EXPAT COST OF LIVING IN CANADA AND LIVING GUIDE 2021

What is the expat cost of living in Canada? That will be the topic of this article alongside discussing other aspects such as taxes.

Nothing written here should be considered formal tax, financial, legal or any other kind of advice advice, and is for entertainment purposes only.

Nevertheless, we hope the information is helpful for you, if you are planning to live in Canada.

For any questions, or if you are looking to invest as an expat, you can contact me using  this form, or use the WhatsApp function below.

The best time to review your situation is often when you are moving to a new country.

Introduction

When a person moves to Canada, or they are planning to move to Canada, there are some things that need to be checked. 

For instance, the person would have to get familiar with things such as banking, taxation, education, healthcare, salaries, crime rate, and most importantly, the cost of living.

Most of the details would mainly be concentrating on non-residents/expats as they are the specific group of people who need such information.

Money: 

Canada’s official currency is the Canadian Dollar, which is also represented as ‘CAD’ or ‘C$’, which is further divided into 100 cents.

Now, we will take a look at the available denominations of currency in Canada. In Canada, the notes are:

  • 5 CAD
  • 10 CAD
  • 20 CAD
  • 50 CAD
  • 100 CAD

The coins are:

  • 5 cents (nickel)
  • 10 cents (dime)
  • 25 cents (quarter)
  • 1 CAD (loonie)
  • 2 CAD (toonie)

Banking:

One of the main aspects that need to be taken care of, while moving over to another country is creating a bank account. Everyone needs a bank account, whether it is for making payments or storing funds.

Understanding the bank accounts is a major aspect for the people, who are moving to Canada, especially for employment purposes. 

How to open a bank account (expats) – These details are for the people who want to open a bank account in Canada as non-residents. To most people’s doubt, yes… a bank account can be opened by non-residents in Canada. 

Some banks might require individuals to physically visit their branches, while some might allow an individual to open an account online. 

Some of the necessary documents for opening a bank account in Canada are as follows:

  • Passport
  • An additional ID proof such as driver’s license or something else
  • Immigration papers
  • Social Insurance Number

The requirements might differ depending on the bank that has been chosen as some might require some additional documentation.

How to open a bank account online as an expat – As discussed, some branches might allow individuals to open bank accounts completely online. 

To most people’s misconception that some banks might be safe and secure, online banks in Canada work in an entirely different manner. The Canadian Deposit Insurance Corporation (CDIC) offers protection to all the deposits. 

When there are any problems regarding online banking, each individual account will be covered up to an amount of CAD 100,000. 

However, this protection is not available for other financial instruments such as bonds, stocks, mutual funds, and some others.

Opening a bank account online in Canada is an easier process than opening a bank account by approaching a bank.

The information on how to do this online and other instructions can be found on the website of the bank. Usually, the required documents are:

  • Passport
  • Immigration papers
  • Residence permit, study permit, or work permit

While opening a bank account online, it is highly recommended that you contact the bank and make sure about the things that are needed to be provided and other essential aspects.

We’ve created an article that covers the information related to the best banks in Canada, which you can be able to access by clicking here.

Taxation:

Another major financial aspect that needs to be overlooked when you move over to a specific country is taxation. Usually, each country has its own particular set of rules while taxing a person.

Types of taxes – Usually the types of taxes in Canada are income tax, property tax, business tax, sales tax, among other taxes. These taxes might be imposed on the federal level, provincial level, and municipal level.

The authority responsible for the taxation in Canada is called ‘Canada Revenue Agency’, which can also be referred to as the ‘CRA’.

Tax residency – People are considered as tax residents of Canada when meeting certain eligibility criteria. This will be determined on the date a person enters Canada.

In other words, a person would be considered a tax resident on the relationship of that person with Canada. When they will be having a continuous relation, then he or she will be subject to taxes.

First of all, the most important aspect that makes a person a tax resident in Canada is that whether they own a property in Canada, which is used for residing. This property includes a place whether the individual might be staying, or his family members might.

Other factors that make a person considered as a tax resident are business involvements, personal properties, driver’s license, registration of a vehicle, medical insurance policy, etc.

When a non-resident stays for a period of 183 days or more in Canada, then they will be deemed as a tax resident for that specific year.

Sometimes, people might be subject to taxation in their country of residence as well as in Canada. To avoid such situations and any other relevant conflicts, Canada has a double taxation treaty with some countries. 

