The Decibel - Stress Test: Why millennials and Gen Z are Alberta-bound for a more affordable life

Episode Date: March 26, 2023

In 2022, the number of people moving to Alberta hit its highest level in almost a decade. At the same time, a record number of people left Toronto for other provinces. And it all comes down to affordability. In this episode, we’ll delve into the factors contributing to the rise in interprovincial migration and hear from Canadians who made the move - and how it’s worked out for them.

Hi, I'm Mainika Raman-Wilms, and today we're bringing you a bonus episode on our Decibel Feed. It's from the new season of Stress Test, the Globe's personal finance podcast. It's a show that dives into the money issues impacting Canadians, everything from what you need to know about your taxes to the cost of IVF treatments. You can find Stress Test on all your podcast feeds. So here's the first episode of their new season. Hope you enjoy it. Toronto is vibrant.

Vancouver is beautiful. And Calgary, it's near the mountains, plus it's cheaper. And people are moving there. In 2022, the number of people moving to Alberta hit its highest level in almost a decade. At the same time, a record number of people left Toronto for other provinces. So why are all these Canadians uprooting their lives? Well, affordability is one major reason. Today, we'll find out how that's worked out for

some of them. Welcome to Season 7 of Stress Test, a personal finance podcast for millennials and Gen Z. I'm Rob Carrick, personal finance columnist at The Globe and Mail. And I'm Roma Luzio, personal finance editor at The Globe. In many ways, where you live defines you, your career, your lifestyle, and your finances. But housing is simply more expensive in some parts of the country. Rob, people were moving between provinces a lot during the pandemic, but it's still happening. What's driving this? I think the biggest factor is housing affordability, and I'll give you some numbers to back it up. Earlier this year, the average price of a home in Toronto or Vancouver was about $1.1 million. In Calgary, which we're focusing on today, the average price is less than half that.

It used to be that when people were priced out of the big cities, they would move to the suburbs or surrounding cities and towns. Roma, why isn't that working right now? Well, what's happened is that the suburbs had a major influx of people during the pandemic, and they have also become incredibly unaffordable for young Canadians. On the outskirts of Toronto, you have Hamilton and Barrie. These are cities that housing prices have reached unaffordable levels as well. So moving to the burbs was once affordable, and now people are looking for that affordability by moving to the Maritimes to Alberta, that's become the new suburbs. After the break, we'll hear from two people who migrated west for more affordable lifestyles. And we'll speak with one of our

producers about why she just might do the same thing. Our first guest is a friend of the pod, one of our producers, Emily. She and her husband are considering a move to Calgary. I spoke with her to find out how they're trying to make the tough decision to leave Toronto. Emily, welcome to Stress Test. I'm so happy to see you again. It's so good to see you again, too. So nice to be here on the mic. On the other side of the mic, right? So this is exciting. Now, how long have you lived in Toronto and what brought you here? I moved to Toronto in 2016, so seven years, and I moved here for a job. What kind of work do you and your husband do? So we're in this interesting position

where both of us used to go into the office five days a week and do the whole commuting thing. We live by transit because that was super important to us. And then the pandemic hit, and like many other people who worked in offices, we suddenly are able to work remotely. So I am a freelancer, and I work on great podcasts. He owns his own business, and he also can work from anywhere. And this is something that's really new for us. And that has definitely changed the equation of where we need to be. Your life has changed a little bit in other ways in recent years and months. Tell us a bit about that. So during the pandemic, we had our first kid, and then we were lucky to welcome our second child in November this past year. So we've gone from living in a one bedroom condo downtown Toronto, where we were walking distance to all the amazing things that the city has to offer,

to, you know, having two kids, we got a car, you know, the traditional millennials growing up kind of story, we still live in the inner city of Toronto, in a neighbourhood that's super walkable, but again, not the downtown lifestyle. We're more worried about where we're pushing the stroller these days. Now, tell me a little bit about why this conversation about moving has arisen. You know, with our jobs now not being tied to a location, we are in a very privileged, very fortunate position to think, OK, so where should we be? If we want to design sort of the best possible life that we can for our kids and we want to figure out how we want to raise our family and where we want to raise our family. And that's no longer tied to where our jobs physically are. So we start talking about what are our priorities?

