Consulting firm Mercer has released their 2023 global ranking of the most expensive cities and cost of living survey. While Canadians gripe at Toronto’s sky-high housing costs, viewed on a global scale, Toronto, while being the most expensive Canadian city to live in, ranks 90th out of 227 and is a relative bargain compared to Asian cities such as Hong Kong or Singapore.
For the second year in a row Toronto is the most expensive city in Canada according to Mercer’s results. Of the 227 global cities across five continents ranked, Toronto sits 90th globally, having dropped one spot from last year’s ranking. Vancouver remains the second most expensive city and slid eight places to 116th in the ranking. Montreal fell 10 spots to 135th, Ottawa moved down five spots to 137thand Calgary, the last Canadian city on the list dropped four spots to 145th. Compared to Canadian cities, the cost of living has increased more year-over-year in the U.S. with all American cities surveyed having gone up in the rankings since last year.
“Through the Cost of Living Survey, we see that despite domestic inflationary pressures that are affecting overall quality of living, Canada continues to be an attractive destination for remote workers,” said Nicole Stewart, Principal, Career at Mercer Canada. “Extensive remote work flexibility is causing many employees to re-shift their priorities and think differently about where they want to work and live, and this will continue to force organizations to develop effective compensation strategies for their globally distributed workforces.”
Canada is experiencing a slight period of economic stagnation, with the GDP contracting 0.1% in Q4 of 2022, and its total growth reduced to 3.5% over the entire year (from 5% in 2021). Additionally, the country experienced a slight decrease in the inflation rate in 2023, with inflation lowering to 5.2% in February 2023 (it was 5.7% a year before and had peaked at 8.1% in June 2022).
Key factors that shaped the world’s economy last year, such as inflation and key interest rate hikes, will continue to directly impact the pay and savings of employees who are internationally mobile, so flexibility is key.
Overall, the survey ranked Hong Kong as the most expensive city for international employees for another year in a row, with Singapore in second and three Swiss cities – Zurich, Geneva, and Basel – taking the third, fourth and fifth spots respectively.
Other cities appearing in the top 10 of Mercer’s most costly cities for international employees are New York, United States (6), Bern, Switzerland (7), Tel Aviv, Israel (8), Copenhagen, Denmark, (9) and Nassau, Bahamas (10).
The world’s least expensive cities for international employees, according to Mercer’s survey, are Havana, Cuba (225), Karachi, Pakistan (226) and Islamabad, Pakistan (227).
“The recent COVID-19 pandemic and political tensions around the globe accelerated widespread use of remote working, which, in turn, has prompted multinational employers to reassess how they manage their workforces. Competition in the global talent market is fierce, and with the cost-of-living crisis affecting both employees and organizations, employers need to be flexible. The structure of their compensation strategies for internationally mobile and remote workers must be not only clear but also backed by reliable data,” said Yvonne Traber, Partner, and Global Head of the Mobility business at Mercer.
New York City (number six in the global ranking) continues to be the most expensive city in North America, followed by Los Angeles (11) and San Francisco (14). All US cities in the ranking have gone up since last year, with the largest changes being for Detroit (+27 positions), Houston and Cleveland (both +24 positions).
Canadian cities are at the cheaper end of the ranking for North America. All of them having dropped since last year. Toronto is ranked the most expensive in the Canada (90 in the global ranking), followed by Vancouver (116), Montreal (135), Ottawa (137 and Calgary (145).
Five European cities are in the global top ten of the world’s most expensive locations. The first four cities are in Switzerland, with the fifth being Copenhagen. Other most expensive cities in Europe include London, Vienna, Amsterdam, Prague (up 27 spots in the global ranking since last year) and Helsinki.
Mercer’s widely recognized Cost of Living ranking is one of the world’s most comprehensive studies and is designed to help multinational companies and governments determine compensation strategies for their international assignees. New York City is used as the base city for all city ranking comparisons and currency movements are measured against the US dollar. The survey includes 400+ cities throughout the world; this year’s ranking includes 227 cities across five continents and measures the comparative cost of more than 200 items in each location, including housing, transportation, food, clothing, household goods, and entertainment.
To see the complete ranking click here.