The Cost of Living in Canada - Is it Expensive?

Average Cost of Living in Canada

While the living costs in Canada are different for everyone, the average cost of living according to the living index is estimated to be $1,440.90 per month for a single person and $5,189.90 for a family of 4. Monthly costs with rent are estimated to be $1,922 per month per person, and for a family of four, estimated monthly costs are $3,911. This is the bare minimum needed to live. Due to this, the average salary needed for a single person is around $45,000 annually. 

How Much Do You Need to Live Comfortably in Canada?

There’s a difference between having enough money to live and having enough to live comfortably. In Canada, on average, these amounts will allow you to live comfortably. 

Cost of Living for a Couple

In order for a couple to live comfortably, it is recommended to have around $3,500 per month or around $50,000 per year. This can vary a lot depending on whether the couple is a one-income or two-income household and the size of the apartment/house you choose to live in.

Cost of Living for International Students

For an international student, the average monthly cost of living is between $600 and $800 per month for food and other expenses. Rent outside of campus can cost anywhere between $700 and $2,200 per month, and then there is tuition. While tuition is lower in Canada than in many other countries, the average year of an undergraduate degree costs around $28,000 per year. Not to mention the cost of books, which can range anywhere from $100-$500 per semester and dorms can cost anywhere from $550 to upwards of $2900. 

There is also the cost of a vehicle or public transportation and health insurance. While public transportation (public transit) costs range between $80 and $110, vehicle costs are much higher, and private health insurance can cost anywhere between $600 and $1000. There are restrictions on how long you have been in Canada and whether you are a permanent resident in order to qualify for Universal health care. Due to many of these costs, international students are allowed to work as much as 20-40 hours/week.

Cost of Rent by Province in Canada

One of the biggest factors that contribute to the cost of living is rent/housing. The average price on a monthly basis for a rental in Canada is $2730 but this all depends on the size of the rental and the location. Here’s a look at the average per province. 

While living in a major city is going to cost more in rent than in rural areas, it’s also important to keep in mind that transportation costs will likely be lower in large cities due to more accessible transit options.

What's the Average Cost to Purchase a House in Canada?

While the rental prices per province correlate to the housing prices per province, how much does it really cost to purchase a house per province?

Which Province in Canada has the Highest Cost of Living?

In Canada, the province with the highest cost of living is Ontario. Not only does it have some of the highest housing and rental prices in Canada, but estimated monthly costs for home insurance in Ontario are also around $215 per month, and car insurance averages $155 per month. The cost of utilities and food doesn’t vary too much across Canada. If we exclude the cost of rent/mortgage payments per month, it is around $2,244.46 per month to live in Ontario. Because rent can be upwards of $1200 or more, it is possible you could need over $3500 per month just for one person.

Which Province in Canada has the Lowest Cost of Living?

The province with the lowest cost of living is New Brunswick. While the housing costs in New Brunswick are significantly lower than in the rest of Canada, so is everything else. Home insurance averages around $60 per month and car insurance is only around $72.25 per month. The average cost to live in New Brunswick, minus the cost of housing, is $1,415.65 per month. 

Cheapest Province to Live In

The cheapest province to live in is Newfoundland and Labrador. The food prices here are really the same as the rest of Canada but the cost of rent and taxes is much lower. For many Canadians, there’s also plenty of job opportunities so it’s no surprise that we are seeing the population over there slowly increase.

Cost of Living in Major Canadian Cities

While, on average, B.C. has the highest rent cost in Canada, what about if you live in the city center of one of Canada’s largest cities? Do they reflect on the provincial averages? Let’s take a look.

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The Average Canadian Salary vs. Cost of Living

Where you live in Canada can also affect the average annual salary. Overall, the average annual salary in Canada is $59,822. This average has slowly increased over the years, allowing Canadians to keep up with the cost of living. 

Cost of Food in Canada

Another factor that affects the cost of living in Canada is the cost of food. Some Canadian provinces like B.C. and Ontario tend to have much higher grocery costs than the rest of Canada, it ultimately depends where in those provinces you live in. The rural areas are even more costly than the city. In Canada, while there are plenty of groceries available, a lot of people tend to eat out.d a lot since the rise of grocery prices.

Income Needed to Meet the Current Cost of Living

Before prices in Canada jumped drastically, it was reasonable for a single person to make around $45,000 per year and make ends meet. Now, in order to do so, you should be making an average of $70,000 - $75,000 per year. For many people, this is extremely difficult. For a couple, $80,000 is the yearly income needed to reasonably make ends meet. For a family of 4, it’s even higher at $85,000 or higher. Having more than one can make it a bit easier to meet this yearly income, but not always, especially with the Current cost of food.

Cost of Living for a Couple in Toronto

If you’re a couple living in Toronto, the cost of living will be much higher than the rest of the province. This is because Toronto is one of the most expensive cities in the county to live in. The average cost of rent for a one-bedroom is around $2,000 per month, and then it only goes up from there. This can make affording the city difficult. That said, there are plenty of towns just outside of Toronto that are cheaper to live in if you are looking outside of the city.

Is Living in Canada Expensive?

