Canada's Gen Z can't live on less than $100,000 a year they say

The cost of living in Canada has been slowly growing out of control for the better part of a decade and now the country's most important generation says they can't live comfortably on anything less than six figures.

We know young Canadians are suffering because, in April 2023, a group of pollsters from the market research company Abacus Data was interested in figuring out how the modern realities of life in Canada had affected the perceptions of what income was needed to be happy. 

“The last year has shown that living costs can be high and unpredictable,” wrote Abacus Data’s Oksana Kishchuk in a blog post about the market research company’s findings at the time. 

Rapid rises in housing prices coupled with the ever-growing cost of everyday goods and lack of real wage growth got the researchers interested in what Canadians thought they needed in order to live comfortably, and the answer varied greatly by age. 

Abacus Data surveyed 1750 Canadians from four age cohorts between April 28 and May 4th asking: "How much income do people believe they need to live comfortably? Please enter the amount you would need to earn before taxes,” and the results were worrying.

Overall, the average Canadian said that they needed to earn a before-tax income of $79,280 to live a comfortable life in Canada, and that number rose to $85,445 for those with a partner while people living on their own said they needed $72,919. 

Estimates for the amount of income needed were lowest in the province of Quebec and highest in the city of Toronto according to Kishchuk, who also noted people with children said they needed at least $30,000 more than those who did not have to support kids. 

Interestingly, the baby boomer generation said they needed a significantly lower amount of annual income than all of Canada’s younger generations with the average boomer reporting that they required $63,753 a year to live a comfortable life in Canada.

Generation X and Millennials fell into a similar category of income requirement with the former saying they needed $84,700 annually to live comfortably in the country while the latter reported that $87,386 would allow them to live a comfortable life in Canada. 

Generation Z needed the most amount of annual income and the average young Gen Zer said they thought they needed $100,953, a number that revealed the stark contrast of generational inequality in Canada according to The Globe and Mail’s Rob Carrick. 

“Average income for this demographic is about $45,000, a gap that demands a reality check. Not for Gen Z, though,” Carrick wrote, adding Canada's Gen Z had sadly underestimated just how much would be needed to buy a home, start a family, and save for their future. 

“The reality check is for anyone who dismisses Gen Z’s idea of financial comfort as a sign of entitlement or naiveté. Young people know what they’re up against trying to afford adulthood. Do the rest of us?” Carrick added. 

Carrick pointed out that housing costs were down from their peak levels at the time but also noted that the market was heating back up. Canadians who didn’t own property were faced with purchasing at high prices with higher mortgage costs compared to older generations. 

Renting was equally as unaffordable for some according to Carrick, who said the cost of monthly rents had jumped up 20 percent since their pandemic lows. This figure was backed up by data from Rentals.ca at the time, which noted in a May 2023 report that the average rent in Canada had reached $2002,00.

If you’re wondering how Generation Z was supposed to absorb that cost while saving for a house then you’re not alone. Rob Carrick said exactly that in his article and then added that the situation wouldn’t be so bad if wages had kept up with the rising cost of living. 

According to Talent.com the average starting salary in Canada was $41,603, a far cry from the $100,593 average Gen Z thought they needed to live comfortably in Canada.

According to a May 2023 report from Fortune, Gen Z in the United States said they needed an average annual salary of $121,533 in USD to feel like they had made it based on data collected by the invoicing software firm Skynova. 

Even accounting for the April 28th exchange rate of 1.28 at the time Abacus Data began their survey, Canada’s Generation Z was only asking for a pittance compared to their American counterparts who said they would need $155,615 after the exchange rate.