Several times a month I’m asked by individuals for advice on buying a house in Ottawa, Ontario or Gatineau, Quebec. While I will refrain from commenting on the personal elements (e.g. politics, etc.) as they are subjective, I’ve put together a financial analysis for those who wish to consider.
In conclusion, unless an individual earns more than $150,000 / year, from a financial perspective, it’s still significantly financially beneficial to live in Gatineau, Quebec vs. Ottawa, Ontario.
Here’s the facts. For this assessment we’ll use the salary of $75,000… (reference for calculations: http://bit.ly/RLVw04)
Ontario income tax
Total paid (assuming no additional deductions e.g. spouse, school, etc.*): $16,561
Quebec income tax
Total paid (assuming no additional deductions e.g. spouse, school, etc.*): $20,893
Quebec residents who earn $75,000 annually will pay $4,332 more in taxes ($20,893 minus $16,561) than an Ontario resident. Monthly additional expense amounts to $361.
But this is only one aspect of an individual’s expenses. If we look at other key expenditures, it’s vital to realize that Gatineau offers significantly lower real estate expenses. Let’s take a peek…(reference for research: residential freehold houses, detatched with 2+ bedrooms, 1.5+ bathrooms in Gatineau, Quebec & surrounding areas: http://bit.ly/1e8vwUy)
Similar house profiles in Ottawa, Ontario are anywhere from 50-100% more expensive than those in Gatineau and surrounding areas on the Quebec side. This quickly results in dramatic savings. Let’s assess a real life example (you can take a few moments and compare your own situation if you desire, it’ll be more interesting for you if you do). For this assessment we’ll use a homeowner who owns a single family home currently valued at $300,000 (purchased a few years ago for $225,000). Their house is not small – it’s 2,800 sq. feet with 4 bedrooms, 2 bathrooms, 2 dining rooms and 2 living rooms, a pool, hot tub, and boasts a half-acre lot in the middle of the city. Even with the additional amount spent on income taxes, this individual’s mortgage is only $900 a month including property taxes. Their drive to the office is 15 minutes each day, 30 minutes on a bad day (reference: Google Maps on a Thursday at 8AM). This same house profile (if you could find it in Ottawa) would sell for $650,000+, and their mortgage payments would be more than double with the interest expenses. Furthermore to find a house of similar profile they would need to live outside the Ottawa area and their drive would be more than 15-30 minutes each day. Each year living in Ottawa would systematically cost them more than $10,000+ additional in real estate expenses. This is an eye opener!
What about other considerations?
Quebec offers significantly lower expenses in child care (daycare), write-offs for dependants, lower property taxes, almost half-price electricity bills, no water bills and subsidized medical coverage for individuals who don’t have their own plans. Quebec also has significantly lower priced car insurance (e.g. saving thousands) as a result of their no fault tolerance insurance plans. Let’s take a look at the other important considerations:
Commute time
From northern Aylmer to Ottawa west is 18 minutes (http://i57.tinypic.com/2hgzhn8.jpg)
From northern Aylmer to downtown Ottawa is 15 minutes; or 26 minutes with rush hour traffic at 8AM on a weekday (http://i60.tinypic.com/2e33a6t.jpg)
Ease of resale
Let’s look at Canadian Real Estate Association’s latest quarterly statistics for resale statistics from a percentage basis (e.g. # of homes listed vs # of homes sold, http://creastats.crea.ca/natl/index.htm). Resale percentages are nearly identical for both Gatineau and Ottawa.
House prices
Houses in Aylmer & compared to houses in Orleans
Average resell price (Q4 of 2013) is $410,600 in Orleans; average resell price is $267,800 in Gatineau. This is a 53% difference. I’ve emailed Canadian Real Estate Investment Wealth to ask permission to scan their magazine and post my source. If I get written permission I will post it. Alternately you can verify these numbers by picking up a copy of their magazine at Chapters.
Houses in Aylmer & compared to houses in Kanata
Average resell price (Q4 of 2013) is $387,500 in Kanata; average resell price is $267,800 in Gatineau. This is a 44.6% difference. I’ve emailed Canadian Real Estate Investment Wealth to ask permission to scan their magazine and post my source. If I get written permission I will post it in the coming days. If you wish you can pick up a copy of their magazine at Chapters.
Moving costs
Moving costs are similar. In Quebec there are welcome taxes, these are the same as land transfer taxes in Ontario (just named differently). CMHC is taxable in both provinces as well (see here: http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_003.cfm).
Car insurance costs
I pay $230 for my license plate and $400 for car insurance annually in Quebec. When I was considering moving to Ontario my plate costs were negligable but my insurance costs would have been $1,300 annually. This would more than double my car insurance costs in my case, even after factoring in the cost of plates in Quebec.
Electricity costs
In Quebec electricity prices are 8.55 cents per KWH including both non-peak and peak. In Ontario, prices are an average of 12.3 cents (43.8% higher). Calculations are available here to determine the averages (https://www.hydroottawa.com/residential/rates-and-conditions/) and Ontario rates are about to rise even higher (http://www.cbc.ca/news/canada/toronto/electricity-rates-going-up-in-ontario-may-1-1.2612844). In addition to this, many Ottawa residents have reported that the are also charged an additional “electricity delivery fee” which increases the cost even further.