Personal Income Tax rates – In the year 2021, the federal tax rates are as follows:

  • 15% for income up to CAD 49,020.
  • 20.5% for income between CAD 49,021 to CAD 98,040.
  • 26% for income between CAD 98,041 to CAD 151,978.
  • 29% for income between CAD 151,979 to CAD 216,511.
  • 33% for income more than CAD 216,511.

Provincial and Territorial tax rates – given below is a table, which will represent the provincial and territorial tax rates in 2021.

Province/TerritoryTax Rate (Lowest)Margin (Lowest)Tax Rate (Highest)Margin (Highest)
Newfoundland and Labrador8.7%Up to CAD 38,08118.3%More than CAD 190,363
Prince Edward Island9.8%Up to CAD 31,98416.7%More than CAD 63,969
Nova Scotia8.79%Up to  CAD 29,59021%More than CAD 150,000
New Brunswick9.68%Up to CAD 43,83520.3%More than CAD 162,383
Quebec (2020)15%Up to CAD 44,54525.75%More than CAD 108,390
Ontario5.05%Up to CAD 45,14213.16%More than CAD 220,000
Manitoba10.8%Up to  CAD 33,72317.4%More than CAD 72,885
Saskatchewan10.5%Up to CAD 45,67714.5%More than  CAD 130,506
Alberta10%Up to CAD 131,22015%More than CAD 314,928
British Columbia5.06%Up to CAD 42,18420.5%More than  CAD 222,420
Yukon6.4%Up to  CAD 49,02015%More than CAD 500,000
Northwest Territories5.9%Up to CAD 44,39614.05%More than CAD 144,362
Nunavut4%Up to CAD 46,74011.5%More than  CAD 151,978

On the income obtained from Canada, non-residents are subject to an additional 48% of the basic federal tax, instead of the provincial/territorial tax.

Provincial or Territorial taxes are imposed on a non-resident when he or she earn personal income or business income that has something to do with a province or a territory in Canada.

Alternative Minimum Tax – An Alternative Minimum Tax or AMT is the tax that has to be paid regardless of the deductions or credits that a person might claim. 

When the income of a person exceeds CAD 40,000, then that particular person would have to pay a combined federal and provincial/territorial tax of 25% on the excess amount.

Kiddie Tax – When a child obtains any sort of passive income with respect to an income splitting arrangement, then that child would be subject to a tax with a hefty rate of up to 54%, which is called Kiddie Tax.

Personal tax credits cannot be used to reduce this tax rate, while dividends, disability benefits, foreign tax credits, or other deductions might be used.

Social Security Contributions – As of the stats obtained in 2020, Canadian employees are required to contribute an amount up to CAD 2,898 for their pension plan, and CAD 856 towards their employment insurance premiums.

However, people from Quebec must contribute CAD 3,146 for the pension plan, CAD 650 for employment insurance premiums, and CAD 387.79 for Quebec parental insurance plan.

From January 2019, the Canadian government and Quebec government pension plan contributions have increased because of an enhancement that is phased in over 7 years.

Based on this, a portion of contributions is deductible, with a credit of around 15% of the less than the enhanced amount payable and the premiums for that specific year.

Self-employed individuals in Canada must contribute an amount that is twice that of the usual employees’ pension contribution. 

They can deduct half of the contributed amount and 100% of the enhanced amount. Additionally, the non-deductible amount can be used as a tax credit. 

Even though it is not mandatory for self-employed people, they could opt for paying employment insurance premiums if they wanted to. In Quebec, self-employed people must contribute an amount of around CAD 689.23 towards their Quebec parental insurance plan.

Federal GST (Goods and Service Tax) – The GST in Canada is a federal tax, which is levied at a rate of 5% on most goods and services based in Canada. 

It is a VAT (Value-Added Tax), which is applicable on each specific level of the manufacturing and marketing process.

Anyhow, this is not imposed on the supplies that have a 0% tax such as groceries, medical devices, assistive devices, prescription drugs, female hygiene products, products & services related to agriculture/fishing, and international transportation services (freight and passenger).

Harmonized Sales Tax (HST) – Five of the provinces in Canada impose an HST, which includes a 5% GST.