Are our priorities a bigger house? Are our priorities being closer to nature, being closer to our family, having more pocket money to spend on vacations or extracurricular activities or going to the mountains, all of those things that can make a childhood. And so we're asking ourselves the question, where do we want to raise our kids and whether Toronto is going to be the best place to do that. And why Alberta? Because I'm from there. So a big draw is family. And then also, you know, it's like real estate porn. When you look at the MLS listings out there, the reality is that we could sell our half of a house that is 142 years old.

It has creaky floorboards. You turn the tap on in the bathroom and it wakes up the baby. We could sell this place and get an estate in Calgary. It's kind of nuts when you look at it that way. So there's that real estate temptation as well. Also, you know, your money does go further there. Income taxes are lower. It could be an incredible lifestyle. It doesn't seem crazy at all. It seems like it makes a lot of sense to trade in your biggest expense. When you think about taking mortgage payments and shaming those down and getting more for it, it seems like it makes space for all kinds of other things. Absolutely. And so we are asking ourselves the question, you know, why not? How will your housing situation change? And how will, without getting into the question, you know, why not? How will your housing situation change? And how

will without getting into the details, your mortgage situation change? So my house right now is like a traditional Toronto semi attached house, tall, skinny, pointed roof, with three bedrooms, two bathrooms, a tiny little backyard that is home to more skunks and rats than I can even hope to count. That's another pro for Alberta. There are no rats in Alberta. They have a rat patrol. We would get, you know, a big house with probably an attached garage, probably a bathroom on the main floor, which becomes really attractive when you're potty training a two-year-old. We could get office space, especially because we're both working from home. We'd probably sell it and buy something for a similar price.

So our mortgage would be about the same, but we'd get a lot more bang for our buck, essentially. Not to mention free babysitting from the grandparents. Free babysitting is where it's at. What do you feel you'd be giving up? The neighborhood. We have amazing neighbors here. We love being able to walk everywhere. We love being able to bike a lot in the summertime. And there are those active transportation opportunities in Calgary as well. But I guess we'd be giving up

more of the downtown lifestyle and training it for more of a suburbs lifestyle, which is a tale as old as time. If you do go, do you see it as a permanent decision? Or would you ever see yourself moving back? There are so many job opportunities in Toronto. I think more job opportunities than there are anywhere else in the country, particularly in our lines of work. And is it going to be permanent? I mean, who knows, right? That's what I keep telling myself. I'm like, if we don't like it, we can just leave. And what is the future of the workplace going to look like? At this point, we have still a lot of flexibility in terms of being able to work from various places. But as we know, we don't know what the future holds. Absolutely. So I think right now, you know, we have that

ability to work from anywhere. And we're trying to make practical decisions for our families. So Calgary is looking really tempting at this particular moment of our lives. When you start a family, affordability becomes an even bigger deal. You just have way more stuff to pay for. Expensive stuff like childcare, clothes and groceries. And young families are struggling in big cities. Statistics Canada reported a spike in families leaving Toronto last year. But there are lots of people without kids looking to move provinces for lower costs too. After the break, we'll hear from a Torontonian that went to Alberta for a vacation

in 2021 and still hasn't come back. My name is Claudia. I'm 30 years old and I live in Calgary, Alberta. Claudia grew up in Barrie, Ontario, about an hour north of Toronto. She moved to the big city to attend the University of Toronto and ended up staying for 10 years. During the pandemic, Claudia's job became fully remote and her fiance James, at the time a personal trainer, was mostly unable to work. So they decided to take an extended vacation to Alberta. So when we first came out here in January of 2021, it was always meant to be temporary. We were only going to come for a few months for the winter ski season. And about two months into

