vancity
Housing data from Real Estate Board of respective city/region, March 2016, Annual mortgage estimated by Vancity
All figures average, except where noted

The new reality: shared walls and

smaller footprints

While just over $1,350 in discretionary income per month is

not an abundance, it is enough to be able to spend a bit and
save a bit to build a little happiness now and security for the
future. However, it should be noted that these figures do not
include condo fees, which can get close to $500 per month.
The discretionary income is dramatically less for those who
purchase an average three-bedroom condo in Vancouver (a
more suitable size for a growing family). In this instance an
average millennial couple would be in debt by more than
$15,017 annually (see chart in methodology).

For the next generation, the urban reality is changing. The

figures above show that the average property in Vancouver,
and even Toronto, are simply out of reach for the average
young family. Even if this generation has not fully given up
on property ownership, the possibility has been pushed
off by decades. Now is the era of multiple-unit housing for
young families.

In a similar vein, the townhouse market is more friendly

for millennials to focus on, the average of which will yield
a mortgage payment of around $32,000 per year. This is
due to a benchmark price of $589,000 in March 2016, in
comparison to $815,000 for all properties. Townhomes
offer more floor space than the typical condo something
that would be attractive for couples who may be looking

As is seen in Table 3, millennial couples are vastly better off

if they limit their options to condominium-type dwellings.
With a disposable income of almost $54,500, the $25,000
worth of mortgage payments per year is much more
achievable. This will leave an average of $16,422 in disposable
income for this couple slightly higher than Toronto, but
still not much closer to other areas in the country.

Table 3: Discretionary income for average millennial couple (aged 25-34) who purchased a condo at an average cost in 2016.
Disposable
income

Expenses except
housing

Housing (condo)

Discretionary
income

Edmonton

$83,515

$15,505

$13,665

$54,345

Calgary

$81,536

$15,505

$15,309

$50,722

Ottawa

$70,041

$14,045

$14,080

$41,916

Kitchener-Waterloo

$63,388

$14,045

$11,489

$37,854

Halifax

$61,779

$12,555

$15,622

$33,602

Victoria

$61,149

$12,851

$17,469

$30,829

Montreal

$54,491

$11,957

$12,604

$29,930

Vancouver

$54,460

$12,851

$25,186

$16,422

Toronto

$50,829

$14,045

$21,187

$15,597

City

Notes:
Housing data from Real Estate Board of respective city/region, March 2016, Annual mortgage estimated by Vancity
The WinnipegREALTORS Association does not report on benchmark condo prices.

Table 4: Discretionary income for average millennial couple (aged 25-34) who purchased a townhouse at an average cost in 2016.
Disposable
income

Expenses except
housing

Housing
(townhouse)

Discretionary
income

Edmonton

$83,515

$15,505

$18,394

$49,616

Calgary

$81,536

$15,505

$18,313

$47,718

Kitchener-Waterloo

$63,388

$14,045

$15,468

$33,875

$61,149

$12,851

$26,277

$22,021

Vancouver

$54,460

$12,851

$32,060

$9,549

Toronto

$50,829

$14,045

$28,863

$7,921

City

Victoria

Notes:
Housing data from Real Estate Board of respective city/region, March 2016, Annual mortgage estimated by Vancity.
Real Estate organizations for Ottawa, Halifax, Winnipeg and Montreal do not report on benchmark townhouse prices.

Table 5: Discretionary income for average millennial couple (aged 25-34) who rent a one-bedroom condo outside the city
centre at an average cost in 2016.
Disposable
income

Expenses except
housing

Housing (rental)
1-bedroom

Discretionary
income

Edmonton

$83,515

$15,505

$11,717

$56,293

Calgary

$81,536

$15,505

$12,710

$53,321

Ottawa

$70,041

$14,045

$10,834

$45,162

Kitchener-Waterloo

$63,388

$14,045

$9,413

$39,930

Halifax

$61,779

$12,555

$9,675

$39,549

Victoria

$61,149

$12,851

$11,014

$37,284

Montreal

$54,491

$11,957

$7,788

$34,746

Winnipeg

$55,362

$13,060

$10,124

$32,178

Vancouver

$54,460

$12,851

$13,668

$27,940

Toronto

$50,829

$14,045

$13,552

$23,233

City

Notes:
Housing data from Real Estate Board of respective city/region, March 2016, Annual mortgage estimated by Vancity
The WinnipegREALTORS Association does not report on benchmark condo prices.

