How much does it cost to live in Canada in 2024?

Why is talking about salary versus rent so important in Canada?

Before we start bringing all the insights from the report, we must make a special mention of the topic of rent in Canada, the true protagonist of the crisis in the country’s current recession scenario. So, I will not bring crazy formulas to explain what you need to know right off the bat if you intend to immigrate to the cold northern lands in 2024.

Therefore, put the following rule at the top of your financial concerns: If your net income (salary after tax deduction) is not able to keep your housing cost below 30% of your income, the chances of you going broke and having to return home right in your first year in Canada will be very high.

Just as a reference, let’s take as an example the minimum wage in the province of Quebec, set at $15.25 CAD per hour for the year 2023.

Net minimum wage in Quebec in 2023 - Source: Talent.com

Note that out of these $2,478 CAD (monthly gross salary calculated based on 40 hours per week), only $1,872 CAD actually goes into your pocket after a tax deduction of around 25%. In this scenario, your rent expense should not exceed 30% of your net earnings, which “in theory” would represent a cost of up to $560 CAD per month.

Read also: “How to calculate your salary in Canada”

Not to discourage you reader, but this is a rent value that is already almost impossible to find for a simple student dorm in major urban centers in Canada.

Furthermore, you should be aware that with the remaining $1,315 CAD it will be necessary to do the magic of buying food, paying for transportation, and maintaining all your other basic expenses, another great challenge right now, even for someone who lives alone. Oh, and if I didn’t mention leisure in this account, it’s because it’s practically non-existent even in this hypothetical context.

Read also: “How to find cheaper rentals in Montreal”

I have written a lot about the cost of living in Canada on other blogs, but I speak very little about this topic on Você no Quebec since I created this blog just at the beginning of this year. In 2018, the year I arrived here, things were much easier to control and predict. I saw food prices in supermarkets remain the same for almost 3 years. It was like living a fairy tale when compared to my old life in Brazil.

With the arrival of the pandemic and new geopolitical scenarios forming from 2021, this fairy tale soon gave way to a squeeze on finances and much more caution when it came to money. Financial decisions like moving to a larger and more comfortable apartment were no longer as simple as before COVID.

However, the purpose of the text is not just to terrorize those who still dream of leaving Brazil in search of some kind of personal and professional fulfillment. In fact, this is often such a thorny topic for me that it frequently costs me the title of annoying and pessimistic in conversations I have with new immigrants, especially those who have just arrived in Canada somewhat unaware or misinformed by digital influencers who keep insisting on selling the Canadian Dream as something that can be within everyone’s reach.

So, please, stop believing in fairy tales that say you will be happy in Canada earning a minimum wage. That era has passed. I had been warning about this on other channels since December 2022. A few months after I recorded a video on TikTok about this topic, I saw dozens of YouTubers, Instagramers, and TikTokers do the same.

In this post, my empirical points of view will be left out, we will only deal with real data detailed in a study developed by senior economist David Macdonald and political economist Ricardo Tranjan. A report that incidentally caused so much buzz in Canada that it made headlines in the country’s major media outlets for weeks after its release in July of this year.

I really owed it to you to write about it, but you know how it is, nobody produces much here during the summer (including yours truly), but don’t worry, you will soon understand this as soon as you experience your first year here.

The original report can be accessed at this link: Can’t afford the rent: Rental wages in Canada 2022

Minimum wages fall far short of the income needed to cover housing expenses in Canada

The pressure of high interest rates and the lack of affordable housing has made life a real nightmare for tenants in Canada over the past 3 years. People living on minimum wage in almost every neighborhood in Canada are literally being priced out of the housing market due to the incompatibility of their income compared to the cost of rent, as a new report shows.

The report, titled “Can’t afford the rent: Rental wages in Canada 2022”, by the two economist authors uses as a reference an indicator called “Rental Wage”. Better explained, this indicator represents the hourly wage (for each province) required to pay rent while working full-time spending less than 30% of your income on housing. The report then compares this value with the minimum wage in each province. (Check the official government list at this link here)

Among the report’s highlights, we can see that in British Columbia, for example, the “rental wage” for a two-bedroom unit is more than double the minimum wage of $15.65 CAD per hour, which is the highest in the country. The gap between the minimum wage and the rental wage for a one-bedroom rental unit is almost $12 CAD.

Similarly, the gap between Ontario’s minimum wage of $15.50 CAD per hour and its one-bedroom rental wage is over $10 CAD. This gap increases to $14.40 CAD for a two-bedroom unit.

Source: Report Can’t afford the rent: Rental wages in Canada 2022

Note also that in the provinces of Vancouver and Toronto, even two full-time minimum wage earners would need to spend more than 30% of their combined income to pay for a one-bedroom unit.

In Vancouver, Toronto, Kelowna, Victoria, Ottawa, and Halifax, the wage required to afford rent for a two-bedroom unit is more than twice the provincial minimum wage in each city.

Canadian Centre for Policy Alternatives (CCPA)

Source: Report Can’t afford the rent: Rental wages in Canada 2022

Report authors David Macdonald and Ricardo Tranjan note that higher minimum wages in B.C. and Ontario don’t directly translate into better living conditions because “landlords capture a larger share of those wages through high rents,” given the predatory real estate speculation Canada has faced in recent years.

The authors also cite points such as:

“The discrepancy between the rental wage and the minimum wage is such that, in most Canadian cities, minimum-wage workers are highly unlikely to escape core housing need. They are likely spending too much on rent, living in units that are too small, or, in many cases, both.”

David Macdonald and Ricardo Tranjan

How much do I need to earn to live in Canada in 2024?

