This story is over 5 years old.

Can you afford to live in Toronto

Forget about saving if you’re living on an income under $45,000 in Canada’s largest city

Toronto has become an absurdly expensive city to live in. In 2008, Toronto’s living wage, that is, the minimum amount necessary for an individual to meet their basic needs, was $16.60 per hour, or an annual income of $34,000. Since then, the cost of childcare in Toronto has risen by roughly 30 percent, rent has gone up an average of 13 percent, and the cost of public transit has grown by 36 percent. Home prices are outrageous — the average price for a 1 bedroom condominium downtown is around $400,000, and the average price for a single detached home, $1.2 million.


This wouldn’t be significant if our wages had gone up by the same pace. But they’ve merely inched along, rising a measly 2.5 percent annually on average, over the last decade. There were 1.46 million jobs in Toronto as of 2016, 38,000 more since 2015, but the bulk of these additional jobs were part-time, with little or no benefits.

As it stands right now, the median household income in Toronto, based on a living wage of roughly $19 per hour, is $72,830 — that means, half of Toronto’s households earn less than $72,830 and half earn more. Remember that’s households, not individual incomes.

An informal survey among my own friends and colleagues, roughly in their late 20s to early 30s pegs average incomes in the downtown Toronto area at around $50,000 to $60,000. Some earn as little as $35,000 annually, a salary that is barely enough to live on in this city, let alone enjoy it.

So what does it take to live comfortably in Toronto? Take a look at this chart that tells you just how far your salary goes:

You’ll observe a couple of interesting things.

First, taxes and deductions make a huge difference to your take-home salary. If you pay into a pension and benefit plan, you’re likely to have an even smaller take-home income, which is fine, considering the fact that you’re getting something out of it (long-term savings, drug and dental coverage).

Second, the rent figures listed in the graphic above come from, but they encompass all of Toronto. Many young, single people, especially those who’ve moved from other cities and countries live in the downtown core, where the average rent for a one bedroom condo is roughly $1,400. So you’ve lost a few hundred in spending money right there.

Third, the amount you have left to live on might seem like a decent sum of money at first glance, but remember that you have to use this money for groceries, to pay off any kind of debt you might still have, household supplies, personal care, clothes, one-time purchases like a new winter coat, and an occasional night out so you don’t drive yourself crazy. I haven’t even bothered including savings or travel in this equation.

Let’s say you go out twice a month. A nice dinner, a few drinks, cabs, can come to a hefty $100, and that’s a conservative estimate. $200 a month on “entertainment on a $45K salary is definitely affordable, and that leaves you with $1,300 for everything else. Still affordable.

But most of us don’t just go out twice a month, we go out at least once a week. A drink after work and snacks can come to $20, easily. If you don’t have the time to cook at home, you’re paying $12 to $13 for lunch. On average it’s probably pretty easy to spend about $250/week which leaves you with barely any money left for unexpected expenses like a flight ticket home, or dental treatment not covered by your employer. The bottom line is that you can live on an average income in Toronto. You don’t need to be close to a six-figure earner to live in this city. But many young people move to big cities like Toronto, New York and London and live in the core of these cities not just to exist, but to immerse themselves in the culture of big city life. Unfortunately, downtown rents, concerts, exhibitions, film festivals, drinking and dining come at a significant cost, one that most of us simply can’t afford on average incomes.

Follow Vanmala on Twitter