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Sign in You are logged in Switch accounts * R.J. Johnston Toronto Star / Toronto Star * Facebook * Twitter * WhatsApp * LinkedIn * SMS * Email * Print * Copy article link * Save [Save] biz newgrads leaving3 web * Facebook * Twitter * WhatsApp * LinkedIn * SMS * Email * Print * Copy article link * Save [Save] 1. Home 2. Business Business Thousands of young people are fleeing Toronto -- economists say the city will suffer because of it The affordability crisis is starting to trump job prospects for new graduates, experts say, which could hinder Toronto's economic development. By Clarrie Feinstein Business Reporter Oct 7, 2023 Saturday, October 7, 2023 8 min to read Article was updated Oct 7, 2023 * Facebook * Twitter * WhatsApp * LinkedIn * SMS * Email * Print * Copy article link * Save [Save] JOIN THE CONVERSATION * Facebook * Twitter * WhatsApp * LinkedIn * SMS * Email biz newgrads leaving3 web * Facebook * Twitter * WhatsApp * LinkedIn * SMS * Email * Print * Copy article link * Save [Save] Toronto is the only city Aidan Thompson has ever known. And soon he'll be forced to leave. As a third-year University of Toronto student studying international relations, Thompson is starting to think about his future and what it will look like after post-secondary education. He's come to realize starting his career in Toronto isn't viable -- it's just too expensive. x Already a Subscriber? Sign in You are logged in Switch accounts "It's depressing and demotivating to have to move out of the city that you know and love," he said. "It's the place that's shaped me and I've grown in. It's a little heartbreaking, but I know I'm not alone in this sentiment." ARTICLE CONTINUES BELOW ARTICLE CONTINUES BELOW Like Thompson, tens of thousands of students studying at Toronto universities hope to be gainfully employed at the end of their studies. But living in one of the most expensive cities in North America, it's causing some students to second guess whether Toronto is the right place for their next step. More than 40 per cent of Ontario post-secondary graduates are considering leaving the province due to the affordability crisis, according to a new survey from the Ontario Real Estate Association. Some economists believe the affordability crisis is now taking precedence over job prospects as to where new graduates decide to start their working life. That can have dire consequence for a pricey city like Toronto -- as new graduates establish their careers elsewhere, they're less likely to move back and actively contribute to the local economy. Thompson commutes to UofT's downtown campus from his family home in the Jane Street and Dundas Street West area every day. He says he's unable to fully enjoy city amenities due to expensive and insufficient transit, so he makes the most of student life and clubs -- especially as the vice-president at the University of Toronto Students' Union, where he engages with students to improve their university experience. thompson University of Toronto student Aidan Thompson grew up in Toronto but he doesn't see himself staying after graduating due to the city's affordability crisis. R.J. Johnston Toronto Star / Toronto Star "I want to help Toronto become the city I know it can be," Thompson said. "But it's stagnating and not keeping up with the demands, whether that's transportation, housing, or amenities. It feels like the city is refusing to grow. You go around the world to other cities and realize Toronto is losing its competitive edge." You might be interested in {{title}} {{type}} {{title}} * Dec 31, 1969 * Comments {{title}} {{type}} {{title}} * Dec 31, 1969 * Comments Through his work with the union, he's aware of how the student body feels about the livability of the city as rents skyrocket and the cost of living from groceries and transportation continue to climb. "Overwhelmingly, what I hear from students is that the cost of housing here is too high and getting an entry-level job in the city won't be able to accommodate those expenses," Thompson said. "So they're either going back to their hometown or moving out of the city all together. Very few are attached to the idea of staying in Toronto." ARTICLE CONTINUES BELOW Toronto's affordability crisis is taking a toll In September, the average rent for a one-bedroom unit in Toronto reached $2,620, up 10 per cent from a year ago. Groceries prices rose by 6.9 per cent in August year over year. The affordability crisis is causing young people to flee, said Marc Desormeaux, principal economist at Desjardins, adding it's vital Toronto appeals to young professionals as they're the most "entrepreneurial and productive" members of the workforce. "More and more young people are seeking opportunities in other provinces," he said. "They're seeking out other places that have an affordability advantage." According to OREA, student loan debt is one of the main barriers to home ownership. Once they graduate, students face a double burden of school debt and the city's high cost of living -- which is only getting worse. Akarshannoor Singh, a recent Seneca College graduate and vice-president of the Seneca Student Federation, said food insecurity and housing costs remain the biggest concerns for students. Every month, the federation provides 1,100 food hampers containing canned goods, rice, lentils and pasta. Before the pandemic, they wouldn't dish out all the hampers, but now there's a wait-list. And with minimal spots available for student housing, many are having to compete for market-rent homes, even though many students can only work a part-time job while studying. ARTICLE CONTINUES BELOW "The job market has taken a bit of a hit with the impending recession, so recent graduates are finding it hard to find work, and it's difficult to live within your means," Singh said. Singh has noticed a general sense of anxiety and hopelessness among students as the prospects of a comfortable life in Toronto feel further out of reach. Home ownership isn't even considered. "Students ask themselves, how can I afford rent? Groceries? They're not even thinking of owning a home one day," he said. By the numbers $3 billion The yearly lost economic output caused by the exodus of all workers from the GTA to other regions of the province. 