'The labour market continues to show it's on solid group, making Canada an attractive destination'
Toronto has been named the most expensive city in Canada for international employees for the third consecutive year, according to Mercer’s 2024 Cost of Living City Ranking.
The annual ranking, which assesses the living costs of 226 global cities, offers insights to multinational employers in planning compensation strategies for their international assignees.
Of the Canadian cities included in the ranking, Toronto is the only one to improve in affordability, moving to 92nd place globally from 90th in 2023.
“Despite economic headwinds, in 2024, we’ve seen the Canadian economy show resilience and it is outperforming expectations,” said Vince Cordova, Mercer’s North American mobility advisory lead. “While concerns around cost of living remain, the labour market continues to show it’s on solid ground, making Canada an attractive destination for inbound foreign nationals.”
Vancouver, Montreal also among expensive cities
Vancouver is the second most expensive city in Canada, jumping 15 spots to 101 from 116 last year. Montreal also saw a significant rise, moving up 17 spots to 118 from 135.
Ottawa climbed 11 spots to 126 from 137, and Calgary rounded out the Canadian cities on the list, rising to 141 from 145, said Mercer in its report.
Rising housing costs and volatile inflation trends are significant challenges for international employees and employers alike.
“Cost-of-living challenges have had a significant impact on multinational organizations and their employees,” said Yvonne Traber, Mercer’s Global Mobility Leader.
“It is important for organizations to stay informed about cost-of-living trends and inflation rates and seek input from employees on these issues to effectively manage their effects.”
Attracting, retaining international employees
Mercer’s report highlights the difficulty employers face in attracting and retaining top talent amid rising living costs.
“High living costs may cause assignees to adjust their lifestyle, cut back on discretionary spending or even struggle to meet their basic needs,” Traber noted. To mitigate these challenges, she suggested that employers consider offering housing allowances or other support services, and explore alternative talent sourcing strategies.
Globally, Asian cities dominate the top of the ranking. Hong Kong retains its position as the most expensive city, followed by Singapore, primarily driven by high rental accommodation costs. Swiss cities Zurich, Geneva, and Basel complete the top five.
Five European cities feature in the global top ten, including four Swiss cities and London, which jumped nine places to eighth overall. Despite varying costs across the continent, the European Central Bank forecasts that inflation in the Eurozone will continue to fall, potentially stabilizing living costs.
Worldwide ranking of expensive cities
In the United States, living costs remain high with all ranked cities placing in the top 100, and seven reaching the top 20. Meanwhile, Canadian cities remain more affordable compared to their North American counterparts, said Mercer.
The cost of living in Mexican cities has surged, with Mexico City leaping to 33rd place from 79th in 2023, and Monterrey rising to 115 from 155. This increase is attributed to the peso’s value gain in 2023.
South America’s costliest city for international employees is Montevideo, Uruguay, at 42nd place. Other significant movements include Santiago, Chile, falling 73 places to 160, and Bogota, Colombia, rising 40 places to 174.
In the Pacific region, Sydney, Australia, ranks as the most expensive city at 58th place, followed by Noumea, New Caledonia, at 60th. Rising inflation in the region is expected to put additional pressure on international employees, said Mercer.
Africa's highest-ranked cities include Bangui, Central African Republic, at 14th, Djibouti at 18th, and N’djamena, Chad, at 21st. Lagos, Nigeria, experienced the largest drop globally, falling 178 places to 225 due to currency devaluations.
In the Middle East, Dubai ranks 15th, making it the costliest city in the region, while Mumbai ranks 136th overall as the most expensive city in India.
