Calculating Ontario's Living Wage Rates
A living wage is the hourly wage a worker needs to earn to cover basic expenses and participate in their community.
The Ontario Living Wage Network (OLWN) calculates living wage rates across Ontario and encourages employers to pay their workers at least the living wage. More than 600 employers in the province are certified living wage employers, having committed to this standard. Our goal is to raise wages in Ontario and address poverty through paid work.
The OLWN recognizes employers across the province that commit to paying all employees a living wage. In the 2025 employer survey, 94 per cent of respondents said that paying a living wage helps their business or organization live up to its values. Certified living wage employers go beyond the minimum wage to help ensure workers can cover expenses in the communities where they live and work. This commitment also supports local economies and helps build stronger communities.
At $ 27.60 per hour, the Greater Toronto Area (GTA) continues to have the highest living wage rate in Ontario. Affordability remains a significant challenge for many workers earning low wages in the region. The GTA living wage is $9.65 higher than Ontario ' s current minimum wage of $17. 95, illustrating the gap between the minimum wage and what workers need to meet their basic expenses.
Although the increases in Ontario’s living wage rates may be more modest than expected given the current economic climate, the Ontario Living Wage Network’s priority is to ensure that rates are calculated accurately and consistently, using an evidence-based methodology. It is also important to recognize that every living wage rate in the province remains above the current minimum wage of $17.95, with the gap ranging from $3.20 to $9.65 per hour.
THE LIVING WAGE REGIONS
The living wage regions are based on Statistics Canada’s concept of economic regions. These geographic units are designed to represent regional economies. The OLWN uses these groupings, along with the City of Hamilton and the census metropolitan areas of Toronto and Ottawa, to establish Ontario’s living wage regions.
An important consideration in defining the regions is whether people generally live and work within the same area. Commuting-pattern data from the 2016 Census was used to assess and validate the regional boundaries.
CALCULATING THE LIVING WAGE
Data is collected for the costs of a basket of goods and services for three types of households: two parents aged 35 and two children aged 7 and 3, a single parent with a child age 7, and a single adult.
The living wage rate is the before-tax income that each adult would need to earn to cover the expenses included in the basket for their family type. The calculation includes government transfers the family may receive (like the Canada Child Benefit, the Ontario CARE benefit) and the payroll and income taxes the adults may pay.
Basic Living Wage Formula Calculation
The wage is calculated for each of the three households, and a weighted average of these wages is taken based on the proportion of adults in Ontario in each type of family using data from the 2021 census.
Single adults: number of persons not in census families in Ontario aged 15-64 – 1,630,980 (33.8%)
Single parents: number of parents aged 15-64 in one-census-family one-parent households in Ontario 391,875 (8.1%)
Families of four: partners aged 15-64 in one-census family household with children without additional persons - 2,801,870 (58.1%)
THE COST OF LIVING IN ONTARIO
The annual expenses for all basket items required for the three household types is collected for all upper-tier and regional municipalities (counties, districts, regions) across the province.
Next, this municipal-level data is aggregated to the economic region level using population-weighted averages (e.g., Windsor, Essex, Chatham-Kent, and Lambton County are combined into the Southwest region). An additional 4% is added to this total level of expenses as a contingency measure.
Next, the level of earned income, taxes, and transfers that would provide each household with the amount of income needed to cover these expenses is found. To calculate the living wage, we then divide the earned income by 52 weeks in the year and 35 hours per week (and by 2 for families of four) to arrive at an hourly living wage.
The data used for these expenses come from various sources, outlined in the section below. All data are in 2026 dollars (adjustments are made using CPI values from Statistics Canada tables 18-10-0005-01 for years up to 2023 and table 18-10-0004-13 for 2023 when source costs were not in 2026 dollars).
FOOD
Statistics Canada Consumer Price Index, September 2026i reports that the cost of food has increased 1.7% year over year. This increase has been evident in the food costs included in the 2026 living wage calculations.
Food costs were sourced from the most recent Nutritious Food Basket (NFB) data collected by local Public Health Units across the province.
SHELTER
Rental estimates used in the living wage calculation are found through three different sources. The Canadian Mortgage and Housing Corporation (CMHC)iii continues to be ‘go-to’ source for rental data in the living wage calculations. The CMHC provides average rental costs in urban areas with a population of more than 10,000 people. When data from the CMHC is unavailable due to population size or lack of available data in community rental costs are sourced through inflation adjusted 2021 census data or from the Rural Housing Information System (RHIS)iv which is a tool provided by the Rural Ontario Institute (ROI)v.
