Money in Canada

Personal experience

Anastasia Gobza

Designer

We moved to Canada with my husband six months ago, he has been working for a Russian-Canadian company with an office in Vancouver for almost 5 years.

I work freelance, but will be looking for an office job: interested in getting Canadian work experience.

Taxes

Canada is a state consisting of 10 provinces and 3 territories, so taxes are levied at the federal and provincial levels. The main tax is the income tax, also called the federal tax, which has a progressive scale of payment.

Provincial taxes vary from province to province. Here are the taxes for Vancouver, which is in British Columbia.

Unlike Russia, in Canada, every working citizen or resident of the country must file a tax return independently. The tax return is submitted once a year no later than April 30.

If a citizen receives less than 7,500 CA$ (365,000 rubles) per year, then he is completely exempt from paying taxes.

There are categories of citizens who pay less taxes. These include:

a taxpayer supporting disabled people or persons of retirement age,
couples with a minor child,
spouse without work,
buyers of their first home.

Each province has its own VAT and ranges from 5 to 7%.

The tax on the use of real estate owned is paid once a year and amounts to 1-2% of the value of the property. When purchasing real estate you also need to pay tax, it is progressive.

Savings, deposits, investments

Survey results show that three out of four Canadians favour saving or investing. Investment funds account for 38 per cent of Canadians’ financial wealth.

Some of the most popular methods of personal savings among Canadians are the RRSP (individual retirement plan) and RESP (savings plan for a child’s future education).

An individual retirement plan not only helps you set aside money for your old age, but also helps you reduce your tax rate. The money invested is deducted from your annual income, income tax is recalculated and reimbursed by the government by cheque. Money from this account can be invested in financial programmes.

For example:

savings accounts,
Canada Saving Bonds,
Guaranteed Investment Certificates (GICs) – investment funds (segregated funds).

Investment earnings are not taxed as long as no funds are withdrawn from the account.

In a child’s education savings programme, you can invest a maximum of CA$2,500 (121,750 ₽) per year, and the government will add 30% to this amount. If the family income is low, additional subsidies are available. The money can only be withdrawn when the child goes to school.

Real estate is a popular way to invest in Canada: housing prices are constantly rising. In July 2019, property sales in Vancouver increased by almost a quarter.

 

Health care

Canadian healthcare is paid for by the government, except for dental visits, physiotherapy, eyeglass prescriptions and plastic surgery. Citizens and residents can get a Health Card insurance policy.

The initial appointment is with a general practitioner, who can then refer to a subspecialist. But there is a problem that many Canadians complain about: the queue can wait for months. In a life-threatening emergency, an ambulance will take you straight to the ER without a waiting list.

Nevertheless, two-thirds of Canadians take out private insurance policies themselves or get them at work. They can cover the dentist and the cost of pills. By the way, very few drugs are sold without a prescription at the pharmacy.

For example, the company where my husband works pays for insurance not only for him, but also for me as a spouse. It costs CA$150 (7,300 ₽) every month.

“Each province has its own rules for insurance and health services. When I was pregnant, I was seen and delivered in Richmond, British Columbia.Health insurance in British Columbia covers all pregnancy-related health services, including check-ups, tests, ultrasounds and the birth itself. The birth takes place in an individual room, regardless of whether you have additional insurance.A partner/relative can attend the birth and stay in the room and overnight while the mother is in the hospital.The feeling of being in a maternity hospital is like being in a sanatorium. The overall experience during pregnancy and labour is very positive.During the whole 9 months I did not have a single complaint with the doctors”.

Irina, living in Vancouver for 5 years.

Housing

Vancouver real estate is some of the most expensive in all of Canada. We live within walking distance to the underground and close to Downtown, in a new one-bedroom high-rise building. Rent for this flat starts at $1,600 CA$ (77,920 ₽) per month. The price includes all utilities except electricity and internet, for which we pay separately. This is about CA$50 (2,440 ₽) for electricity and CA$70 (3,410 ₽) for internet.

To rent a flat, you need to provide proof of ability to pay. This is most often a work certificate, but references from a past landlord may also be requested. And, of course, you will have to pay a deposit of 50% of the rent plus 50% if you have a pet.

Most flats are rented without furniture, but the flat will have a kitchen with all appliances (dishwasher, refrigerator, microwave), built-in wardrobes. Washing machine and dryer can be located in the flat or in the common area.

For CA$900 (43,830 ₽), you can find a basement – an apartment that will be located in the basement.

An interesting point: the landlord is not allowed to increase the rent amount by more than the percentage of inflation per year. As of June 2019, inflation was 2.4 per cent – the highest inflation rate since October 2018.

You don’t have to be a citizen to buy a property, all you need is a permanent residentship. The mortgage interest rate will be around 3.5-4% per annum.

Prices for a flat in our building start from CA$600,000 (29,220,000 ₽).

Nutrition

The choice of shops is quite large, ranging from Whole Food’s with a huge range of organic food and home goods, to the more budget Chinese supermarket T&T, where you can buy live crab or durian in addition to local produce.

We spend about CA$500-600 (24,350 ₽ – 29,220 ₽) on food in a month.

It’s worth noting that all shop prices are tax-free, meaning at the checkout, the cheque increases by 5% federal plus 7% provincial tax.