living temporarily in Calgary, we both decided that we wanted to stay here more permanently. Claudia says that a number of positives stood out about Calgary right away. One of the main ones actually was affordability, being able to potentially buy a house down the road. And just like the cost of living was a lot lower. I think another big thing was that the people were super friendly. There was a big community spirit. It's a very big city. It's over a million people. But the way that it's structured, all these neighborhoods have such a community

feel and aspect to them. So you also feel like you're living in a bit of a small town with all the big city benefits, like having a Costco and things like that. And then the third main reason was just being super close to nature. We're both avid skiers and avid hikers and campers and being able to do that really easily without having to live through the traffic on the 401 or the 400 and being out of the city in an hour and in the mountains was just, yeah, it sold us. When she was living in Toronto, Claudia paid what was considered a reasonable $1,200 a month to rent a small studio apartment downtown. But home ownership wasn't in the cards. You know, you always dream of owning a home. And then when you start crunching the numbers, you realize how far off that dream can actually be in Ontario. So I think my dream, you know, once I realized I wouldn't be able to afford anything in Toronto, I started looking more north of the city, looking in Barrie where I grew up and

where my parents lived. And when I realized that was way out of my budget, that's kind of when I stopped looking because the cheapest detached home in Barrie at the time that we bought this was like $700,000, $800,000. Plutty and James had only been renting in Calgary for about six months when they decided to purchase their first home. It's a one and a half story, 75-year-old house in Calgary's Capitol Hill neighborhood. So our house is two beds, one bath, like one and a half story. So the two bedrooms are upstairs. It's about a thousand square feet, But we have a really big yard. So we're on like a 40 by 120 foot lot. So we have like a really nice big yard, which was important for us. Like I'd like to have a smaller house in a bigger yard.

It's cozy, but honestly, for the two of us, it's perfect. It's like more than enough space. It's double than what I had in Toronto. So it's it's great. We call her Linda. She has her quirks, but she was $440,000. So I will take the quirks. The two are also very happy with their neighborhood. We live really close to this park called Confederation Park, which is like so lovely for walks with the dog and people cross country ski there. And there's like a little stream that runs through it. So it's nice to be able to get to do that. But we're also really close to downtown. We're like a five minute drive to downtown. We're really close to a sea train stop. So if we want to go down for Stampede or go down for a hockey game, we can walk to that and be downtown really quickly. And then we're just north of this area called Kensington, which similar to Toronto is like a very hipster, vegan, thrift store area. So we like to walk down there in the summer. That's about like a 15, 20 minute walk. So

we're really in like a prime, prime location in the city. I think anyway. Although things like housing and gas are significantly more affordable than Ontario, Claudia points out that not everything is cheaper in Alberta. I do think that there's some things that are more expensive. So example, groceries and food prices. When I go back home to Barrie and I go to the Farm Boy that's newly opened there, and I see the cost of berries and the cost of produce and the cost of meat, it's a lot cheaper than it is here in Alberta. And I think a lot of people think, oh, just everything is cheaper. But food and groceries and fresh produce, because Alberta doesn't really produce any of that, that is more expensive.

Claudia says there are a few downsides to living in Alberta at this stage of her life. One is that jobs are less abundant. I think job-wise, definitely Toronto has way more opportunities, at least for my career. But being able to work remotely has negated the need for that, has negated the need to do that. And now that I work remotely, I don't think I could ever really go back. So I know my fiancé has had a little bit of difficulty that I work remotely, I don't think I could ever really go back. So I know my fiance has had a little bit of difficulty finding permanent work here, permanent full-time work. He does seasonal contracts right now. So every summer he works for the city of Calgary and he's

hoping that turns into full-time, but he's been able to do that because I have like a super steady full-time job. So we've managed to make it work. The two also miss Toronto's vibrant music scene. So one of the things that I definitely miss about living in Toronto is concerts. A lot of artists and musicians bypass Calgary and bypass Edmonton and Winnipeg and all those places. So it's one of the things that we really miss