30,000 The record number of new residents moving to the Maritime provinces from the rest of Canada in 2022. 78% The percentage of people leaving Ontario for other provinces who had resided in cities. 45,000 The number of people who left the Toronto census metropolitan area for other parts of Ontario in 2022. 24,000 The number of people who left Toronto for other parts of Canada in 2022. Source: Toronto Region Board of Trade/Conference Board of Canada/RBC Star graphic As of August, Torontonians need to earn an annual income of $233,300 to afford the average priced home of $1.1 million, according to Ratehub.ca. According to the 2021 census, the median total household income in Toronto was $84,000, an increase of about $18,000 since 2016. In Calgary, an annual income of $120,850 is needed to buy a $553,800 home, and in Winnipeg $81,000 is needed to buy a $345,700 home, as per Ratehub.ca's calculations. In Canada, buying a house is seen as a right and not a privilege, experts say, making home ownership a significant motivator for young professionals and families on where to settle down. ARTICLE CONTINUES BELOW "Higher salaries can be earned in Ontario and B.C. but it's often not enough to be able to keep up with the high cost of housing," Desormeaux said, noting there are pockets of Ontario that still have affordable housing. "Affordability of home ownership is often the top question young people have in mind." Young professionals moving farther away Historically, people have flocked to where the best jobs are, but now people are moving to where it's most affordable and it's shifting interprovincial migrations patterns, experts say. More people are leaving Ontario and B.C. for Alberta, the Maritimes, and Prairies, especially those aged 15 to 34. And the rise of remote work is giving people the freedom to live anywhere. "Record numbers of people are leaving Toronto for other provinces, which is really dominated by new graduates and folks without kids," said Mike Moffatt, assistant professor Western University's Ivey Business School. "Many are getting, and looking, for their first professional job out of province." A March 2023 report from the Conference Board of Canada, said roughly 45,000 people left the Toronto census metropolitan area for other parts of Ontario in 2022, with another 24,000 leaving for other parts of Canada. In Ontario, 113,226 people left in 2022, while 74,410 people moved into the province, resulting in a net loss of almost 38,900 people -- the highest net loss since 1972, according to Statistics Canada. Experts say the influx of newcomers is keeping population levels afloat in the province and Toronto, and without it the economic viability of both would be in greater jeopardy. ARTICLE CONTINUES BELOW While it's not unusual for young families to move to the suburbs or smaller commuter towns, Moffatt said, moving out of province is a newer trend. As many as 30,000 B.C. and Ontario residents moved to Alberta last year. In total, the Maritime provinces welcomed a record 30,000 new residents from all of Canada in 2022, with a 5.4 per cent increase and 4.5 per cent increase in Moncton and Halifax, respectively -- the fastest growing cities in Canada by population, according to an economics report from the Royal Bank of Canada. And even though Toronto continues to have a wealth of jobs and produces more competitive salaries, the income still can't allow people to own a home without some family help. "Younger people are starting to move to Edmonton, Winnipeg or St. John's where they might get paid less but the cost of living is so much lower they're willing to make the tradeoff," he said. Earlier this year, Alberta launched the campaign "Alberta is Calling" to attract skilled workers from Ontario, hoping to fill its labour shortages. The campaign boasts of Alberta's advantages saying the province has "the highest weekly earnings and lowest taxes in Canada," an "excellent quality of life and affordable lifestyle," as well as "access to world-famous mountains and parks for year-round hiking, skiing, biking, and more than 300 days of sunshine per year." "They are advertising this to young people, and I'd suggest it's working," Moffatt said, adding that when young professionals start their careers outside of Toronto, it's harder to get them to return, which costs the city talent and takes an economic toll as well. Toronto's uncertain economic future ARTICLE CONTINUES BELOW While Alberta and Atlantic Canada are attracting more young workers, Ontario and specifically Toronto remains the city to be in for many industries -- specifically for film, tech, and financial services. Experts agree Toronto is a world-class metropolitan city that attracts international talent and competes with some of the top cities globally. But the attractiveness is starting to fray, said