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Canadian Budget Guide for Newcomers
Managing your finances as a newcomer in any country is a daunting experience but with our newcomer’s guide to Canada you’ll have your spending in order and will be well on your way to settling in Canada.
Newcomer's Budget Guide to Canada
With our beginner’s guide to Canada, you’ll have your expenditures in order and be well on your path to adapting to Canada. Balancing your finances as a newbie is a difficult experience in any nation.
Check out a few of the expenses you should plan for in your budget for your new life in Canada.
- Budget-friendly Navigation and Accommodation
- Food and utility transportation
- Taxes on Banking and Investments
- Top Advice for Newcomers to Canada on How to Save Money
Housing: Rent or Buy?
It is entirely up to you whether or not you decide to buy or rent. The majority of immigrants find it simpler to rent initially before deciding to buy, although purchasing real estate in Canada could be a fantastic investment opportunity. In Canada, the price of purchasing a home can range from $285,027 in St. John’s (Newfoundland & Labrador) to $1,320,800 in Vancouver (British Columbia). The estimated costs of purchasing real estate in Canada are listed below.
Average Cost of Housing in Canada | |
Province | Estimated Price (CAD) |
Alberta | $372,116 – $472,502 |
British Columbia | $470,738 – $2,008,377 |
Manitoba | $283,472 – $291,976 |
New Brunswick | $196,391 – $246,946 |
Newfoundland & Labrador | $292,336 – $285,027 |
Northwest Territories | $200,000 – $599,000 |
Nova Scotia | $370,271 – $399,892 |
Ontario | $273,308 – $1,227,941 |
Prince Edward Island | $319,000 – $331,760 |
Saskatchewan | $303,282 – $363,551 |
As of April 2021, the monthly average rent in Canada is $1,675. Rent for a one-bedroom varies depending on the province or territory you want to live in, from about $786 in Lloydminster, Alberta, to roughly $1,935 in Vancouver (British Columbia). A summary of Canadian rental prices for 2021 may be found below.
Average Cost of Rentals in Canada | ||
Province | Estimated Price 1 Bedroom (CAD) | Estimated Price 2 Bedroom (CAD) |
Alberta | $786 – $1,191 | $899 – $1,483 |
British Columbia | $1,040 – $1,864 | $2,000 – $2,477 |
Manitoba | $1,181 | $1,455 |
New Brunswick | $2,150 | $2,488 |
Newfoundland & Labrador | $947 – $1,400 | $1,093 – $1,950 |
Northwest Territories | $1,575 | $1,843 – $2,100 |
Nova Scotia | $1,452 | $1,872 |
Ontario | $1,181 – $1,816 | $1,631 – $2,407 |
Prince Edward Island | $1,293 – $1,416 | $1,416 – $1,416 |
Saskatchewan | $926 – $976 | $1,096 – $1,168 |
Yukon | $852 | $1,000 |
In terms of housing costs, Newfoundland and Labrador will be the least costly province and territories in Canada in 2021, while British Columbia is the most expensive on average.
Transportation
You won’t need a car to get about if you’re a new immigrant to Canada. One of the safest and most effective transportation systems in the world is found in Canada. Moreover, it is relatively inexpensive. A one-way ticket would typically cost you $3.35, while a monthly pass will cost you about $90. However, it’s crucial to keep in mind that car prices have increased in 2021 if you decide to go by car. In Canada, a liter of gasoline or fuel costs about $1.12. Similar to home insurance, car insurance is mandated by law in Canada and, depending on where you choose to live, can range in price from $717 to $1,832 annually.
Based on data, the following list shows average yearly insurance rates by province.
Average Car Insurance in Canada | |
Province | Average Price per Year(CAD) |
Alberta | $1,316 |
British Columbia | $1,832 |
Manitoba | $1,140 |
New Brunswick | $867 |
Newfoundland & Labrador | $1,168 |
Nova Scotia | $891 |
Ontario | $1,528 |
Prince Edward Island | $816 |
Quebec | $717 |
Saskatchewan | $1,235 |
Independent Medical Insurance
Although Medicare, Canada’s excellent free public healthcare system, is generally known worldwide, many foreigners are unaware of the following: The length of time until you can use Medicare varies from province to province and might be up to three months.
