Determinations come from Mercer’s 2024 Cost of Living City Ranking
TORONTO, ON–For the third consecutive year, Toronto is the most expensive city in Canada for international employees, according to the results of Mercer’s new 2024 Cost of Living City Ranking.
Mercer, a business of Marsh McLennan and a global leader in redefining the world of work, reshaping retirement and investment outcomes, and unlocking real health and well-being., today released its 2024 Cost of Living City Ranking. The ranking offers insights to help multinational employers plan compensation strategies for their international assignees.
Of the 226 global cities ranked across five continents, Canadian cities are at the more affordable end of the ranking for North America. Toronto sits at 92 globally and is the only Canadian city to improve in affordability, from 90 in 2023. Vancouver remains the second most expensive city in Canada, jumping 15 spots to 101, from 116 last year. Montreal also moved up 17 spots to 118, from 135, while Ottawa climbed 11 spots in the rankings to 126, from 137. The last Canadian city to make the list is Calgary, which jumped four spots to 141, up from 145, in last year’s ranking.
“Despite economic headwinds, in 2024, we’ve seen the Canadian economy show resilience and it is outperforming expectations,” said Vince Cordova (left), Mercer’s North American mobility advisory lead. “While concerns around cost of living remain, the labour market continues to show it’s on solid ground, making Canada an attractive destination for inbound foreign nationals. We are seeing signs of stability and inflation is gradually decreasing, but organizations need to remain vigilant in planning effective compensation strategies for their globally distributed workforces. Additionally, employers should be open about sharing cost of living and net pay information with prospective inbound staff so they can better understand the financial impacts of their relocation to Canada and make a fully informed decision on whether or not to move ahead.”
Rising housing costs in many cities around the world have made talent mobility a challenge for employers. Volatile inflation trends are also eroding the purchasing power of international assignees and putting additional strain on their compensation packages.
“Cost-of-living challenges have had a significant impact on multinational organizations and their employees,” said Yvonne Traber, Mercer’s Global Mobility Leader. “It is important for organizations to stay informed about cost-of-living trends and inflation rates and seek input from employees on these issues to effectively manage their effects.”
These factors can make it difficult for employers to attract and retain top talent and can increase compensation and benefits expenses, limit talent mobility, and raise operational costs.
“High living costs may cause assignees to adjust their lifestyle, cut back on discretionary spending or even struggle to meet their basic needs,” continued Traber. “To offset these challenges, employers can offer compensation packages that include housing allowances or subsidies or provide other support services. They can also explore alternative talent sourcing strategies.”
Around the world
Asia has the top two cities with the highest cost of living – Hong Kong retained the top spot in this year’s ranking, followed by Singapore, primarily driven by high rental accommodation costs. These important economic hubs also attract a large number of expatriates, further driving up the cost of goods.
Swiss cities Zurich, Geneva, and Basel round out the top five most expensive cities.
Five European cities are in the global top ten ranking, including four Swiss cities and London, which jumped nine places to eighth overall. While the cost of living in Europe varies across cities, the European Central Bank forecasts that the annual inflation rate in the Eurozone will continue to fall, meaning that costs could stabilize as European economies recover from recent setbacks.
Cost of living in the US remains a significant issue in 2024, with all ranked US cities placing in the top 100 and seven cities reaching the top 20. In comparison, Canadian cities are at the lower end of the ranking for North American cities. Mexican cities’ cost of living went up significantly from the prior year due to the peso gaining value in 2023. Mexico City ranked 33, up from 79 in 2023, and Monterrey ranked 115, up from 155 last year.
Within South America, Uruguay’s capital Montevideo ranks as the most expensive location for international employees (42). Several cities in the region saw significant movement compared to 2023 due to currency exchange rate and rental accommodation cost fluctuations: Santiago, Chile fell by 73 places to 160 in the ranking, while Bogota, Colombia rocketed 40 places to 174.
In the Pacific region, rising inflation is expected to put pressure on international employees this year. Sydney, Australia (58) ranks as the costliest city in the Pacific region, outrunning Noumea, New Caledonia, which has moved up 10 places to 60 in the global ranking.
The African cities that placed highest in the global ranking are Bangui in Central African Republic (14), Djibouti, the capital of the country by the same name (18), and N’djamena, Chad (21). Notably, Lagos, Nigeria dropped 178 places to 225, the largest change globally compared to 2023. This change is largely due to currency fluctuations including repeated devaluations of the naira. Ranked 15, Dubai, United Arab Emirates, is the costliest city in the Middle East, while Mumbai ranked 136 overall as the costliest city in India. (Full Ranking)
Top 10 Rankings, Plus Canadian Cities
1 Hong Kong, Hong Kong SAR
2 Singapore, Singapore
3 Zurich, Switzerland
4 Geneva, Switzerland
5 Basel, Switzerland
6 Bern, Switzerland
7 New York, United States
8 London, United Kingdom
9 Nassau, Bahamas
10 Los Angeles, United States
92 Toronto, Canada
101 Vancouver, Canada
118 Montreal, Canada
126 Ottawa, Canada
141 Calgary, Canada
About the 2024 Cost of Living City Ranking
Mercer’s Cost of Living City Ranking includes 226 cities across the world. It measures the comparative cost of more than 200 items in each location, including transportation, food, clothing, household goods and entertainment. The data collected provides key information employers need to design efficient and transparent compensation packages for international assignees. The figures used in Mercer’s Cost of Living and rental accommodation cost comparisons are derived from a survey conducted in March 2024.
Mercer believes in building brighter futures by redefining the world of work, reshaping retirement and investment outcomes and unlocking real health and well-being. Mercer’s more than 20,000 employees are based in 43 countries and the firm operates in over 130 countries. Mercer is a business of Marsh McLennan (NYSE: MMC), the world’s leading professional services firm in the areas of risk, strategy and people, with more than 85,000 colleagues and annual revenue of $23 billion. Through its market-leading businesses including Marsh, Guy Carpenter and Oliver Wyman, Marsh McLennan helps clients navigate an increasingly dynamic and complex environment.
Related Posts