The CMHC collects data that includes all rental units in a community that meet the requirements of their methodology. This means that both units rented for multiple years and those newly rented are included in the average cost of rent in a community. Rapidly increasing rental costs over the past ten years have created a growing gap between the data collected by CMHC and current market rental rates. However, the methodology used by the CMHC is consistent and reliable.
When CMHC data is not available, the Canadian Rental Housing Index viis used as a source for average rental costs. The average cost of rent for the 3rd Quintile is used in the calculation. These numbers are from the 2021 census and as such are offset using Consumer Price Index (CPI). vii
To better reflect shelter costs in the province we introduced data collected and published in in the RHIS. The RHIS is a tool meant to fill the gap in rural housing information. Data is collected monthly from Kijiji and Realtors.ca and the average cost per month for 1-, 2- and 3-bedroom rentals is listed. This data has been included where appropriate in some areas in each of the economic regions with the exception of Hamilton, Ottawa and the Greater Toronto Area to phase in the use of costs that are closer to asking rental rates. While the tool has great value in providing data for rural areas of the province, the average rental rates collected in 2026 vary greatly from the average rental rates from 2025. This may be due to fewer rentals available in rural areas. But has also caused some fluctuations in rental costs in this year’s living wage calculations. This data has been used sparingly in the 2026 living wage calculations.
To address the gap between costs reported by the CMHC and current market rental rates in the three census metropolitan areas of Hamilton, Ottawa, and the Greater Toronto Area we look to data provided by a custom report from Statistics Canada based on 2021 census data. For these regions, the rental costs were calculated as the average of the average rent reported by CMHC and the median rent for renters who had moved within the past year reported by Statistics Canada.
Reference Family Rental Requirements
It is assumed that our reference family of four with a boy and a girl will need a 3-bedroom apartment. Our single parent will need a 2-bedroom apartment, and the single adult a 1-bedroom apartment.
UTILITIES
Hydro costs for each community are found through the Ontario Energy Board bill calculator[x]. Tenant insurance costs are sourced through rates.ca.
CLOTHING AND FOOTWEAR
Annual costs for clothing and footwear are sourced through the Survey of Household Spending[xi]. The average spending on these items for those at the 3rd quintile of income are assumed to be constant across regions. These costs are adjusted using Consumer Price Index[xii] to find the costs for 2025.
Children’s clothing 0–14 represents the amount spent on children’s clothing per household (not per child). Census Data was used to estimate how much is spent per child rather than per household. In the average Ontario household there are 0.41 children. This was used to offset the costs provided by the SHS to ensure a more accurate cost for clothing and footwear for children.
TRANSPORTATION
In rural areas or areas with insufficient transit, it is assumed that an adult will need a car to get to and from work. In an urban area with a sufficient public transit system, the cost of one car and one adult transit pass is included for the reference family of four. For a single adult, the cost of one adult transit pass is used. A single parent will need a car to get to and from work and to pick up their child from school and activities. In communities that have both urban and rural areas, a weighted average between the rural and urban scenarios based on rural and urban populations is used. Consultation with local community groups helps to provide a local context to determine how availability and reliability of local transit systems.
The cost of a monthly transit pass for each urban community is sourced through local municipal websites. These prices were collected in June of 2026.
The cost of car ownership and operation is sourced through VRM Canada xiand Statistics Canadaxii data on average gas prices and car maintenance in Ontario. Car insurance costs are sourced through rates.ca.
In rural communities we assume 20,000 kilometers is driven per year, and 16,000 kilometers is driven per year in urban areas.
The 2026 annual cost of car ownership and operation is $7,482 in urban areas and $7,872 in rural areas. This is an annual increase from 2025 of just over $200. The increase is due to the higher cost of gas and the car itself.
ADULT EDUCATION
The living wage methodology includes the cost of one continuing education course per adult. The final course cost is an average of four courses from different disciplines, and their textbook fees from one college from each economic region. The costs of adult education for the reference family of four are doubled to account for both parents. On average, one course with textbooks costs $461.81. This cost has decreased over the past couple of years. While the cost of college courses remains similar to prior years, more options for online textbooks and required reading are being offered. Costs for online resources are less expensive than physical books.
MEDICAL EXPENSE, LIFE AND CRITICAL ILLNESS INSURANCE
The costs for non-OHIP medical insurance, life insurance and critical illness insurance are sourced through Green Shield. The non-OHIP medical insurance plan is used as a comprehensive coverage package that includes prescription drugs, dental care, vision care, and other health practitioner expenses such as registered massage therapy, acupuncture, and more.