While Canada is not the cheapest country to live in it is also not the most expensive. Things like free health care make it a lot cheaper than other countries but , the difference is that we tend to have higher taxes. These taxes help to keep Canada one of the most sustainable economies. However, some things like car insurance are much more expensive in Canada than in other countries. 

Food prices and fuel prices in Canada are higher than in places like the US and the UK. Even though these costs are higher in Canada than in a lot of other countries, Universal Healthcare, a higher-than-average median wage, and the housing market do make Canada less expensive than other countries. Out of 252 different countries, Canada is ranked as the 24th most expensive country in the world to live in.

Canadian Taxes

While Canada does have some higher taxes than most other countries, there are reasons for this. As mentioned above, it helps keep Canada’s economy stable and allows for things that distinguish us from countries such as the US. An example would be universal health care. Unlike most countries, Canada does not charge tax on the first $12,298 of your income. The rest of your income is taxed by which province you are in and the amount of income you bring in. It can range anywhere from 4%-13%. In Canada, there are also 3 types of sales taxes. 

PST GST and HST. PST, or Provincial Sales Tax, is only charged in some provinces. In BC and Manitoba, it is 7%, Saskatchewan is 6%, and Quebec is 9.975%. Goods and Services Tax or Federal GST is 5% and is not charged in New Brunswick, Newfoundland Labrador, Nova Scotia, Ontario, PEI, as well as the Yukon unlike other provinces. These Provinces charge the Harmonized Sales Tax, also known as HST, instead, which ranges from 13% to 15%. 

These 3 taxes are charged on most goods and services across Canada. These include things like property, vehicles, clothing, and other material things. Necessities like groceries and prescriptions are exempt from most of these taxes. In total, Canada does have higher taxes than other countries, such as the US. Tax revenue makes up 38.4% of the total GDP (Gross Domestic Product) while it is only 28.2% in the US.

Average monthly expenses for one person in Canada

While we have gone over rent, purchasing a home, and some of the food costs, what else makes up the total cost of living in Canada? Transportation, Utilities, Medical expenses, and debt payments also add to this and should be considered when budgeting your finances. 

• Transportation: This can vary from fuel, insurance, car payments, transit, taxis/Uber, and even vehicle maintenance. While many parts of Canada are very transit-friendly, there are many areas that have a lower cost of living that tend to be farther from amenities. These places have higher transportation costs since a reliable vehicle is needed.
• Utilities: Utilities are household expenses such as gas/propane, hydro, phone bill, internet, cable, and whatever other household bills are needed.
• Debt payments: Many Canadians have some form of debt like credit cards, student loans, lines of credit, car loans, and payday loans.
• Food: This is the average cost of groceries and take-out per person. For two people this could get up to $1200 and even higher for a family of 4.
• Medical: While there is free healthcare in Canada certain things like the dentist, chiropractor, physiotherapist, optometrist as well as glasses and contact lenses often are only partially covered by extended medical or not covered at all.

These are just a few of the main household expenses many Canadians have. Many people also put money into their savings to have access in case of any emergency expenses outside of their normal monthly expenses.

Average Canadian Debt by Household

While we do talk about debt and how much the national average payment is per month, how much does this really contribute to a Canadian’s overall cost of living? Well, the average person in Canada has around $20,739 in debt that isn’t mortgage debt. This does vary per person, but it does show the importance of the difference between earning a living wage in Canada and a wage that allows you to live comfortably.

Is it Cheaper to Live in Canada or the US?

When talking about whether it is cheaper to live in the US or Canada, it is a close call. The cost of living in each country really depends on whether you live in a city or in a small town. In a large city like New York or L.A., the prices for monthly rent and groceries are higher than in a large Canadian city like Toronto or Vancouver. It also depends on whether you rent or own. In larger American cities, rent is often much higher than that of purchasing a home. 

For example, Canada’s real estate market is currently hotter than the US’s, so average house prices are currently much higher in Canada. However, this does not factor in interest rates, so it is hard to tell if a Canadian or a US mortgage is more. Another large factor in determining which country is cheaper is the cost of medical care. While Canadians roughly pay $4000 per year in extended medical premiums, the American average is $7,392 (in Canadian dollars) per year. Canadians also have free healthcare, which significantly lowers the yearly medical premiums they pay. On average, Americans earn a higher living wage than Canadians, but Canadians have lower costs in education compared to the US. If you put all of the factors together, it is still cheaper to live in Canada than it is in the US.

Is it Cheaper to live in Canada or the UK?

Now that we know living in Canada is cheaper than in the U.S., is it cheaper than living in the UK? Well, in a ranking of the more expensive places in the world to live in, Canada ranks 24 while the UK ranks 33. While it is cheaper to purchase property in Canada than in the UK, it is harder to get purchasing power there than in Canada. While renting in the UK is technically cheaper than in Canada, if you add in consumer prices, then it is then generally 0.06% higher than in Canada. For this reason, Canadians often have more expendable income. Being that the general wages and household bills of those in Canada are similar to those in the UK, there isn’t a massive difference in cost, but it is there.81-8439, 24 hours a day.