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T.O. among expensive cities
Rises 35 spots to 47th place in global survey
Soaring loonie, commodities seen as main reasons
Jun. 26, 2006. 06:29 AM
TONY WONG
BUSINESS REPORTER
A soaring loonie has seen Toronto jump an unprecedented 35 spots in a global cost-of-living survey, making it more expensive for foreign companies to relocate their employees here.
Canada's largest city broke into the top 50 most expensive cities to live in, coming in at number 47, according to an annual survey by Mercer Human Resource Consulting to be released today.
Last year the city was ranked 82 worldwide, but a dollar powered by a global demand for commodities has made the city more expensive for immigrants.
"The strength of the Canadian currency has been the big driver of this, we've had a very strong economy and there are some good and bad parts of that. One result is that we are more expensive to live in," said Brian Lindenberg, senior consultant for Mercer, in an interview.
Lindenberg said this was the biggest jump in the rankings he has seen in recent memory.
"Toronto has been relatively stable over the years in relation to other cities," he said.
In 2004, the city was ranked 89th in the world, before moving up seven spots last year.
Lindenberg said the current jump means companies now will have to pay more to attract talent to the Toronto market.
The survey covers 144 cities, and compares costs for more than 200 items including housing, transportation, food, clothing, household goods and entertainment.
"Certainly if you're hiring someone from a smaller city, then it's a consideration. And since you've got to pay your people more, you have to start figuring out what your budget allows."
However, while companies relocating head offices or large pools of employees may think twice about the cost factor, the consultant says he doesn't foresee an exodus from the Toronto market.
"If you've got to be here, then you have to be here," he said.
Another study by CB Richard Ellis, released this month, shows that Toronto is within striking distance when it comes to cost of office space, mainly due to tight commercial vacancies and the dollar.
Office space isn't even a factor in the Mercer study, although residential living costs are.
The most expensive city globally is Moscow, replacing Tokyo. It's followed by Seoul, Tokyo, Hong Kong and London.
New York, in tenth spot, remains the most expensive city in North America.
But several Canadian cities are rising fast. Vancouver moved up 31 spots to 56th place, while Calgary jumped to 71st place, up 27 spots. Montreal also rose 27 places to 80.
Lindenberg suspects that Calgary, amid the oil and gas boom, will rise up the ladder next year, but that Toronto should remain stable.
"My gut tells me we're not going to see the same kind of bump up we just experienced," he said. "I don't think there's much more upside to the dollar and we will likely see more stabilization."
Still, there could be more volatility ahead as at least one economist is predicting the Canadian dollar will hit parity with the U.S. dollar by the end of 2007. Others have predicted the opposite.
But cost of living isn't the only factor in attracting top talent to the city. Quality of life is also important, said Lindenberg.
A separate Mercer study released this year shows that Toronto ranked 15th in the world for quality of living, up one spot from last year. The survey ranked the city on criteria such as political stability, crime, education, housing and recreation.
Zurich and Geneva were ranked first and second.
T.O. among expensive cities
Rises 35 spots to 47th place in global survey
Soaring loonie, commodities seen as main reasons
Jun. 26, 2006. 06:29 AM
TONY WONG
BUSINESS REPORTER
A soaring loonie has seen Toronto jump an unprecedented 35 spots in a global cost-of-living survey, making it more expensive for foreign companies to relocate their employees here.
Canada's largest city broke into the top 50 most expensive cities to live in, coming in at number 47, according to an annual survey by Mercer Human Resource Consulting to be released today.
Last year the city was ranked 82 worldwide, but a dollar powered by a global demand for commodities has made the city more expensive for immigrants.
"The strength of the Canadian currency has been the big driver of this, we've had a very strong economy and there are some good and bad parts of that. One result is that we are more expensive to live in," said Brian Lindenberg, senior consultant for Mercer, in an interview.
Lindenberg said this was the biggest jump in the rankings he has seen in recent memory.
"Toronto has been relatively stable over the years in relation to other cities," he said.
In 2004, the city was ranked 89th in the world, before moving up seven spots last year.
Lindenberg said the current jump means companies now will have to pay more to attract talent to the Toronto market.
The survey covers 144 cities, and compares costs for more than 200 items including housing, transportation, food, clothing, household goods and entertainment.
"Certainly if you're hiring someone from a smaller city, then it's a consideration. And since you've got to pay your people more, you have to start figuring out what your budget allows."
However, while companies relocating head offices or large pools of employees may think twice about the cost factor, the consultant says he doesn't foresee an exodus from the Toronto market.
"If you've got to be here, then you have to be here," he said.
Another study by CB Richard Ellis, released this month, shows that Toronto is within striking distance when it comes to cost of office space, mainly due to tight commercial vacancies and the dollar.
Office space isn't even a factor in the Mercer study, although residential living costs are.
The most expensive city globally is Moscow, replacing Tokyo. It's followed by Seoul, Tokyo, Hong Kong and London.
New York, in tenth spot, remains the most expensive city in North America.
But several Canadian cities are rising fast. Vancouver moved up 31 spots to 56th place, while Calgary jumped to 71st place, up 27 spots. Montreal also rose 27 places to 80.
Lindenberg suspects that Calgary, amid the oil and gas boom, will rise up the ladder next year, but that Toronto should remain stable.
"My gut tells me we're not going to see the same kind of bump up we just experienced," he said. "I don't think there's much more upside to the dollar and we will likely see more stabilization."
Still, there could be more volatility ahead as at least one economist is predicting the Canadian dollar will hit parity with the U.S. dollar by the end of 2007. Others have predicted the opposite.
But cost of living isn't the only factor in attracting top talent to the city. Quality of life is also important, said Lindenberg.
A separate Mercer study released this year shows that Toronto ranked 15th in the world for quality of living, up one spot from last year. The survey ranked the city on criteria such as political stability, crime, education, housing and recreation.
Zurich and Geneva were ranked first and second.