Purchasing Power: The Dollar Goes Furthest in These Provinces

A person carries shopping bags along a street in Montreal, on Dec. 14, 2024. The Canadian Press/Graham Hughes

Purchasing power differs across Canada’s provinces and territories, according to a new Statistics Canada study that outlined the cheapest and most expensive places to live in the country.

“The standard of living from earning $75,000 in one province or territory is not the same as earning that amount in another province or territory if the cost of living differs in each location,” says the StatCan report released July 31.

The study found British Columbia, Ontario, and Alberta to be the most expensive provinces to live in based on cost-of-living data from 2021. Meanwhile, the study found Prince Edward Island and New Brunswick to be the cheapest provinces to live in.

The agency found that a dollar in B.C. would purchase the same amount of goods and services as 82 cents would in New Brunswick.

While Nunavut was the most expensive territory, the study found that both Nunavut and the Northwest Territories were more expensive to live in than any province.

“In 2021, a person in Nunavut would have needed to spend $1.10 to purchase the equivalent amount of goods and services as $1.00 could purchase in British Columbia, the most expensive province,” the agency said.

Durable goods, such as furniture and appliances, were most expensive in B.C. and cheapest in Ontario, while semi-durable goods, such as clothing and reading material, were most expensive in Nova Scotia and cheapest in Newfoundland and Labrador.

Non-durable goods, such as food and medicine, were most expensive in B.C. and cheapest in P.E.I. Meanwhile, services including accommodation expenses were also most expensive in B.C. and cheapest in New Brunswick.

The average cost of public services, such as public health and education, was highest in B.C. and lowest in New Brunswick, P.E.I., and Newfoundland and Labrador.

Household Disposable Income

Along with studying the cost of living across the provinces and territories, StatCan also compared household disposable income by region to weigh differences in financial pressures.

Although prices were high in Alberta, the study found that those living in the province had disposable incomes high enough to compensate for the cost of living. Alberta ranked fourth in this category, behind only the Northwest Territories, Yukon, and Newfoundland and Labrador.

Meanwhile Ontario and B.C., the most expensive provinces, were both “heavily affected” by price adjustment when factoring the cost of living into household disposable income. When ranked according to household disposable income, the two provinces dropped respectively from fourth and fifth to eighth and ninth when the provinces’ costs of living was factored in.

Manitoba and Nunavut had the lowest disposable income among all the provinces and territories, before and after price adjustment, to account for cost of living, StatCan said.

Another measure of income the agency looked at was household disposable income plus the value of publicly provided services like health care and education services.

B.C. ranked lowest among all the provinces and territories after accounting for  public services and Ontario ranked second-lowest. Both provinces were “heavily affected” again by price adjustment accounting for public services.

In contrast, Nunavut fared “much better” than B.C. and Ontario, as its price-adjusted disposable income was higher than most other provinces and territories.

“Taken together, these results suggest that price adjustment and the value of publicly provided services both play an important role in understanding differences in economic well-being between regions,” StatCan said.