While stubbornly high inflation and the high cost of living present challenges from coast to coast in Canada, a new study reveals that Quebec is the most affordable province to live in, while British Colombia is the least affordable.
Sourcing data from Statistics Canada, personal finance expert savvynewcanadians.com ranks relative affordability across the country. Taking estimates of household median after-tax income against estimates of monthly household expenses, they determined the estimated income-to-expense ratio for each province, ranking them from most affordable to least affordable.
As the most affordable province, Quebec has an estimated income-to-expense ratio of 1.5. Household median after-tax income is estimated at $89,400, with monthly expenses at about $59,770.
Prince Edward Island is the second most affordable province with an income-to-expense ratio of 1.41, followed by:
- New Brunswick with an income-to-expense ratio of 1.36
- Nova Scotia with an income-to-expense ratio of 1.36
- Ontario with an income-to-expense ratio of 1.34
- Newfoundland and Labrador with an income-to-expense ratio of 1.32
- Alberta with an income-to-expense ratio of 1.31
- Manitoba with an income-to-expense ratio of 1.28
- Saskatchewan with an income-to-expense ratio of 1.26
As the least affordable province, British Colombia has an estimated income-to-expense ratio of 1.23, with median after-tax income at about $97,800 against monthly expenses of approximately $79,591.
It’s the relationship between basic monthly expenses and average income that ultimately dictates affordability and the ability for a family to live comfortably. The income-to-expense ratio is a metric that creates an apples-to-apples comparison that brings into focus true affordability across different regions, where prices for goods and shelter, along with average incomes, differ.
As the author of this study emphasizes, gauging where household income might get the most bang for the buck can be particularly helpful for new Canadians, planning to immigrate or to re-locate to a different province to get established.
The study breaks down the factors that influence both costs and cost-savings in the provinces, including government subsidies and rebates, local employment figures, average housing prices, rental costs and expenditures such as childcare, gas, utilities, entertainment and more.
As the most affordable province, Quebec has sizeable government subsidies for childcare and university tuition. Their unemployment rate is lower than the rest of the country, and electricity costs are comparably lower, with in-province hydro production. However, on the downside, residents are subject to a high taxation rate.
While high housing prices are notorious for pushing the cost of living up, it is interesting to note that some of the provinces where housing prices are lower than average actually have a higher cost of living.
Saskatchewan, for example has an average housing price below $300,00 and low food costs with robust agriculture in the province, but is ranked the second least affordable province thanks to very high electricity costs.
Meanwhile, New Brunswick has a similar average housing price to Saskatchewan, but a number of government tax benefits and rebates make living there more affordable, relatively speaking, landing the province in the top three most affordable provinces in Canada.
Savvynewcanadians.com ranks Vancouver as the most expensive city in Canada, followed by Toronto, Victoria, Markham and Nanaimo, topping the list. The most affordable city is Regina, followed by Quebec City, Saskatoon, Winnipeg and Red Deer, according to the survey.