Giles Gherson, president and CEO of the Toronto Region Board of Trade, and it can have a "real impact" on the economy. The economic loss from workers leaving the GTA is around $3.05 billion a year, he added. "It's not broken but we need to repair Toronto's allure," he said. "We're quite concerned about the exodus of millennials leaving the GTA because they're established members of the workforce." When looking to Toronto's future, millennials and Gen Z are the generations the city needs to ensure job sectors can attract a wealth of knowledge and diverse perspectives, he added. Agatha Nguyen, a recent graduate of mechanical engineering, found a job in Windsor, Ont. Unable to find work in the GTA, where she grew up, Nguyen said it's been difficult to be far from family and friends. But she prefers her life in the border city. Her rent is $620 per month for a shared living space with two other roommates -- significantly lower than the average $1,300 rent for a shared living space in Toronto. She's been able to adequately save money and open an RRSP account. "I much prefer my life in Windsor. My cost of living is cheaper. I get groceries and gas across the border where I pay 20 to 30 per cent less than in Toronto," she said. "After COVID things have taken a turn for the worse in Toronto. Paying $2,500 for rent isn't worth it at all. I wouldn't be able to afford food or have fun in it. What's the point of living in a city like Toronto if most of your income goes toward rent?" It's this question that Gherson is most concerned about -- if Toronto becomes too expensive will the cultural amenities even matter? Toronto, which used to be an affordable city, meant people could enjoy the entertainment and vibrant cultural life not offered elsewhere in Canada, he said. Related Stories Toronto real estate has suddenly shifted to an official buyers' market -- will a price drop be next? Rising mortgage rates have hit Canadians hard. Experts say they're becoming a drain on the economy too Investors took a bigger chunk of housing market during the pandemic, data shows "But if you can't enjoy it, what's the point in staying?" he said, adding Toronto has been a magnet for young people for generations, offering exciting opportunities economically and culturally. "Toronto is our national hub city. It needs to retain the next generation and livability." What can Toronto do to retain talent? UofT's Thompson said Toronto would need better transit, affordable housing and higher paying jobs in order for him to remain in the city. While those are lofty needs, it's not out of the realm of possibility for the city, experts say. Building more housing in Toronto is imperative, experts add, but is a lengthy process -- Ontario is aiming to build 1.5 million homes in the next decade, but isn't meeting its 150,000 yearly target. Shorter term, experts the Star spoke to said Ontario needs to reinstate stricter rent control regulations, build more purpose-built rentals, and post-secondary institutions can buy existing for-profit apartments and convert them into nonmarket buildings with lower rent. "We can't stress enough how much more housing supply we need to build, and different rental options we need to provide in the GTA," said Desjardins' Desormeaux. "It needs to be affordable housing that people can readily move into." Having an integrated transit system with the TTC and GO is also needed to ensure people can move around the GTA easily and commute into work seamlessly, Gherson said. For example, if people use the GO train and then need to hop on the TTC they should only pay fare once, not twice. In 2024, transit riders will be able to just pay GO fare if using both systems. "We need to make it easy for people to commute into the city," he said, adding the poor quality transit also makes people less inclined to enjoy Toronto's entertainment scene and night life. More competitive salaries are also need to attract young professionals, experts say. According to the Toronto Region Board of Trade, the high cost of living means employees have higher wage expectations putting pressure on workplaces. Every year, Toronto employers pay more than $2 billion to keep up with wage demands, which still isn't enough to compensate workers. After he graduates, Thompson said he would like to work in the non-profit sector, but starting salaries for community-based organizations are around $35,000 to $50,000 -- not nearly enough to be comfortable in the city. He said not only is he, and many other young people, burdened with insufficient finances to live in Toronto, but they're also paying a mental cost. "Finances cause stress and when you're burdened with this incredible debt or daunting rental market, there's a mental burden there as well," Thompson said. "I love Toronto to pieces," he said. "I would do anything to stay. I just want it to make space for people like me, and the students I advocate for." Clarrie Feinstein Clarrie Feinstein is a Toronto-based business reporter for the Star. Reach Clarrie via email: clarriefeinstein@torstar.ca. ADVERTISEMENT * Facebook * Twitter * WhatsApp * LinkedIn * SMS * Email * Print * Copy article link * Save [Save] Report an error Journalistic Standards About The Star JOIN THE CONVERSATION Anyone can read Conversations, but to contribute, you should be a registered Torstar account holder. If you do not yet have a Torstar account, you can create one now (it is free). Sign In Register To join the conversation set a first and last name in your user profile. 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