  • New Brunswick (15%)
  • Newfoundland and Labrador (15%)
  • Nova Scotia (15%)
  • Ontario (13%)
  • Prince Edward Island (15%)

Provincial Retail Sales Tax (PST) – A PST is applicable to the people in British Columbia (7%), Manitoba (7%), and Saskatchewan (6%).

Quebec Sales Tax (QST) – This a VAT just like the GST or HST, which, however, is charged in addition to the GST of 5%. The rate for QST is 9.95%, which is imposed on most services and properties made in Quebec.

Net Wealth/Net Worth Tax – No.

Inheritance Tax/Estate Tax/Gift Tax – There are no particular inheritance, estate, or gift taxes in Canada. Nonetheless, when a person gets rid of their property immediately before their death, it can result in a capital gains tax.

Capital Gains Tax – Around 50% of the income earned from capital gains in a year is subject to capital gains tax, which might be the amount that exceeds 50% of the capital losses in that year.

This can be imposed on the real estate, shares (for personal investment), and personal property, regardless of their use. 

Property Tax – The property tax is a specific tax, which is particularly imposed by the municipalities in Canada on the basis of the market value of the real estate property. 

This can be imposed by the provinces or territories on the land, which isn’t considered to be present in a municipality.

Additionally, there is a land transfer tax that is to be paid by the person who purchases a real estate property, for which the rates range between 0.02% to 5%.

Excise Tax – Excise duties in Canada are imposed on spirits, wine, beer, other forms of liquor, and tobacco products. However, this specific will be applicable during the packaging of a product instead of while purchasing it. 

This is also applicable in certain types of goods such as automobile air conditioners, fuel, gasoline, diesel, some types of insurance premiums, and fuel-inefficient automobiles.

Healthcare:

Thanks to the public-funded health care system, most of the healthcare services in Canada are free of cost for the people living in Canada. Under the Canadian Health Act, these healthcare services are administered at provincial and territorial levels.

Usually, the healthcare system in Canada is referred to as ‘Medicare’, which is available to everyone, regardless of their financial situation. 

There are educational programs conducted by the Canadian government, with the help of provincial and territorial governments, for which, the main objective is to bring awareness to the general public.

The Canadian Medicare also considers special treatments for people having special medical needs, especially for children, disabled, senior citizens, etc.

There might be a requirement for private health insurance for the Canadians who travel on a frequent basis, as the general health insurance doesn’t cover their medical needs.

However, certain things such as drugs, dental visits, eye examinations, hearing aids, rooms in private hospitals, cosmetic surgeries, and others are not covered by the Canadian Medicare system.

Education:

Canada is known to have the best education system when compared to most other countries of the world. There is an availability of a wide range of colleges that offer bachelor’s, master’s, and doctorate degrees in various fields and disciplines. 

Based on the university and course chosen, the tuition fees might vary from CAD 7,500 to CAD 22,500 per year. As English happens to be the most widely spoken language in Canada, students from other countries should prove their proficiency in English with the help of exams such as IELTS or TOEFL. 

Crime Rate:

In the early years of the 21st century, the crime rate in Canada was very high when compared to the crime rate as of 2020. 

Based on the stats obtained, the year 2019 had a 30% lower crime rate compared to what it was in the year 2003. 

For every 100,000 residents in Canada, the crime-related statistics are as follows:

  • The rate of criminal offenses is around 6,490 (approx.)
  • The rate of homicides is 1.8.
  • The rate of property crime is 3,510 (1.32 million cases approximately)
  • The rate of crimes related to vehicle theft is 231

The crime severity in Canada happens to be around 79.5%, which is more than most other countries of the world. 

Salaries:

The average Canadian salary in 2020 was around CAD 54,600 per year, which was roughly estimated to be around $1,000 per week. 

The provinces that had the highest growth in the salary rate were Nunavut (20.1%), British Columbia (5.6%), Northwest Territories (5.4%), and Yukon (5%).

Usually, the salaries of people may vary on the basis of the type of profession in which they are involved. 

Cost of Living:

Living in Canada can be expensive than 71% of the countries in the world, which makes it the non-preferrable choice for the people who opt for frugal living.

One of the most important things that you should know before moving to Canada is the cost of living there, which varies on the basis of the province, municipality, or territory that you choose.

By choosing a place, which has the most affordable prices, you can be able to meet a lot of your financial needs, which results in your personal financial growth. 

Given below is a list of the topmost affordable places in Canada as per the data that we have obtained.