because we're big concert goers, but we've been able to kind of plug into the local music scene here by volunteering for Folk Fest and discovering new artists and things like that. But yeah, I mean, I'd love if big artists came to visit us, but maybe one day. Pilati is aware that people might have a specific stereotype about the Alberta lifestyle in mind. She admits she used to think the same way. When I lived in Toronto, I was like the number one Toronto fan. I was like, I'm never leaving Toronto. This is the best city in the world. Everywhere else sucks. Typical, I would be like,

oh, Alberta, everyone out there just wears cowboy hats and has cowboy boots and drives a giant truck and is super conservative and is all like oil and is you know super conservative and it's all like oil and gas but moving out here it hasn't been like that at all the only time I've seen people wear cowboy hats is during Stampede and that's all the tourists that come into the city that wear cowboy hats for two weeks the politics like Calgary is a very liberal city like the mayor that we have right now Jody Gondek like she's not conservative whatsoever can't speak for a premier like don't want to comment on that but but yeah there's such a diverse group of people that live here and it's not just any one stereotype

at all I mean like there are a lot of trucks here but there's also a lot of trucks in northern Ontario uh if you drive up there. So, yeah, I think my perspective's definitely shifted. So do Claudia and James see themselves as permanent Albertans? We talk about that a lot, actually. I like to joke that I'd move back to Ontario if I won the lottery or came upon a large endowment from a great grandmother somewhere. But even last night while I was talking to my fiance, we were in bed, and I was thinking, you know, even if I did make half a million dollars,

I feel like I would prefer living somewhere in the mountains. Like I just think Alberta and the people here and kind of the slower vibe, like you're not living a rat race. And you're so close to nature. It's just more relaxing for us. And so coming to that realization, literally last night, I was like, No, I don't I don't think we would ever move back. I'm lucky to be an only child. So you know, I don't have like a lot of family. I don't have a lot of siblings out there. It's just my parents. And I think the other great thing now about living in Calgary is that flights back home to Ontario are so cheap and so affordable. I think with all the new low cost airlines like Lynx and Swoop and Flair,

like we go back home and it's 100 or $200 round trip. But yeah, I feel like I've definitely found my place and found where we belong, which is nice. My name is Jacob. I'm 26 years old and I live in Calgary, Alberta. Jacob originally moved to Toronto from Ottawa in 2020. He relocated for work even though his job was almost entirely remote because of the pandemic. In a year and a half of being in Toronto, I came into the office maybe once or twice total. I mostly worked remotely. So I had the, in the spring, I decided to ask them if it was possible to work remotely permanently. And to their credit, they gave me the permission. He shared a downtown condo with a roommate. Even though his rent was

only $1,200 a month, a steal for that location, he didn't love living there. I really did not enjoy my time in Toronto, to be honest. Obviously, we were living in a relatively small apartment in the downtown core, so it was very crowded. But at the same time, because of the pandemic, it was hard to interact with other people and get out and do stuff. So I mostly explored the city by foot. But yeah, I just found that it was a bit too much for me. It was too noisy. It was too crowded.

And that's part of the reason I decided to move out west is because I was looking for something a bit simpler and with a slower pace of life. What attracted me to Alberta was that in 2021, with some friends, we went to Western Canada on a road trip. We went to Alberta and drove all the way to Vancouver, making some stops on the way. And I really fell in love with the region. I mean, I'm a big fan of the outdoors. So there's really nothing like being an hour away from the Rockies. There's a lot more greenery, I find. The weather is a bit milder.