Hospitals
Quebec residents are welcome in all Ontario hospitals and vice-versa. As a father who has a son with Autism I leverage the expertise of both provinces. While there are amazing specialists in Quebec, I also have some specialists in Ontario that I leverage as well. When I had a medical issue last year with my back (awaiting surgery), I received medical services both in Ottawa and Orleans.
Education quality & pricing
Post-secondary educational pricing is significantly less expensive in Quebec. It’s well known that Quebec subsidizes their education and the cost is < 25% of Ontario’s. As for quality, this is subjective and depends on the school, program, etc. Grade school math for instance is more advanced in Quebec and my friend’s children struggle with Quebec mathematics after having moved from Ontario; whereas there are other educational benefits in Ontario as well. Since this is subjective, I’ll leave this to the reader’s opinions, as I have no interest in being pulled into a subjective debate that has no clear concrete answer.
Tax deductions for higher-income earners
Let’s assume a $150,000 income. Reference for calculations http://bit.ly/RLVw04
Ontario: $48,556 Quebec: $55,627
In this instance a Quebec resident with a salary of $150,000 will pay $7,071 more in taxes (no other assumptions or calculations included). This is approximately the salary required to start saving money by living in Ontario vs. Quebec with all other standard elements considered (real estate, etc.) if you are single and have no children.
Daycare pricing
Even without subsidization daily cost per child averages $25 / day on the Quebec side. This is still significantly cheaper than the average $45 / day in Ontario for child care. With subsidization the cost drops to $7 / day. Our family earns a household income of $125,000 per year and we qualify for subsidization.
Conclusion
In almost all scenarios, living in Gatineau is significantly more financially beneficial than living in Ottawa. Regardless, financial reasoning isn’t the only reason, but, it is a significant one. Everyone’s situations are unique and individuals must make decisions based upon what’s best for them.
All I ask is that you take the time to compare apples to apples. Never believe one-liners that you read in the media or one-off statements that you hear someone say. Take the time to do your own assessment and if you make the decision to spend more to live in Ottawa, do it for reasons that best suit your needs. Don’t do it because you’ve tricked yourself into believing that you’re doing it to save money, because chances are you are not.
I took the time to prepare this blog because there are too many individuals who hear something and assume it to be fact. Not looking at the entire picture and making an informed decision can be a mistake and could cost years of consequence. If I assumed that everything I heard was fact then I wouldn’t have started my own businesses, build my own real estate investment portfolio and transformed myself from someone who would have never been able to afford retirement into someone who will be able to retire in less than a decade if I wish to do so.
Take the time to do your own assessments and for your own benefit, make sure you are comparing apples to apples, most of all – good luck with your home purchase and congratulations!
–
Brent Mondoux
Founding Partner, Amplified Investments
brent@amplifiedinvestments.com
Amplify Your Investments and Achieve Financial Freedom 
100% less expensive houses? That is free right?
Fixed typo, thanks for bringing to my attention (I meant 50-100% more expensive; not the other way around)
Brent, as you say, no water tax in Qc, but also the electricity rates are so much lower! over a year, it sure make a big difference if one use electricity to heat and cool a house of the same seize in ON vs QC.
Is it possible that areas with more affordable housing attract people with lower incomes, and therefore people of a different socioeconomic ‘status’ if you will? If so, would that imply slightly different lifestyles, habits and behaviors among neighbours and in the community in general? I’m not saying that this is fact, and certainly not implying one ‘status’ is better than another (I grew up in a low income French family and believe the culture is rich and very big on morals and respect- something I hope to instill in my kids), but rather that simply there is a difference and a preference among many people. I think this has a thing or two to do with the demand and subsequent values.
Finally …way bigger and more hypothetical question…what do you think will happen to values if Quebec separates? MANY of the people in Aylmer live there because they work on the Ontario side. I imagine a huge exodus and drop in values. Subsequently, an increase in prices downtown and surrounding areas. Could be interesting!
Love the blog btw.
Thanks for sharing.
Hey Marc, great input. While it is possible for different socioeconomic status, it’s not obvious in the neighborhoods of Aylmer whereby I invest in real estate. Some of my neighbors run multi-million dollar companies, others live comfortably off of $60-75K incomes, and finally there are even low-income retirees in the immediate vicinity as well. Quite an eclectic and non-pattern set of different socioeconomic statuses
As for the separation, from a political standpoint it is extremely unlikely to occur, Quebec separation interest has been on the steady decline for decades. While the “passionate separatists” make a lot of noise, they are far and few between. In the very unlikely situation it separate the values will be volatile for 3-6 months and then stabilize where they are now as the values are already adjusted based upon the emotional perception of those risks (like the stock market, short term real estate price volatility is impacted by emotion moreso than reason; however longer term the values always follow a much more logical pattern)
Very thought inducing feedback; thank you.
Awesome. Thanks!