to grow their family. The tradeoff is that this couple will

see their extra income go down by over 42%, with only
$9,550 to spend, save or give away each year (Table 4). This
translates into a monthly budget of $795 which, while not
much to play with after basic expenses, could be achievable.
Similarly, renting a condo may be a good option in order
to have something leftover to put toward well-being. As
Table 5 indicates, millennial couples who chose to rent a
one-bedroom condo outside of the city centre will have a
discretionary income of $ 27,940 annually.

reality of a young millennial family in Vancouver becomes

all too apparent. The couple that has bought into the
property market at the average Vancouver price with one
child in care full-time now finds themselves going into
debt by more than $17,000 per year just to cover their basic
obligations and expenses (Table 6). The discretionary income
is dramatically less for those who purchase an average threebedroom condo in Vancouver (a more suitable size for a
growing family). In this instance an average millennial couple
would be in debt by more than $15,017 annually (see chart in
methodology). A similar situation presents itself in Toronto,
in contrast to the remainder of the country. All other urban
centres analyzed maintain a healthy level of discretionary
income, even after paying for childcare. In places such as
Montreal, Halifax and Edmonton choosing to start a family
does not necessarily conflict with the financial and stability
benefits of owning a home.

Adding children: borrowing from

the future
While the typical financial situation may be stable in the
aforementioned condo or townhouse for a while, things
dramatically change when children enter the mix. As this model
has been built on the assumption of a dual-income household,
it is likely that both parents will have to continue working after
parental leave. Excluding creative yet common solutions, this
means that the child will enter some sort of daycare.

Pressing on, these young families in Vancouver may choose

to sacrifice the size of their home for the benefit of
staying in the city that they love a viable option growing
in popularity. Some families may even be able to raise
five children in a two-bedroom condo.6 Although not for
everyone, this tactic generates a tight, but viable, financial
situation. Living in a condo with a young child in daycare is
possible with little money left over for spending on wellbeing: somewhere around $150 per month (Table 8). Yet a
townhouse is now out of reach. This would create a lifestyle
that could mean going into debt by $5,000 per year or more
(Table 7). Very clearly the financial reality in Vancouver is not
friendly to young families wanting to make a start.

Although Statistics Canada publishes average expenditure on

childcare, this figure is not particularly helpful in that it includes
all the families that do not use this service. Therefore, the
best way to access childcare expenses is to analyze median
expenses for only the families that send their children into care.
A 2014 report by the Canadian Centre for Policy Alternatives
gives us the most recent Canada-wide data.5
When childcare expenses are added into the mix, the grave

Table 6: Discretionary income for average millennial couple (aged 25-34) with one child in full-time care who purchased a
property at an average cost in 2016.
City

Discretionary income

Childcare*

Discretionary income with childcare

Edmonton

$47,356

$10,140

$37,216

Calgary

$41,933

$11,232

$30,701

Montreal

$26,915

$1,824

$25,091

Halifax

$33,887

$9,900

$23,987

Ottawa

$34,502

$11,880

$22,622

Winnipeg

$25,930

$5,412

$20,518

$29,113

$10,680

$18,433

Victoria

$12,200

$14,580

-$2,380

Toronto

$3,379

$15,888

-$12,509

-$2,745

$14,580

-$17,325

Kitchener-Waterloo

Vancouver

Source: Canadian Centre for Policy Alternatives, Parent Trap, November 2014
Note: Childcare figures represent the median cost of having one toddler-aged child in care full-time.

Table 7: Discretionary income for average millennial couple (aged 25-34) with one child in full-time care who purchased a
townhouse at an average cost in 2016.
City

Discretionary income (townhouse)

Childcare*

Discretionary income with childcare

Edmonton

$49,616

$10,140

$39,476

Calgary

$47,718

$11,232

$36,486

Kitchener-Waterloo

$33,875

$10,680

$23,195

Victoria

$22,021

$14,580

$7,441

Vancouver

$9,549

$14,580

-$5,031

$7,921

$15,888

-$7,966

Toronto

Source: Canadian Centre for Policy Alternatives, Parent Trap, November 2014
* Note: Real Estate organizations for Ottawa, Halifax, Winnipeg and Montreal do not report on benchmark townhouse prices.