I find it's less of a crowded place. And yeah, and obviously the cost of living was a big factor as well. I couldn't see myself living in Toronto any much longer at my current salary. The cost of life was expensive and especially housing was a big issue. I felt very lucky with my apartment. But I mean, the cost of housing here in Alberta is much cheaper and other things like gas and just the fact that we don't have any provincial tax makes a huge impact at the end of the day. Jacob's goals include home ownership. That wasn't feasible

for him in the short term if he stayed in Toronto. Like I mentioned, I wanted to buy a house at some point and in Ontario, I couldn't really see how that would be feasible in the next 10 years or so. But it was doable in Alberta. That's right. I bought a townhouse in the suburbs of Calgary. And I mean, the house has a backyard and it's what cost me $280,000, which seems coming from Ontario seems absolutely crazy to me to be able to buy a property with land, you know, for under $300,000. I live 200 meters from Fish Creek Provincial Park, which is this large urban park in Calgary, which I'll admit was one of the big appeals to choosing this specific property. I love being outdoors, so there's nothing like being 200 meters from a provincial park. In terms of its location, the city, it's about a 15, 20-minute drive to downtown Calgary. And it's a 10-minute walk from one of the light rail train stations. So I can either take my car to drive downtown or take transit.

So it's very accessible. It's two floors and a basement. It is technically a two-bedroom townhouse, but I'm using the second bedroom as my office and one bathroom. And it's the kind of place I feel is best suited for either a couple, single people, or a family with young kids. Like I couldn't see myself necessarily raising a family here, but I'm very comfortable living here as a single person.

I don't need much more space. It's perfectly suited for my needs. Jacob also considered buying a home in Hamilton and London before settling on Calgary. I determined that I would probably be able to get much more bang for my buck out here in Alberta, not just for housing, but also, like I mentioned, for taxes and gas and everything. Compared to Ontario, here there's no provincial tax on sales. So it's only 5% and it's entirely GST. So it does make a huge difference, especially when you're buying big ticket items like i waited

to be in alberta to buy all my furniture just because you're still saving eight percent at the end of the day it makes a huge impact and gas will obviously change depending like there are i am aware that different provinces have different programs going on right now. So it's not hard to compare more directly. But I generally find that gas is maybe 15, 20 cents cheaper here in Alberta compared to Ontario. And in terms of my income tax, I am technically registered as an employee in Alberta because you're taxing the province where the work is being done. But I haven't really found it had much of an impact on my take-home pay. There is probably a different tax rate, but I personally have not noticed it. We know Jacob's pro list, but what about the cons of his move? I think the only difference I find is that it's a less walkable and transit-friendly city. So

there were some times where I didn't have access to a car. And I found that getting around was a bit more difficult than in other Ontarian cities that I've lived in, because this is a very car-centric city. So you do need a vehicle to get around. But that's probably the only issue I've encountered, to be honest. Jacob doesn't plan to move back anytime soon. At this time, I believe for me, this is a long-term permanent move.

I really like life here. We've got technology nowadays, so it's easy to keep in touch with my family and friends back out east. And it's a four-hour flight to get back, so it's fairly easy to come. So yeah, for me, I want to stay in Alberta for the foreseeable future. People are finding it harder to get ahead financially in cities like Toronto and Vancouver. Don't get me wrong. These are great places. And a lot of the bustling energy depends on 20 and 30-somethings sticking around.

But the financial trade-off is getting harder to justify. The math just doesn't seem to work for many people. Roma, what are your takeaways from today's conversations? One, if you dream of owning a home, it makes financial sense to move somewhere more affordable. Saving for a down payment or paying rent in Toronto and Vancouver will dominate your finances for years at the expense of other goals like investing, traveling, saving for retirement, or having a family. Two, remote work has made leaving the city where you work possible, but smaller cities or towns could have more limited

options if you decide you want a new job or start moving up the ranks at your company. Three, before you uproot your life, spend some time in the city or town you're thinking of calling home. Check out the people, the housing, and the vibe. Make sure it's a place that suits more than just your budget. Can you see yourself building a life here? Thank you for listening to Stress Test. This show was produced by Kyle Fulton and Emily Jackson.

Our executive producer is Kieran Rana. Thank you to Jacob, Claudia, and Emily for sharing their stories. You can find Stress Test wherever you listen to podcasts. If you like this episode, please give us a five-star rating and share it with your friends. On the next episode of Stress Test, we talk taxes. Tax season can be daunting, but we don't want you to leave money on the table. Until then, find us at theglobeandmail.com and wherever you are in Canada.

Thanks for listening.