As mentioned earlier, the CCPA report concludes that the rental wage needed to live comfortably in every province in Canada is well above the minimum wage in those provinces.

And, according to it, the rental wage required to afford a one-bedroom apartment in Ontario would be $25.96 CAD per hour, rising to $29.90 CAD for a two-bedroom unit. However, the provincial minimum wage in 2022 (when the study was conducted) was $15.50 CAD, one of the highest in the country.

The results are similar in B.C. and Alberta, while Quebec and Newfoundland and Labrador have the smallest gaps between rent and minimum wages. The northern territories were not included in the analysis.

Read also: “Most in-demand jobs in Quebec for newcomers”

David Macdonald says that for single parents working minimum wage in some of Canada’s most expensive housing markets, the two-bedroom rental wage is far out of reach, leaving entire families constrained to one-bedroom units. Something I already used to warn single people in Brazil who reach out to me on social networks asking about the viability of making the Canada project possible solo.

Understand, I’m not saying coming alone is impossible, just keep in mind that your salary must be compatible with the reality of where you will live. Coming alone with the distorted idea that working at McDonalds is enough to pay the bills is a huge mistake nowadays.

Macdonald further mentions that families suffocated by unaffordable rent costs will put more of their income into these monthly payments and will try to cut back on other expenses or be forced to move out of the city to more affordable neighborhoods away from the downtown core - or entirely out of town.

Read also: “Challenges of settling in a smaller city in Canada”

A point for the province of Quebec (We just don’t know for how long)

Interestingly, the only cities where the one-bedroom rental wage was lower than the minimum wage were Sherbrooke, Trois-Rivieres, and Saguenay, Quebec.

“Even there, rent affordability is declining,” the study says. “All other cities in Canada have average rents that far exceed what workers earn on minimum wage.”

In Sherbrooke, for example, the report says the 2018 minimum wage exceeded the one-bedroom rental wage by 18%, compared to 9% in 2022.

For most cities, the number of minimum wage hours required to pay rent for a two-bedroom unit also increased between 2018 and 2022.

Source: Report Can’t afford the rent: Rental wages in Canada 2022

“In sum, a larger share of the working-class families’ earnings is now flowing from bosses to landlords, making the rich richer and leaving tenants poorer,” the report says.

Read also: “Best cities to live in the province of Quebec in 2023”

Is it still worth immigrating to Canada?

Well, I could write a short book trying to answer this question, but I believe that with this brief data I left in the text you are already capable of making some wiser decisions in your project.

Considering a hypothetical scenario where you and your partner came to Canada as skilled professionals and together had a net household income sufficient to cover housing, transportation, food, and leisure without so many excesses in the first two years, I would say yes, the Canada plan could be very close to working out.

Going with the old standard routine of selling everything in Brazil and using that money to sustain yourself in Canada until seeing what happens wasn’t very sensible when I arrived, let alone now, in these dark times of high inflation in which we live.

Keep in mind that you need to have at least 3 months of guaranteed expenses in the bank in case you become unemployed. Remember! You are far from home and as much as you can get help from relatives or friends, we are talking about a life that costs almost 4 times more than ours in Brazil.

Another thing, coming to Canada and working two or three jobs to pay the bills and live comfortably isn’t exactly what we can call quality of life, right? Don’t be surprised to see that a good portion of the low-income Canadian population is facing this right now. There’s no shortage of work, that’s a fact, but how far are you willing to go for a dream? We are not talking about a tropical country, with beautiful beaches, but a place that normally reaches temperatures below -10 degrees Celsius for at least 4 months of the year.

What are the chances of this scenario changing for the better in the coming years?

Unfortunately, this is an answer that not even the gurus of the Canadian economy have right now. The current government hasn’t shown much commitment and skill in dealing with the housing crisis, as well as the rising prices of goods and services.

Whether the policy of high interest rates in place to curb consumption will have any effect, I don’t know. What I do know is that when I arrived in 2018, a two-bedroom house cost around 250 thousand dollars and could be financed over 30 years at an interest rate of just over 1.5% per year. Today, that same property has more than doubled in value, and to buy it, you’ll face an interest rate level that is already over 7% per year.

You don’t need to be a financial market genius to understand that real estate prices rising exponentially over a short period of time can lead to a housing bubble. I believe many of you might remember what happened in 2008 in the US. Well, unfortunately, Canada isn’t too far from becoming the next “Bubble” if something isn’t done.

So, the math is quite simple to understand. If the price of the property goes up, along with the costs to finance and maintain it, someone has to pay that bill. Which in this case, falls on you, a tenant living in Canada.

Read also: “9 rules every tenant needs to know before renting a property in Montreal”

Final thoughts

Yeah, I know, I think I was hard on you today. The scenario I painted in the text was not the most optimistic, but look on the bright side. Maybe you’re not living such a bad life in Brazil right now.

The goal of my blog is to inform, warn, and raise awareness among aspiring immigrants that the Canadian dream is indeed tangible, as long as you do your homework the right way.

Nothing against living in Canada, I really like this country that welcomed me and gave me, and still continues to give me, many joys (apart from the winter, of course), but as I said, I arrived in different times. If I were to make this crossing today, maybe I would have some doubts about my project.

I won’t say I’ve lost all hope of seeing that promising Canada of 2019. I just think it won’t be in the short term, much less that we will return close to what we had before 2019. The country is very rich in resources, but it takes much more than that and the goodwill of the people to get back on track.

Well, that’s what I had to say today. Subscribe to the newsletter to receive weekly updates on how to prepare for this near madness we affectionately call immigration.

See you in the next post! 😉