Table 8: Discretionary income for average millennial couple (aged 25-34) with one child in full-time care who purchased a
condo at an average cost in 2016.
City

Discretionary income (condo)

Childcare*

Edmonton

$54,345

$10,140

$44,205

Calgary

$50,722

$11,232

$39,490

Ottawa

$41,916

$11,880

$30,036

Montreal

$29,930

$1,824

$28,106

Kitchener-Waterloo

$37,854

$10,680

$27,174

Halifax

$33,602

$9,900

$23,702

Victoria

$30,830

$14,580

$16,250

Vancouver

$16,422

$14,580

$1,842

Toronto

$15,597

$15,888

-$291

Source: Canadian Centre for Policy Alternatives, Parent Trap, November 2014
* Note: The WinnipegREALTORS Association does not report on benchmark condo prices.

Discretionary income with childcare

Table 9: Discretionary income for couples in Vancouver who purchased a 3-bedroom condo at an average cost in 2015.

City

Vancouver

Disposable
income

Expenses except
housing

Average cost for

3 bedroom condo

Discretionary
income

Childcare cost

Discretionary
income with
childcare

$54,459

$12,851

$56,625

$-15,017

$14,580

$-29,597

Average three bedroom condo in Vancouver prices are based on city of Vancouver, valid 3 bedroom condo sales (Improved Single Property Cash Transactions) 2015.
Courtesy of Landcor Data Corporation.

Space for life: the (only) rental option

their current housing arrangements: a figure that is likely

to go up if millennial households need to choose between
appropriate housing and discretionary income.10

With the real estate market so tight, it bears consideration

that millennial families may be forgoing the option
altogether and continuing to rent. In Vancouver the rental
market is generally lower and more affordable. Indeed, the
average rent for a three-bedroom unit outside of the citycentre is reported to be around $2,188 still the highest in
the country, but much more manageable than a mortgage
payment of $3,696. It is these types of units that would be
most desirable to a young family, as they provide the space
required for life and growth.

Renting may be slightly more affordable, but is also unstable.

Families who rent may be given notice at any time that they
must find another home. In addition to the challenge of
finding a suitable home are the challenges that families with
a pet or a child in school would face. Many families would
also have to deal with the social challenges of moving to
a new neighbourhood, especially if a child has to switch
schools. And this doesnt take into account the desperately
low vacancy rate in Metro Vancouver.

As is shown in Table 10, this monthly rent still results in

a difficult situation for the average family. When renting
a three-bedroom unit, families in both Toronto and
Vancouver are within range of having zero disposable
income after childcare expenses (Table 11). This makes
renting not much better than purchasing a condo, except
for the fact that the couple would likely be renting more
space than they could afford to buy. If smaller units would
cost less in rent each month (a one bedroom outside of the
city centre is around $1,132),9 then the family may choose
to stay in a smaller unit as their family grows. However, the
British Columbia Non-Profit Housing Association reports
that around 16% of Vancouver families are overcrowded in

Families looking for a unit to rent face an overall vacancy

rate in Metro Vancouver that is under 1%.
When rental figures are analyzed, the choice for young
millennial families in Vancouver becomes clear: they can be
under-funded or under-housed. Appropriate housing will cost
them dearly in their bank account: to purchase a townhouse
or rent a three-bedroom unit would mean almost no extra
income to spend, save or give away. As a result, their well-being
budget is either zero or in the negative. On the other hand, to
maintain some income for increasing happiness now and in the
future, the family would have to choose to be under-housed,
either in a small condo or small rental apartment.

Table 10: Monthly rent by city in 2016

1-bedroom
in city centre

1-bedroom
not in city centre

Vancouver

$1,561

$1,139

$3,100

$2,170

Toronto

$1,502

$1,129

$2,630

$1,795

Calgary

$1,347

$1,059

$2,305

$1,683

Kitchener-Waterloo

$1,018

$784

$1,907

$1,606

Victoria

$1,123

$918

$1,956

$1,603

Edmonton

$1,200

$976

$1,809

$1,491

Ottawa

$1,158

$903

$1,891

$1,438

Winnipeg

$927

$844

$1,573

$1,417

$1,033

$806

$1,913

$1,307

$939

$649

$1,778

$1,108

City

Halifax
Montreal
Source: Numbeo.com

3-bedroom
in city centre

3-bedroom
not in city centre

Table 11: Discretionary income for average millennial couple (aged 25-34) with one child in full-time care who rent a
three-bedroom condo outside the city centre at an average cost in 2016.
Discretionary
income
with childcare