“Stores are divided into several types:
1. relatively small shops with opening hours from 7:00 to 23:00. They are usually located closer to home and their prices are higher than average.
2. large Whole sale shops. Prices in them are lower than in small shops, always a lot of discounts, but there are not very many such shops. In addition, in the largest Whole sale chain – Costco you need to buy a membership, similar to the European Metro.
3- Vegetables and fruits are favourable at farmers markets, but most of these markets are seasonal.
In the 4 years I’ve been in Vancouver, the price of food has gone up by about 30%”.

Irina, living in Vancouver for 5 years.

Transport

Public transport in Vancouver includes buses, trolleybuses, the West Coast Express commuter rail line, the Sky Train light rail and the Sea Bus passenger ferries.

The underground, as in European cities, is divided into three zones, which determines the cost of a ticket. The price may also depend on the day of the week, time of day and the method of payment (pass, Visa PayPass or just a one-time ticket).

It is most favourable to buy a Compass pass, it can be topped up for a month or just for any amount.

One trip in one zone will cost 2.40 CA$ (120 ₽), and in two zones 3.45 CA$ (170 ₽), to cross all three zones will cost 4.50 CA$ (220 ₽). But, as in Moscow, transferring or re-travelling on Compass within 90 minutes will be free of charge.

Vancouver is the perfect city to get around by bike. You can buy a bike at Facrbook Market from CA$100 (4,870 ₽). Or you can rent a city bike for the day for 12 CA$ (580 ₽).

Travelling by car is faster, but it will also cost a lot more to maintain a car. A litre of fuel will cost an average of CA$1.44 (about 70 ₽).

Education, Children, Retirement

Higher education in Canada is tuition-free, even though universities receive 90 per cent of their funding from the government. Tuition prices vary and average between $8,000 and $60,000 CA$ (389,600 to 2,922,000 ₽) per year.

If there is a child in the family, it is possible to receive help from the government in the form of an allowance based on family income.

The retirement age in Canada is 65 for both men and women. Not only natives, but also immigrants can receive an old-age pension, but for this purpose it is necessary to live in the country continuously for at least 10 years.

The minimum pension in 2019 is CA$667 (32,480 ₽) per month. The average payment for married couples is CA$1,066 (51,910 ₽), while for singles the amount will be higher at CA$1,500 (73,050 ₽).

The state pension contribution levied on all employed persons is 4.96 per cent.

Salaries

The living wage in Canada is measured by an hourly rate that is regulated by the government. The minimum wage varies from province to province, but differs slightly:

● Ontario – $14 CA$ (680 ₽)

● British Columbia – $12.65 CA$ (620 ₽)

● Quebec – $12 CA$ (584 ₽)

By earning minimum wage, anyone can provide a decent standard of living.

As with the rest of the world, one of the most popular fields is IT. Vancouver is home to many offices of international corporations such as Microsoft and Amazon.

A good salary for Canada is at least CA$100,000 (4,870,000 ₽) a year. One of the highest paying fields is medicine.

Entertainment

In Vancouver, as in any big metropolis, there are cinemas, museums, restaurants and cafes, concerts and various festivals.

Vancouver is famous for the richness of nature, so most of the entertainment is connected with it. You can go hiking (hiking in the mountains) of any complexity, get to a ski resort in an hour, do sapboarding (stand-up paddleboarding) in the ocean or just have a picnic with a barbecue on the beach.

It is customary to leave a tip of 10% or more in coffee shops (even if you buy a single cup of coffee), restaurants and other service-related places.

 

“Some people say that Vancouver can be boring, but I love it because I can always go hiking in the most beautiful places. But it’s very expensive to order food from a restaurant every time, you just see the price go up when you add the taxes, the delivery price and the tip for the courier.”

Mike Chang, living in Vancouver for 17 years.

Local

Canada has a strong recycling culture. When you buy any beverage in glass, plastic or aluminium containers in a shop, the price will include the cost of the bottle or can (depending on the volume, from 5 to 25 cents (2 to 12 ₽)), which you can then return by taking the bottles to a recycling centre or back to the shop.

Among the shops, the large TJX chain is popular. It includes three shops where you can buy almost everything at big discounts: branded clothes and shoes, cosmetics, home, garden and pet products, furniture, stationery, groceries and much more. You can save a lot of money this way.

In large networks, almost weekly marketing campaigns and loyalty systems are held, so it is very profitable to acquire customer cards. For example, at Shoppers Drugmart, a drugstore with a wide range of products, you can buy something for 40 CA$ (1,950 ₽) and get 10 CA$ (490 ₽) back on your card and use it for your next purchase.

Mobile phones and home internet are very expensive in Canada. Right now, the best mobile plan is CA$60 (2,920 ₽) for 8 GB of internet and unlimited calls, but a couple of years ago, you couldn’t even get that.

Conclusions

Overall, the standard of living in Canada is one of the highest among developed countries.
An important role in this is played by the help of the state, the stability of the economy and the reliability of the banking system.
Taxes are high, but there are many tax deductions that will help to reduce the tax burden.
You can save quite well if you follow promotions in shops.
Medicine is free, but you have to wait quite a long time to get an appointment with a doctor.
The mortgage rate is 4.5-5%, but property prices are high and constantly rising.
Retirement age starts at 65 and the minimum pension is CA$667 (32,480 ₽).