Toronto recorded the highest rate of rent arrears in Canada last year, with nearly 11% of rental households reporting unpaid payments, according to Canada Mortgage and Housing Corporation (CMHC).

The federal housing agency released its Rental Market Survey (RMS) on Thursday, which looked at rent arrears for the first time, in addition to national vacancy rates and rent costs in 2020.

CMHC said while there were increases in arrears across the country due to COVID-19 last year, Toronto recorded the highest arrears rate, with 10.68% of units -- 34,858 -- in arrears and 0.92% of rent, which is approximately $55 million, in arrears.

Job losses felt in the service and hospitality sectors contributed to the region’s arrears rate, as these industries tend to pay lower wages and employ younger workers -- which are key characteristics of typical renter households.

"The pandemic disproportionately affected lower-paid workers in the hospitality and service sectors," said CMHC. "These numbers are reflective of a larger share of population in Toronto relative to the rest of Canada, with a greater concentration of workers in these industries.”

Among all provinces, Ontario posted the highest arrears rate in Canada, with 10.18% of apartment units and 0.81% of rent (approximately $87 million) in arrears as of October 2020.

Read: GTA Vacancy Rate Rose Over 3% in 2020, Reaching 14-Year High

Nationally, CMHC says 32.5% of apartment owners reported their arrears rate to have remained similar to 2019, 58.3% said it was higher, and almost 10% found it was lower.

Among Canada’s Census Metropolitan Areas (CMAs), 6.11% or 116,929 apartment units were in arrears out of a total of 1,912,290 units. This represented approximately $150 million in total rent in arrears or 0.59% of the total expected rent.

CMHC said that 0.59% or 6.11% units in arrears were primarily apartment units with lower rents.

The survey also revealed that vacancy rates for Canada’s three largest metropolitan areas, Toronto, Montréal and Vancouver, rose to 3.4%, 2.7% and 2.6, respectively, as these cities were faced with higher supply and lower demand amid the pandemic.

Here in Toronto, the vacancy rate increased due to the economic fallout brought on by COVID-19, which led to the average vacancy rate in the GTA reaching a 14-year high.

The data showed that affordability was also a challenge for tenants in 2020. Nationally, rental prices crept up last year, with the average two-bedroom rent across cities with more than 10,000 people rising 3.6% to reach $1,165.

The average two-bedroom apartment rent was highest in Vancouver, Toronto, Ottawa, and Victoria, where rents were $1,792, $1,653, and $1,517, respectively.

“The economic impact of the pandemic has significantly reduced rental demand. Lower international migration, fewer student renters, and weaker employment conditions led to weaker inflows of new renters," said Bob Dugan, CMHC’s chief economist.

"While vacancy rates increased in many centres, we continue to see a need for more rental supply to ensure access to affordable housing,” said Dugan.