The following extra expenses are not covered by public healthcare in Canada:
- prescription drugs,
- eyewear,
- dental services,
- physiotherapy, and
- ambulance services.
In order to be covered for some of the aforementioned healthcare services, it is advised that you obtain private health insurance in addition to healthcare coverage during the first few months after arriving in Canada. The average price of private health insurance in Canada is listed below:
Average Cost of Health Insurance in Canada | |
Type of Person Covered | Price CAD |
Family | $157 |
Single parent (father) | $78 |
Single parent (mother) | $110 |
Individual male | $47 |
Individual female | $80 |
Food and Utilities
The monthly cost of basic services like electricity, cooling, heating, water, and shelter might be around $165. Your monthly internet costs could range from $36 to $93 month. Your dietary requirements, where you reside in Canada, your shopping and eating habits, and the cost of food will all affect how much it will cost you. You should set out between $7 and $50 per meal if you like to eat out. Surveys show that the average Canadian family spends $214 per person per month on groceries.
Trading & Banking
Options for Banking for Newcomers
When you arrive in Canada, one of the first things you’ll need to do is open a bank account. It’s best to shop around first to acquire the greatest deal depending on your unique demands. There are five main banks in Canada, and each one provides newbie packages:
- Bank of Montreal (BMO);
- Scotiabank;
- Canadian Imperial Bank of Commerce (CIBC);
- Royal Bank of Canada (RBC); and
- Toronto-Dominion (TD) Bank.
Things to consider while choosing a bank for your account:
- Locations of branches and ATMs;
- Monthly fees (many banks provide free banking or Newcomer Packages);
- Extra fees;
- Monthly fees following the expiration of the free term; and
- Options for unsecured credit cards (if applicable).
Increasing Credit Score
You will be forced to rebuild your credit from scratch after relocating to Canada because you won’t be able to use your credit score from back home. Having a good rating may increase your chances of finding a job, acquiring a loan, renting an apartment, or even buying a property.
A credit score: what is it?
A credit score, which ranges from 300 to 900, is used to assess your creditworthiness. Better results come from a higher score.
How to Raise Your Credit Rating
- Make regular monthly payments using a secure credit card.
For newbies, a secured credit card is an excellent alternative because you might not initially get approved for a conventional credit card. Additionally, they provide annual fees and reasonable interest rates. Similar to an unsecured or standard credit card, it operates by requiring a deposit equal to your desired credit limit. It is similar to possessing a prepaid credit card, in other words.
Investing Possibilities
You should begin investing in your future as soon as you can as a new immigrant to Canada. Tax-free Savings Accounts (TFSAs) and Registered Retirement Savings Plans are two excellent choices to take into consideration.
Tax-free Savings Accounts (TFSAs)
You can invest your money in long-term investments without paying taxes thanks to TFSAs. In addition to compound interest, one extra benefit is the ability to make up any unmet yearly contribution limits in subsequent years.
Taxes
Canadian Income Tax
The progressive tax system in Canada means that your tax burden increases with your income. Your income is divided into tax brackets, each with a distinct rate of taxation. The lowest tax bracket will be applied first, and you will subsequently be charged a higher rate for each additional dollar. For instance, you would pay a 10% tax on a $1 income. You will pay 20 percent on the second dollar and 30 percent on the third. On $3, though, you will never be charged 30%. Rather, you will pay $0.60, or roughly 20%, of the original amount. By submitting a tax return, you must inform the CRA of your income.