Disposable
income

Total expenses
except housing

Housing (rental)

Childcare

Edmonton

$83,515

$15,505

$17,988

$10,140

$39,882

Calgary

$81,536

$15,505

$20,302

$11,232

$34,497

Montreal

$57,491

$11,957

$13,360

$1,824

$27,351

Ottawa

$70,041

$14,045

$17,198

$11,880

$26,918

Halifax

$61,779

$12,555

$15,440

$9,900

$23,884

Winnipeg

$55,362

$13,060

$17,127

$5,412

$19,763

Kitchener-Waterloo

$63,388

$14,045

$18,943

$10,680

$19,720

$61,149

$12,851

$19,240

$14,580

$14,478

Vancouver

$54,460

$12,851

$26,257

$14,580

$771

Toronto

$50,829

$14,045

$21,478

$15,888

-$581

City

Victoria

Recommendations

Inclusionary zoning: Use inclusionary zoning to increase

the availability of family-friendly housing in Vancouver
and Victoria. Zoning bylaws should stipulate developers
must include permanently affordable, three-bedroom or
more housing in multi-housing developments, and allow
them to work creatively with community partners to
achieve this goal.

The conclusion of this deep dive into the financial realities

of young families across the country is that Canadas
two main urban centres Toronto and Vancouver are
particularly difficult cities in which to raise a family and have
money left over to nurture and improve well-being. In these
cities, basic expenses eat up the majority of income. And in
Vancouver, this can be directly correlated to skyrocketing
prices for stable, appropriate and affordable housing.

Density bonuses: Municipalities could create density

bonuses for family-friendly, affordable housing like
apartments, townhomes, equity and shared-equity
co-operatives, and consider one-time or temporary
reduced fees and property taxes.

It does not need to be this way. Below are recommendations

on immediate and practical actions that governments,
financial institutions and individuals can implement to make
life more affordable for our young families and develop a
higher level of well-being for our urban communities.

Partnerships to support shared-equity co-ops:

Municipalities could enable third-party agencies to
administer affordable housing programs that promote the
shared-equity co-op model, as well as other affordable
home-ownership strategies.

Government
Owned housing: As noted in Vancitys previous report
Housetrapped, various levels of government have the
ability to address chronic housing and affordability issues
and should pursue policy agendas that support reasonable
housing costs. These are reproduced below:

Programs to support home ownership: The federal

government could create programs and incentives that help
families save towards a down payment. One example is
the U.S. Department of Housing and Urban Developments
Family Self-Sufficiency program for low-income families.
Under the program, if a familys rent increases because they
are earning more income, the rent increase is credited to an
interest-bearing escrow account, resulting in savings they
could use for a down payment.

New housing development tax credits: The federal

government could implement a program of new housing
development tax credits for permanently affordable
family housing. This program should increase rental and
owned homes (including co-ops) with three bedrooms or
more by providing developers with multi-year tax credits
when they invest in housing that provides long-term
affordable housing.

CMHC coverage: Currently, people seeking financing

for a purchase of a co-op unit are required to provide a
35% down payment. Part of a renewal of equity co-op
legislation should include CMHC coverage, so families
who choose co-ops can also get a mortgage with a
smaller down payment.

 Repurpose public and community-owned land:

There is significant inventory of urban land owned by
public agencies and community-based organizations
(e.g., churches, service clubs, etc.). This land should be
inventoried and financially assessed to provide an overall
value for potential housing sites with family friendly,
three or more bedroom homes to provide additional
affordable housing options. These redevelopment
opportunities could go beyond adding homes by
providing renewal opportunities for the communities
where these lands are located.

Align housing policy: Economic development,

transportation, health care, immigration, refugee services,
aboriginal affairs and other areas of social policy are all
intimately linked to housing. The coalition is encouraged
that federal ministers have been mandated to work
collaboratively across these portfolios and seeks further
collaboration moving forward.

Financial Institutions
Leverage private capital in developing affordable housing.
Financial institutions can work with government and third
sector agencies to pioneer new financial tools, such as
targeted investment funds and community bonds.
Using private capital:

Rental housing: The B.C. Rental Housing Coalition (of which

Vancity is a member) has put forward the following calls to
action by the government:

Investment can be funneled to underinvested

neighborhoods and/or affordable housing
developments.