PlaceCost of Living (approx.)

1 personFamily of 4 people
Thunder Bay, OntarioCAD 2,000CAD 4,200
Moncton, New BrunswickCAD 2,000CAD 4,150
Quebec City, QuebecCAD 2,000CAD 4,200
Guelph, OntarioCAD 2,300CAD 4,500
Kitchener-Waterloo, OntarioCAD 2,200CAD 4,400
Kingston, OntarioCAD 2,400CAD 4,600
London, OntarioCAD 2,100CAD 4,500
Abbotsford, British ColumbiaCAD 2,500CAD 4,800
Montreal, OntarioCAD 2,300CAD 4,700
Charlottetown, Prince Edward IslandCAD 2,000CAD 4,500

Housing & Accommodation – Given below is a table that will assist you in determining the average prices of housing and accommodation in Canada, in different provinces/territories.

While considering the overall stats of housing and accommodation costs in Canada, we have the following data.

  • Single bedroom apartment (480 sqft): CAD 1,100 to CAD 1,590 
  • Apartment of around 900 sqft: CAD 1,570 to CAD 2,150

However, as we can’t cover all the details of the provinces/territories in Canada, we will only be looking at Montreal, Toronto, and Calgary.


MontrealTorontoCalgary
Large ApartmentCAD 1,100CAD 1,900CAD 1,400
Medium-sized ApartmentCAD 900CAD 1,600CAD 1,200
Small ApartmentCAD700CAD 1,300CAD 1,000
Student RoomCAD 500CAD 750CAD 600

Anyhow, if you are looking to buy a property in Canada, the costs per square meter of land are presented below.

  • In the city’s centre: CAD 5,700
  • Outside the city: CAD 4,150

General – The general household items, groceries, and other essential items in Canada are available at the following prices. 

  • Milk (1ltr): CAD 2.24 to CAD 2.49
  • Eggs (12): CAD 3.48 to CAD 3.93
  • Bread (500g): CAD 2.04 to CAD 2.92
  • Apples (1kg): CAD 3.91 to CAD 4.11
  • Potatoes (1kg): CAD 2.54 to CAD 2.87
  • Cheese (500g) CAD 6.40 to CAD 10
  • Tomatoes (1kg): CAD 4.32 to CAD 4.80
  • Chicken (1kg): CAD 13 to CAD 14
  • Beef (1kg): CAD 15
  • Water (1.5 liters): CAD 2.17
  • Coca Cola (2 liters): CAD 2.30
  • Beer: CAD 3.06 to CAD 3.50
  • Wine (medium): CAD 15 to CAD 18

Utilities – The cost of utilities might vary on the basis of the housing and accommodation details of an individual. 

For example, the cost of utilities for an apartment of 900 sqft with 2 people would be around CAD 160 to CAD 170.

Whereas the cost of utilities for an apartment of 480 sqft with a single person would be around CAD 110.

Internet services, which vary on the type of internet and the speed, might be around CAD 53 to CAD 78.

Transportation – Given below are the costs related to transportation in Canada:

  • 1 liter of gas: CAD 1.11
  • Monthly pass for public transport: CAD 90 to CAD 110
  • One-way ticket (local transport): CAD 3.25
  • Taxi: CAD 2 for 1 km, CAD 4 as a general fare, and CAD 34 for waiting an hour.

Other details – There are some other general details, which might be helpful for you to get a general idea of the cost of living in Canada.

  • Yearly School fee (children): CAD 14,300
  • Pair of jeans (branded): CAD 65
  • Nike Running Shoes: CAD 100
  • Cappuccino: CAD 4.2
  • General medicine for cold: CAD 10 to CAD 12
  • 2 movie tickets: CAD 28
  • Gym membership: CAD 50 to CAD 60
  • Pack of 20 Marlboro cigarettes: CAD 15

Final Word:

Based on the details provided above, expats and non-residents can be able to get familiar with all of the major aspects that they need to pay attention to while living in Canada.

One of the important things that need to be taken into consideration is that the price amounts and tax rates might vary by the time you read this article, however, these were the approximately accurate rates and costs while writing this article.

That being said, if you need help with your permanent residency or second passport, you are definitely in the right place.

Additionally, if you require the services of an investment planner or wealth manager, you can obtain the best-in-class financial solutions offered by us by clicking here.

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