Income Tax Rates in Canada | |
Province/Territory | Tax Rate |
Alberta | ● 10% on first $131,220 of taxable income ● 12% on the next $131,221 – $157,464 ● 13% on the next $157,465-$209,952 ● 14% on the next $209,953 – $314,928 ● 15% on the amount over $314,928 |
British Columbia | ● 5.06% on first $42,184 of taxable income ● 7.7% on the next $42,184 – $84,369 ● 10.5% on the next $84,369-$96,966 ● 12.29% on the next $96,866 – $117,623 ● 14.7% on the next $117,623 – $159,483 ● 16.8% on the amount over $159,483 – $222,420 |
Manitoba | ● 10.8% on first $33,723 of taxable income ● 12.75% on the next $33,723 – $72,885 ● 17.4% on the amount over $72,885 |
New Brunswick | ● 9.68% on first $43,835 of taxable income ● 14.82% on the next $43,835 – $87,671 ● 16.52% on the next $87,671 – $142,534 ● 17.84% on the next $142,534 – $162,383 ● 20.3% on the amount over $162,383 |
Nova Scotia | ● 8.79% on first $29,590 of taxable income ● 14.95% on the next $29,590 – $59,180 ● 16.67% on the next $59,181 – $93,000 ● 17.5% on the next $93,001 – $150,000 ● 21% on the amount over $150,000 |
Newfoundland & Labrador | ● 8.7% on first $38,081 of taxable income ● 14.5% on the next $38,081 – $76,161 ● 15.8% on the next $76,161 – $135,973 ● 17.3% on the next $135,973 – $190,363 ● 18.3% on the amount over $190,363 |
Northwest Territories | ● 5.9% on first $44,396 of taxable income ● 8.6% on the next $44,396 – $88,796 ● 12.2% on the next $88,796 – $144,362 ● 14.05% on the amount over $144,362 |
Nunavut | ● 4% on first $46,740 of taxable income ● 7% on the next $46,740 – $93,480 ● 9% on the next $93,480 – $151,978 ● 11.5% on the amount over $151,978 |
Ontario | ● 5.05% on first $45,142 of taxable income ● 9.15% on the next $45,142 – $90,287 ● 11.6% on the next $90,287 – $150,000 ● 12.6% on the next $150,001 – $220,000 ● 13.16% on the amount over $220,000 |
Prince Edward Island | ● 9.8% on first $31,984 of taxable income ● 13.8% on the next $31,985 – $63,969 ● 16.7% on the amount over $63,969 |
Quebec | ● 15% on first $45,105 of taxable income ● 20% on the next $45,105 – $90,200 ● 24% on the next $90,200 – $109,755 ● 125.75% on the amount over $109,755 |
Saskatchewan | ● 10.5% on first $45,677 of taxable income ● 12.5% on the next $45,677 – $130,506 ● 14.5% on the amount over $130,506 |
Yukon | ● 6.4% on first $49,020 of taxable income ● 9% on the next $49,020 – $98,040 ● 10.9% on the next $98,040 up to $151,978 ● 12.8% on the next $151,978 – $500,000 ● 15% on the amount over $500,000 |
Top Advice for Newcomers to Canada on How to Save Money
1. Consult with locals to locate the best bargains
While residing in Canada, there are a plethora of options to reduce your expenses. Speaking with Canadians in your neighborhood is the greatest method to find the best bargains besides looking online. They frequently know where to uncover the best-unpublicized discounts, which could result in significant cost savings for you.
A few national chains in Canada provide a 10 percent discount or will match pricing. Numerous retailers also provide coupons, which may result in significant discounts.
2. Be ready for unforeseen costs
It’s wise to keep some cash on hand in case something unforeseen occurs. For instance, if you come to Canada under a scheme like the Federal Skilled Worker Program, where you are not required to have a work offer there, you could need money to cover your living expenses for the initial few months you spend there before you find employment.
If you own a home, additional unforeseen expenses can occur, and you might need to have money set aside for maintenance. Between three and five percent of the value of your house is a fair amount to set aside.
3. Maintain Your Budget
Try to stay within your budget, no matter how challenging that may be. It is wise to keep some cash on hand for the aforementioned unforeseen situations. To avoid having to use your money, it may be advisable to have an emergency fund account established before you arrive in Canada. The better your preparation, the better.
Are You Prepared to Move to Canada?
Anyone’s life involves a crucial yet intimidating step called applying for a visa to Canada. Every chance to immigrate to Canada is worthwhile since it has the potential to change your life in a variety of ways. You may provide for yourself and your loved ones by using the money you’ve worked so hard to earn wisely.