Create new supply: B.C. needs 80,000 units of new rental

housing by 2021, of which 25,000 should be subsidized
housing for households that cannot afford market rents.[1]
The coalition is calling on Ottawa to:

Socially conscious investors can be matched with

opportunities that yield economic returns alongside
measurable impact for communities. These social
equity investors are commonly individuals who invest
in a project for reasonable financial return on their
investment, but who are also willing and able to
provide repayment terms that are favourable to the
projects because they are equally motivated by cultural
and/or social returns.

a. Meet its platform commitment to provide GST rebates

on new rental development and investigate other tax
incentives to stimulate the development of private
rental housing.
b. Target new housing infrastructure funding by need,
rather than population. This means that communities
in B.C. experiencing significant homelessness and
critical levels of overspending on housing should be
prioritized for new developments.

Support social finance for affordable housing

developments. Support social finance for affordable
housing developments. Lending or creating innovative
financing for nonprofits and charities to address a gap in
access to patient, working capital for affordable housing
projects. This may include:

c. Require the B.C. government to match contributions

for all new federal housing infrastructure funding with
cash, land or in-kind support in order to maximize
impact.

Building investment funds with philanthropic or

community partners to deliver near-market returns
to investors and deploy funds to support non-profit
partners with equity that enables an affordable rental
housing project. At the same time, co-op and/or notfor-profit owners can build their equity stake, and the
project can buy out the invested funds.

d. Support the creation of a $250 million social finance

infrastructure fund that will leverage a regional
network of impact investment funds to provide
financing for housing development and other durable
social infrastructure.

Support tenants: Over the next decade more than

20,000 units of social housing will lose their subsidies in
B.C. This includes federal rent subsidies for 4,000 lowincome co-op households. The coalition is also calling on
the federal government to:

Creating community bonds. These are financial vehicles

for mission-aligned donors and supporters to invest
funds into a defined community project that can be
paid back with a modest financial return once the
project is operational. Program-related investments
(provided from the endowments of foundations
to registered charities, and applied to higher-risk,
mission-aligned opportunities like affordable housing
projects), that generate below-market rates of return on
investment, is another option.

a. Immediately work with the B.C. government to fund a

rent subsidy program for low-income co-op and nonprofit residents at risk of losing their homes.
b. Repair deteriorating rental housing units in B.C. to
prevent further loss of existing stock.
c. Increase investments in the Housing First approach to
end chronic homelessness.

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Methodology

Individuals and families

Home sharing: many Vancouver families have discovered
that one of the only affordable ways to own property in
the city is to share the monthly costs. This means that space
must be shared in creative ways. Consider purchasing a
home with a secondary suite and rent one of the units out.
Apply the rent to your mortgage and pay it down quickly.

Calculations in support of this report were undertaken

by Roslyn Kunin & Associates and sourced from publically
available data from Statistics Canada. The methodology
described herein applies to deriving the discretionary
income of the age 25-34 couple families in selected
Canadian census metropolitan areas (CMAs).

Co-ownership: this is one step further than home-sharing

in that the families that share the property also share
finances. This is beneficial in that it shares the risk and
responsibility of ownership. Two families could purchase
a home big enough for both of them, or a property that
could easily be split into two distinct units.

Income data was sourced from Statistics Canadas CANSIM

table 111-0012 (family characteristics, by family type, age
of older adult, and family income) and limited to couple
families where the age of older adult is in the 25-34 years
age group. To estimate 2015 figures from 2013 values, the
growth rate of primary household income by province
between 2013 and 2014 was applied, which was derived
from Statistics Canadas CANSIM table 384-0040 (current
accounts households, provincial and territorial, annual).
The 2014 to 2015 growth rate was assumed to be the same.

Co-operative housing: although housing co-ops are

relatively rare, they are usually priced comparatively lower
than a comparable strata unit. However, government
regulations currently stipulate that a 35% down-payment
is required to purchase an equity co-op.

Income tax deducted was calculated by applying an average

income tax rate to the amount of median family income.
Similarly, the amount of EI and pension contribution
deducted was calculated by applying the average rate of
such deductions to the amount of median family income.
Average income tax rates, along with average rate of
deduction of EI premiums and pension contribution, were
source from data available from table 384-0040.

