Here's how much you need to earn to live with dignity in Montreal
In addition to the rise in housing and transport prices, foodstuffs have also seen a sharp rise.
In Montreal, the viable income amounts to $32,252 in 2023, which constitutes an increase of $2,675 compared to last year due to the growth in the cost of rents, the grocery basket and the price of transport, weighing more heavily on the wallet. This is what the Institute for Socioeconomic Research and Information (IRIS) determined in its 9th edition of the study on viable income in the province, allowing to calculate what a person needs to live with dignity outside of poverty.
For a family of two adults and two children in Montreal, the viable income is established at $71,161 per year. More generally, it would take between $27,047 and $37,822 for a single-person household to live out of poverty in 2023.
The base costs more
“The minimum wage is increasing, yes, income is increasing, yes, but so is housing, food and transport,” explains IRIS researcher Eve-Lyne Couturier. Inflation in all three facets has been higher than general inflation, so the increases have been harder to bear for low-income people. You can decide to go out to restaurants less often and travel less , but each person should be able to make this choice without being constrained by the expenses invested in the essentials.
The tax cut announced on March 21 when the 2023-2024 budget was tabled by the Minister of Finance, Eric Girard, also has a negative impact on low-income people. According to Ms. Couturier, the latter already pay less tax in normal times, which means that this measure does not benefit them, unlike people living well beyond the viable income.
“What we notice is that the fifth of the wealthiest in Quebec spends 40% of their income on housing, food and transportation. This is well below the poorest fifth who spend 60% of their income on these three items. It’s clear that this year’s tax cut is not for the poorest people since they already pay little or nothing and have to bear the cost of inflation in essential expenditure categories. p>
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More effective measures can already be put in place to enable people to live out of poverty. Beyond the increase in income, the researcher specifies that the Quebec government could play a more important role in stabilizing prices, recalling that it is not enough to look only at income, but at what a person can do with.
“Quebec can slow the increase in basic spending by establishing price restraints with government measures. By stabilizing prices, people will have more money to spend on different categories, such as traveling or eating out. Freeing up spending in this way will in turn boost tourism and catering as people will be less financially squeezed. The structural effects would be immediate and very interesting, and this for the whole of society.
IRIS also considers that the increase in the minimum wage to $15.25, announced on May 1, is insufficient for people to live out of poverty. The research established that a “single person living in Montreal and working full time at minimum wage barely manages to cover their basic needs and earns an income equivalent to only 78% of living income”. IRIS therefore offers a higher hourly rate.
“To ensure that “work” no longer rhymes with “poverty”, we need a minimum wage of at least $20 an hour. While the government is consulting for the next edition of the action plan required by the Act to combat poverty and social exclusion, the findings contained in the 2023 edition of the viable income indicate the paths to take towards a Quebec without poverty”, concludes Eve-Lyne Couturier.
Viable income is an amount available after tax which allows the population to live with dignity outside of poverty. It thus calculates a basket of goods and services giving access to a pleasant life beyond simple basic needs. IRIS has been working on this threshold since 2015.
