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Changing Patterns in Canadian Homeownership and Shelter Costs, 2006 Census: Comparing shelter costs to income

This section compares out-of-pocket shelter costs to a household's ability to meet those costs. The share of household income spent on shelter costs is known as the shelter-cost-to-income ratio (STIR) and a threshold of 30% for this ratio is accepted as the upper limit for defining affordable housing: in 1986, the Canada Mortgage and Housing Corporation (CMHC) and the provinces agreed to use the 30% threshold to measure affordability for the purposes of defining need for social housing. This agreement was reached during the development of the Federal/Provincial social housing programs.

Those who spend 30% or more of their household income may do so by choice, or they may be at risk of experiencing problems related to housing affordability as defined by CMHC. This report looks at the characteristics of those who spend 30% or more on shelter but has no information about whether they do so by choice. CMHC produces an indicator (core housing need) that classifies as being in housing need only those who could not afford suitable and adequate housing in their community.

The census collects data on income for the preceding calendar year. In the case of the 2006 Census, income data refer to 2005, even though housing and demographic information relates to the census year. Household income refers to the sum of the income of all household members aged 15 and over. It includes government transfers, but does not subtract the amount paid in income taxes. Shelter costs and income definitions are those stipulated for use in Canada Mortgage and Housing Corporation's calculation of core housing need.

This section focuses on households in private occupied dwellings, excluding farms and Indian reserves. Also excluded are households with negative or zero incomes. A small number of households report such incomes as a result of losses from investments or self-employment. Within the context of the shelter cost-to-income ratio, it is difficult to interpret information for these households.

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