Housing is for housing: if you are lucky enough to own

housing, remember that while property may be a good
investment, it is only one of many. Housing needs to be
utilized for its primary purpose providing a space to
live in rather than being used as a vehicle for wealth
generation at the expense of affordable community
dwellings. Consider speaking to your financial advisor
about investing in other wealth-generating areas or
discover ways in which your property investment can
have maximal impact on providing affordable housing
in your community.

The average cost of food, utilities, transportation and

clothing was sourced from the 2014 Survey of Household
Spending (SHS) by Statistics Canada. To estimate the values
of these expenditures in 2015, the annual rate of change
in the Consumer Price Index (CPI) for these cost items
between 2014 and 2015 was applied.

Advocacy: to develop more affordable housing,

governments need to have a supportive regulatory
and funding environment. This will only happen
if the public and civic organizations advocate for
this outcome.

For cost of housing, the value used represents the cost of

a mortgage for a home purchased in these CMAs valued
at the March 2016 benchmark price. This data was sourced
from each CMAs real estate organization:

Canadian Real Estate Association (for Halifax)

Calgary Real Estate Board
Realtors Association of Edmonton
Kitchener-Waterloo Association of Realtors
Greater Montreal Real Estate Board
Ottawa Real Estate Board
Toronto Real Estate Board
Real Estate Board of Greater Vancouver
Victoria Real Estate Board
Winnipeg Realtors

Estimated discretionary income is calculated subtracting the

sum of the cost of food, housing, utilities, transportation,
and clothing from household disposable income.

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Table 12: Expenses by city except housing

City

Food

Clothing

Public transport

Utilities

Total expenses

Edmonton

$6,469

$4,425

$1,552

$3,059

$15,505

Calgary

$6,469

$4,425

$1,552

$3,059

$15,505

Ottawa

$6,014

$3,905

$1,264

$2,862

$14,045

Kitchener-Waterloo

$6,014

$3,905

$1,264

$2,862

$14,045

Toronto

$6,014

$3,905

$1,264

$2,862

$14,045

Winnipeg

$6,440

$3,129

$1,075

$2,416

$13,060

Victoria

$5,997

$3,178

$1,659

$2,017

$12,851

Halifax

$5,904

$2,876

$886

$2,889

$12,555

Vancouver

$5,997

$3,178

$1,659

$2,017

$12,851

Montreal

$6,129

$3,071

$835

$1,922

$11,957

Notes:
Income data from Satscan CANSIM 111-0012, 2015 estimate by Vancity
Expenditure data from Survey of Household Spending 2014, 2015 estimate by Vancity
Housing data from Real Estate Board of respective city/region, March 2016, Annual mortgage estimated by Vancity
All figures average, except where noted

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References
1. Kahneman, Daniel and Angus Deaton. High income improves evaluation of life but not emotional well-being. Princeton University,
August 2010. www.princeton.edu/~deaton/downloads/deaton_kahneman_high_income_improves_evaluation_August2010.pdf
2. Pew Research Centre, Millennials in Adulthood, March 2014.
3. Lu, Chaohui, Grant Schellenberg, Feng Hou and John F. Helliwell. Hows Life in the City? Life Satisfaction Across Census Metropolitan Areas
and Economic Regions in Canada. Statistics Canada, 20 April 2015. www.statcan.gc.ca/pub/11-626-x/11-626-x2015046-eng.htm
4. All housing calculations assume a 5-year fixed-term rate of 4.74%.
5. Macdonald, David and Martha Friendly. The Parent Trap: Child Care Fees in Canadas Big Cities. Canadian Centre for Policy Alternatives,
November 2014. www.policyalternatives.ca/sites/default/files/uploads/publications/National%20Office/2014/11/Parent_Trap.pdf
6. Kerry Gold, Squeezed, and loving it: 5 kids, 2 adults in a 1,000-square-foot condo, The Globe and Mail, April 10, 2015.
7. CCPA reports only on Kitchener childcare costs.
8. CCPA did not report on childcare expenses for Victoria. Vancouver figures have been substituted due to geographic proximity.
9. Cost of Living in Vancouver. www.numbeo.com/cost-of-living/city_result.jsp?country=Canada&city=Vancouver, accessed April 22, 2016.
10. Overcrowding figures can be found at http://rentalhousingindex.ca, accessed April, 25, 2016.

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