This Canadian city has been ranked the most expensive for international employees for the third straight year

Housing prices and shortages were key reasons driving the expenses of international employees, according to a new Mercer report. (Sora Shimazaki / Pexels.com)

As Canada grapples with a cost-of-living crisis and high housing costs, five cities have been ranked among the most expensive in the world for international workers.

The list ranks 226 cities in five continents from the most to the least expensive cities for workers sent to foreign countries for temporary international assignments.

Housing prices and shortages were key reasons driving their expenses, according to the report based on cost-of-living data published by U.S.-based consulting firm Mercer on Monday.

"Rising housing costs in many cities around the world have made it increasingly challenging for organizations to attract and retain top talent for international assignments," read Mercer’s 2024 Cost of Living City Ranking.

Toronto was the costliest city in Canada for international employees for the third straight year, according to the report.

Canada's largest city was the only ranked place in Canada to improve in affordability, down two spots to 92 globally, from 90 in 2023, according to the annual survey.

Vancouver was one of the Canadian cities listed in a worse position than last year.

The West Coast hub leaped 15 spots to No. 101, from 116 last year, and remained the second costliest city in Canada.

Montreal also got more expensive for foreign workers, ranking 118 this year, up 17 positions from 135 in 2023.

Ottawa was No. 126, up 11 spots from 137.

In addition, Calgary was 141 this year, jumping four spots from 145 last year.

How other global cities fared

The costliest cities for international workers on Mercer's 2024 list are Hong Kong (1), Singapore (2) and Zurich, Switzerland (3). The cities kept the same positions as last year.

The cities that ranked the lowest for living costs are Islamabad, Pakistan (224); Lagos, Nigeria (225); and Abuja, the capital city of Nigeria (226).

Why it's costly to live in these cities

Even with cost-of-living concerns, Canadian cities were nowhere near the top of the list. With its resilient economy, Canada still appeals to international workers, according to Vince Cordova, Mercer’s North American mobility advisory lead.

"We are seeing signs of stability and inflation is gradually decreasing, but organizations need to remain vigilant in planning effective compensation strategies for their globally distributed workforces," he said in the press release Monday.

Unlike U.S. cities, which all placed in the top 100, Canadian cities were relatively more affordable in North America for international workers.

In North America, New York City stayed the most expensive city at No. 7 overall. Other cities in the continent that ranked the highest include Nassau, Bahamas (9), Los Angeles (10), Honolulu (12) and San Francisco (13).

Numerous factors are behind the costs of living in cities, with key reasons including housing costs and housing shortages.

"Between 2023 and 2024, there was a lot of volatility in (housing costs) around the world, with housing rental prices varying significantly between cities," read the report.

Inflation and fluctuating exchange rates directly affect the pay and savings of international workers as well, according to the report. Increased economic and geopolitical volatility add to expenses such as housing, utilities, local taxes and education.

For higher ranking cities including Hong Kong, Singapore and Zurich, hot housing markets, high transportation costs and higher cost of goods and services contributed to making them the most expensive places to live.

Top 10 most- and least- expensive cities

The top 10 most expensive cities are as follows:

Hong Kong

Singapore

Zurich, Switzerland

Geneva, Switzerland

Basel, Switzerland

Bern, Switzerland

New York City

London, U.K.

Nassau, Bahamas

Los Angeles

The top 10 least expensive cities are:

Abuja, Nigeria

Lagos, Nigeria

Islamabad, Pakistan

Bishkek, Kyrgyzstan

Karachi, Pakistan

Blantyre, Malawi

Dushanbe, Tajikistan

Durban, South Africa

Windhoek, Namibia

Havana, Cuba

Methodology

The report evaluated comparative costs of more than 200 items in each city, from housing and transportation to food, clothing, household goods and entertainment. New York City was used as a base city and currency movements were measured against the U.S. dollar to ensure consistency in the comparisons, according to Mercer.

The figures were based on a survey conducted in March 2024 covering more than 400 cities. Data involved exchange rates from that period and from Mercer’s international basket of goods and services.