After spending the pandemic living and working in a 550-square-foot apartment in Toronto’s Junction Triangle, Ian Cable and his girlfriend Amy Stewart began searching the neighbourhood for more living space.
“We just looked at what it would take to buy a house, and it would have been within our means, but very, very stretched,” Mr. Cable says. “We would have been house-poor.”
Instead, the couple – who are both in their early 40s – moved two-and-a-half hours north to Ms. Stewart’s hometown of Owen Sound, settling into a modestly-sized three bedroom home on a one-acre lot. While the house cost a fraction of a similar property in Toronto, Mr. Cable says they’ve run into a few costs they hadn’t expected.
Since the pandemic struck, thousands of Canadians have left big cities in search of more room and affordable real estate. But moving to rural areas comes with unanticipated changes in living expenses, such as higher transportation costs, repairs and insurance.
For example, Mr. Cable and his girlfriend only needed one vehicle when they lived in Toronto. “Supplement your car with good transit and a bicycle and a walkable neighbourhood, and one is more than enough,” he said.
When eyeing their move to Owen Sound, they decided to look for an additional car. Used car prices were skyrocketing because of supply shortages, he said, adding: “I was really quite surprised to see how much even an okay, older used car would be.”
Mr. Cable says one option he was considering, a used 2011 Mazda 6, was priced over $10,000. In the end, however, Mr. Cable’s mother and stepfather gifted them one of their vehicles.
According to a Statistics Canada report published in January, more than 50,000 people left Toronto and almost 25,000 left Montreal for smaller towns and villages between July, 2019 and July, 2020.
Isaiah Chan, the vice-president of programs and services at Credit Counselling Society, a non-profit organization that helps Canadians manage debt and personal finances, says people who leave big cities for the country will have to contend with driving more often and farther, especially parents.
“If your kid is in hockey – and this is a real life example from someone I was speaking with – they didn’t realize that instead of driving 30 minutes to a hockey game it’s now two to three hours,” he said, adding that getting the kids to school could also take significantly longer.
Leaving the city will also often require more frequent car repairs, longer commuting times and more trips to the pump at a time of soaring gas prices.
Vehicle insurance costs and property taxes can also be higher outside of Canada’s urban centres. Daycare costs, meanwhile, are highest in Canada’s biggest cities, but some smaller communities are struggling with rising fees because of a lack of providers.
In addition, some of the services city dwellers enjoy might not exist in more rural destinations, while others could come at a steeper price. More significant sticker-shock items can include the higher cost of maintenance, services and repairs of all kinds, specialty food items, even insurance.
“The more rural you are, the less organized fire and emergency response service you have, and that’s reflected in insurance costs,” says Sandy Lyons, a licensed insolvency trustee and credit counsellor for Grant Thornton, and a financial literacy volunteer for the Chartered Professional Accountants of Canada. “In terms of rural repair services, the smaller your population, the smaller the options are, and that can drive up prices.”
Basic services that city dwellers often take for granted can also get more complicated, and more costly, the farther they are from the city, according to Mr. Lyons, who himself recently moved from Calgary to Lethbridge, Alta.
“People moving into a very small centre might find themselves not with a sewer system, but with a septic field system, which has its own separate costs,” he says. A septic system typically only costs a few hundreds dollars annually to maintain, and can last between 15 and 40 years, but can cost tens of thousands of dollars to replace. Other infrastructure costs and inconvenience could include taking trash to a garbage dump or transporting water in locations that don’t have clean drinking water readily available.
Furthermore, as workplaces begin to reopen, Mr. Lyons says some of those who left major cities might have to commute back and forth on a regular basis or face penalties for working remotely full time. Moving away from the city could also create a budget crunch on the earnings side of the equation.
“I’ve seen people who have moved from big cities to a smaller centre and then moved back because they didn’t really sit down and think what it would mean for their opportunities for employment,” he says.
Mr. Lyons strongly recommends doing plenty of research, talking to locals prior to moving and working those additional costs into budget planning. “When you choose to make the move I think you have to look at the services you currently access, whether or not those services exist in the new centre that you’re moving to, and really exploring what the rates are,” he says.
Are you a young Canadian with money on your mind? To set yourself up for success and steer clear of costly mistakes, listen to our award-winning Stress Test podcast.