Canada is so expensive that some Ukrainian immigrants are leaving
Bloomberg November 17, 2023
Not long after Russia began bombing Ukraine, Oleksii Martynenko packed his bags and fled Kremenchuk, a once-tranquil but now war-torn city roughly 190 miles from Kyiv. He moved to Stockholm and took a job as a line cook. One year later, as his work visa approached expiry, he relocated to Canada’s largest city.
The continental change of scenery proved challenging for the Ukrainian immigrant. It took Martynenko about two months to find a comparable job in Toronto’s bustling downtown, about an hour’s commute from his apartment in the city’s suburbs. It wasn’t enough to pay the bills, so he soon took a second job, also as a line cook, and now works seven days a week in fast-paced kitchens.
The strenuous work and high cost of living has taken its toll. Martynenko, 44, is now planning a return to Sweden. His monthly expenses in Toronto include roughly C$100 for a phone plan ($73) , C$150 for public transit, C$400 for groceries, and C$1,000 for a room in a rooming house, where the kitchen and bathroom are shared among four tenants. Any money left over is sent back to family still in Ukraine. At least in Stockholm he earned enough to have savings, he said.
“I’m tired all the time now,” Martynenko said in an interview. “I want to go back to Europe because it’s such a difficult life in Canada.”
Canada has long been a choice destination for newcomers seeking a better life in a prosperous nation. Nearly a quarter of all Canadians are immigrants and the country has welcomed nearly 200,000 Ukrainians since the war’s outset. But the daily grind of life in Canada’s busiest metropolises - not just Toronto but also Vancouver, Montreal and Calgary - along with soaring costs is making it increasingly hard to get by.
Social service organizations have warned that the country’s most vulnerable citizens - often newcomers - are affected most by higher prices, especially in housing. Andrei Zavialov, a settlement worker with Ukrainian Canadian Social Services Toronto, said he knows of at least 15 Ukrainians who have returned to their home country from the Greater Toronto Area since the war broke out. There isn’t one predominant reason for leaving, he said, but expenses are among the most cited factors.
“An individual becomes unable to find money, but they need to pay for very high rent, groceries,” said Zavialov. “And such expenses hit an immigrant’s pocket strongly. No job, no money, they return to Ukraine where everything is familiar.”
Anecdotal stories like these are supported by new research suggesting that more newcomers have chosen to leave Canada in recent years as worsening housing affordability, a strained health-care system, and underemployment spark disillusionment with the opportunities the country offers.
An acceleration of that trend would undermine Prime Minister Justin Trudeau’s ambitious plans to stave off economic backsliding through relaxed immigration policies. Like many developed countries, Canada’s birthrate is declining and the population would shrink were it not for new arrivals. Real gross domestic product per capita has stagnated over the past decade, while soaring home prices have far outpaced disposable income.
The Trudeau government’s solution is a target of roughly half a million new permanent residents a year, on top of a recent boom in arrivals that pushed Canada’s annual population growth rate to 2.7% in 2022, the fastest pace among advanced economies.
The challenge now is retaining them. Newcomers have to navigate a web of problems, starting with housing costs. Even smaller Canadian cities are facing tight rental supply as higher interest rates have discouraged would-be buyers, creating fierce competition for rental units. The average cost of rent in Canada hit a record C$2,149 in September, up more than 11% from a year prior, according to research firm Urbanation. In Toronto, it was C$2,614, which represents almost the entire pretax income of a person working full-time for minimum wage.
Other costs are also rising. While inflation is decelerating, it’s still running at 3.8%, “much too high for comfort,” according Benjamin Reitzes, a rates and macro strategist at the Bank of Montreal. Grocery costs increased 5.8% annually in September, while gas prices jumped 7.5%.
To be sure, many newcomers are keen to stay in the country. Zavialov said most Ukrainian newcomers he’s interacted with have expressed strong admiration for Canada - its diverse population, socialized health care system and fraying but still-strong social net. The decision whether to return to Ukraine or stay in Canada is also inspired by factors beyond expenses - proximity to war, safety, or a sense of patriotic duty.
A combination of those considerations prompted Anna-Maria Lyakhovetska to plan a return to Ukraine as soon as it’s safe. The 17-year-old moved to Germany after her father died in the war, and then relocated to Canada, arriving in Toronto just seven months ago. Now she wants to go back, in part to escape the hurdles of life in a new country and in part to aid the war effort. Russia’s invasion, she said, encouraged her to pursue a career in political organizing.
“It’s expensive living here,” she said. “But I also want to go back to help my country.”
The bulk of Canada’s Ukrainian immigrant intake is clustered in Ontario, the country’s most populous province, according social services group Operation Ukrainian Safe Haven. Based on financial assistance data, 40% of recent Ukrainian immigrants have settled in Ontario while 21.4% landed in Alberta and 10.3% went to Manitoba.
Oleksandr Halyk, 50, arrived in Canada with his 25-year-old son in March, directly from Ukraine. An engineer back home, he took a job as a cabinet maker in north Toronto because he lacked a convertible degree. His son, meanwhile, found a better paying job at an airport.
“For my son, I think that he will stay here for a long time and probably build his future,” Halyk said. “But for me, to tell the truth, a life in Canada is much more expensive than in Ukraine, or in Europe. There, I have experience, and I can find work with a good salary.”
With assistance from Randy Thanthong-Knight.
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