COMMUNICATIONS
Cellphone costs are sourced locally for each community. Communication costs vary across the province based on the coverage area for cell service providers and the type of internet connections available. Often costs for communications are more expensive in rural areas. This is particularly true in northern communities.
The methodology assumes that each adult will need a cell phone. A phone plan that includes unlimited text and calls, and a minimum of 2GB cellular data was selected for each region.
CHILD CARE
Childcare costs were sourced locally from one childcare center in each upper-tier municipality across the province. While this is a major contributor to annual family expenses, these costs are offset by the government's childcare subsidy for some of the household types in some economic regions. In January of 2023, the Canada-Wide Early Learning and Child Care (CWELCC)xiii system reduced childcare fees for children 6 and under by 52.75%. By September 2025, fees were expected to drop to an average of $10 a day. However, the fees gathered for the 2026 living wage calculation are an average $21.05 per day. Care for the 7-year-old is not affected by the CWELCC program, meaning that single parent reference family continues to see an increase in childcare expenses. Costs for full day childcare for the 3-year-old and before and after care have remained similar since 2024. However, the costs for day camps have continued to increase.
Childcare costs incorporate the daily fees for full-time care for a preschooler (aged 3), and before and after school care for a school-aged child (aged 7) for 251 and 187 days of the year respectively. The daily cost of day camp for the school aged child for 50 days of the year was also included.
OTHER EXPENSES
Following the 2018 convention of the Statistics Canada Market Basket Measure (MBM), we calculate other expenses as 75.4% of the cost of food, clothing and footwear. The methodology used to find the cost of Other Expenses in MBM is based on a basket of goods. The cost of food used in this calculation is the amount provided in the Nutritious Food Basket. The cost of clothing and footwear used is that of the MBM estimate.
This amount is intended to cover toiletries and personal care, furniture, household supplies, laundry, school supplies and fees, bank fees, some reading materials, minimal recreation and entertainment, family outings (for example to museums and cultural events), birthday presents, a modest family vacation, internet expenses, and some sports and/or arts classes for the children. The participation aspect of the living wage calculation is mainly covered in this expense.
CONTINGENCY AMOUNT
An additional 4 per cent contingency amount, or two weeks of income is added to the family expenses for emergencies. This amount is meant to cover unexpected costs such as inability to work due to illness or repairing a vehicle.
GOVERNMENT TRANSFERS AND TAXES
There are several government transfers and taxes that impact workers receiving a living wage.
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Name |
Details |
Source(s) |
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Canadian Dental Care Plan
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This program fully covers dental costs for all people in families with under $70,000 in family net income, with reduced coverage for families with $70,000 - $89,999 in family net income |
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Canada Child Benefit |
This benefit provides up to $8,157 for each child under 6 years of age and up to $6,883 for each child 6-17 years of age, with benefits reduced above $38,237 and $82,847 of family net income. |
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Canada Groceries and Essentials Benefit |
This benefit replaced the GST credit in July 2026. It offsets the cost of groceries and essentials for low-income families:
It declines with family net income. |
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Canada Worker’s Benefit |
This benefit provides the following maximum benefits for working adults:
Benefits decline with family net income. The lower-earning spouse may exclude up to $16,714 of working income from the family net income used to reduce the benefit. |
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Ontario Child Benefit |
This benefit provides up to $1,760 per child and declines with family net income. |
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Ontario Energy and Property Tax Credit |
This credit offsets a portion of sales taxes on energy and property taxes for low-income families. |
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Northern Ontario Energy Credit |
This credit offsets a portion of energy costs for individuals living in Northern Ontario |
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Ontario Sales Tax Credit |
This credit offset sales taxes and pays up to $378 per person in a family, with benefits declining with family net income. |
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Ontario LIFT Credit |
This nonrefundable provincial tax credit provides up to $875 to low-income families and declines with family net income |
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Ontario CARE Credit |
This credit offsets a proportion of eligible childcare expenses, with the proportion declining with family net income |
ACKNOWLEDGMENTS
Thank you to the Local Living Wage Organizers who help review local community data.
Thank you to Ontario Dietitians in Public Health Food Insecurity Workgroup for facilitating the sharing of 2026 Ontario Nutritious Food Basket (ONFB) food cost data.
RESEARCH AND CALCULATIONS
Silas Xuereb
Robin Shaban at Deetken Insight
ABOUT THE AUTHOR
Anne Coleman is the Executive Director for the Ontario Living Wage Network. She has been with the OLWN since its inception in 2017, and prior to that with Living Wage Waterloo Region. Anne believes in reducing poverty through paid work and is dedicated to raising wages in Ontario.