As the cost of living in Toronto continues to rise, many residents are wondering what they can expect over the next year.
This debt relief company based in Toronto has provided a breakdown of some of the essential items that are likely to cost more - or less - in 2023, and why rising costs will be a challenge for so many people who call the city home.
Food prices
According to Canada’s Food Price Report 2023, food prices in Toronto are expected to rise by as much as 7% in 2023 – a significant increase for Torontonians’ and their pocketbooks.
The average family of four can expect to spend nearly $16,300 per year on food over the course of 2023, an increase of over $1,000 from last year’s annual household food basket cost of around $15,200.
There are several factors fueling the rising cost of groceries, from the ongoing Ukraine war sparking global uncertainty across economies, to supply chain issues preventing countries from easily obtaining staples like wheat and sunflower oil. Global climate change is also leading to reduced yields in certain areas.
Given none of these problems looked likely to be solved in the short-term, it seems like higher food prices are here to stay in 2023.
Transportation costs
Given that there are nearly 7 million people in the Greater Toronto Area, Transportation is an essential part of everyday life in Toronto, and the cost of transportation is a significant contributor to the overall cost of living in the city.
In 2023, it is predicted that the cost of transportation in Toronto will rise, with proposed fare hikes for the Toronto Transit Commission (TTC) and an expected increase in gas prices.
The TTC, which is the primary public transit system in Toronto, provides transportation services to over 1.7 million people daily. The TTC is funded by a combination of fares, subsidies, and taxes.
In 2023, the TTC has proposed a fare increase of around 10 cents for single cash and PRESTO rides.
The proposed fare hike will be used to cover operating costs, fund capital projects, and help the TTC adapt to evolving passenger needs in the wake of the pandemic - however it’s also likely to make getting around the city more difficult for those who rely on public transport.
Gas prices
In addition to the proposed transport fare increase, the cost of gasoline is also expected to rise in 2023. Despite the cost of gas in Toronto having fallen since the end of 2022, this leveling out is expected to be temporary, with gas prices projected to begin rising again soon.
Rising gas prices in Canada have been driven by a combination of global factors: Sanctions on Russian oil due to the war in Ukraine, COVID lockdowns in China, and extreme weather conditions over the winter increasing demand for gas to power heating systems, in turn pushing up global prices.
All of these factors have contributed to rising gas prices that Canadians are now feeling at the pump, with industry experts warning that prices may rise to as much as $2 a litre on average in Ontario, a level that hasn’t been seen since October 2022.
For many travelers and commuters in Toronto this could mean planning ahead for a hefty increase in what they pay to fill up the tank, making commuting more challenging and more expensive.
Housing costs
In previous years, one of the most pressing issues in Toronto has been the rising cost of real estate.
In fact, real estate is set to come down in price this year. House prices are predicted to fall anywhere from 20-25% in the first quarter of 2023, as the market recalibrates itself after rapid growth throughout the previous few years.
This is not the case for renters, however; despite a dip in house prices, rent is still predicted to keep its steady ascent.
According to property website Zumper, the average rental price for a one-bedroom apartment in Toronto is $2,350 as of 2023; an increase of 24% compared to the previous year.
Rent levels will be a key challenge for many city dwellers, who must now brace themselves for increasing overhead costs while juggling financial pressures like inflation and higher prices for food and other essentials.
Summary
In summary, the cost of living in Toronto is predicted to rise in 2023 due to various factors, including food, housing, and transportation costs. These factors are not unique to Toronto, but they will have a significant impact in a city where the cost of living was already comparatively high.
The rising cost of living in Toronto will disproportionately affect low-income households. These households typically spend a larger portion of their income on basic necessities such as housing and food, leaving them with less disposable income to cover other expenses such as healthcare, education, and recreation.
As the cost of basic necessities continues to rise, low-income households may be forced to cut back on these other expenses, reducing their quality of life.
This rising cost of living in Toronto may also lead to an increase in debt levels. As people struggle to afford basic necessities, they may turn to credit cards, loans, and other forms of borrowing to make ends meet. This can lead to a cycle of debt that is difficult to break, as the high cost of borrowing makes it even more difficult to pay off existing debts.
With the predicted increase in the cost of living, people living in Toronto will need to find ways to adjust their budgets and find ways to cut costs to maintain their standard of living.