Great point, definitely less expensive electricity. I could dig all day into many other points, Ontario has some and Quebec has some, but I chose to focus on the major elements that most heavily impact most individuals rather than framing every single point in order to keep the write up a quick read. Thanks for adding this point 🙂
You only accounted for the kWh cost in your electricity rates. My “delivery” charges in ontario have dwarfed the actual electricity cost for over a year now. This tips the scales even further.
Yes delivery charges tips the scale even further. In Ontario these delivery charges are exponentially higher than in Quebec.
Hi Brent,
Thank you for stirring a discussion about this.
We currently do live and own a small semi in Aylmer and retain an investment downtown Condo in Ottawa.
My wife and I are both employed in Ottawa earning an average household income of $175k – $200 k a year. We currently do not have any kids, but we do plan on starting a family in the next 2 years.
As we are In the pursuit of upgrading our life, We find ourselves at Crossroads. What you have illustrated above might be true in terms of financial expenses and saving, My struggle lies with the aftermarket value of ones investment (Primary home) in Quebec and the ease / demand of the sale.
My understanding of the Aylmer market with homes valued over $400 k seem to show a longer presence on the real estate market. The QUICK resale of more expensive homes in established neighborhoods in Aylmer are few and far apart. Where I am going with this is; If I were to purchase a home in Ottawa @ $400k VS a home in Aylmer @ $400k and I placed a 10-15 year time frame on the home – The market and previous statistics show that the value of the 400k investment in the home far exceeds the value on the Quebec side. In some cases as much as doubling and tripling.
Where this comes into play : Retirement or future financial investments.
Equity gained is equity earned
If one is to purchase a home on the quebec side at a lower dollar value and never consider moving into another home for the rest of their life, then Quebec makes more financial sense.
id love to know your thoughts on this.
In order to answer this question I dug into the numbers published by independent assessors who work for Canadian Real Estate Wealth investment magazine. You can pick up a copy at most Chapters in town.
Looking at the last few years of growth in their property price guides, Ottawa has achieved an average selling price increases of 3.98% per year in the last 3 years; while Gatineau’s has achieved an average selling price increase of 3.71% per year in the last 3 years. The differences are not significant enough to be noteworthy, especially if you take those savings and invest them in the stock market which has experienced a historical average return of 10.1% (7.8% adjusted for inflation) over the last 50 years.
In addition consider the cost of selling and buying a home in Ontario, your immediate costs include legal fees, land transfer expenses, moving expenses, financing costs and the fact that you start a new mortgage term whereby the majority of the early payments are interest only. This is a significant consideration. Purchasing a $400K home would result in the following initial fees:
Land transfer tax: $5,100.00
Legal fees: $2,400.00
Moving expenses: $2,400.00
Initial repairs: $2,000.00
Financing costs: (thousands to tens of thousands)
Real estate agent fees (selling your home): $16,000.00
CMHC (if you don’t put 20% down): $11,115.00
If you sell your house with the help of a professional real estate agent and don’t put 20% down on your next purchase you are looking at an expense of $39,015 (this excludes your down payment!). Even if you do not use an agent and put 20% down to avoid the CMHC fees you are still looking at $11,900 in expenses right out of the gate.
In terms of your salaries, because they are on the higher end, you may be looking at a different story from the taxation perspective and should go through the calculations to determine what is your best decision. Please note that these calculations should include the fact that you want to start a family later, and also include all of your personal expenses to assess the situation. You can get the taxation formulas here to perform your own assessment as it will be vital in making an informed decision: http://bit.ly/1gu5KXT
Personally I don’t believe in upgrading my home again and again. I’d rather take the savings and invest it in income-generating real estate. My house is 2,800 sq. feet on a half acre lot. I can’t find a reason that I’d would ever need more, nor a reason that a bigger home would actually make me happier so I opt to stay put, but, your personal situation is your own choice. I’ve learnt this philosophy from an acquaintance of mine who writes a blog that I strongly urge others to read on a regular basis, the good ol’ retired by 30, Mr. Money Mustache: http://www.mrmoneymustache.com
If you want to discuss more, please get in touch and thank you very much for sharing your feedback, personal situation and story.
Brent, you noted the 3.98% rate in Ottawa and 3.71% increase in Gatineau and said “The differences are not significant enough to be noteworthy.” I’d agree if you were in fact comparing “apples to apples” but it seems this discussion is premised on paying less for your house in Gatineau than in Ottawa in the first place.
If we take the example you gave above of a $300,000 home in Gatineau vs. a $650,000 home in Ottawa (the difference that generates the $10,000 in savings per year on the Quebec side) then the gains in equity in Ottawa, while similar in percentage terms, are far greater in actual dollars. At those historical rates, 20 years later the home in Gatineau would be worth roughly $620,000 while the home in Ottawa would be worth about $1.42 million. The gain in equity in Gatineau is $320K, in Ottawa it is $770K. This accounts for $10K annual stock market investment earning 8% over 20 years you laid out below.
I’m not suggesting that home equity should be one’s primary source of retirement savings, but I agree with Nate’s comment that this is an important factor to take into consideration.
Hi William,
Thank you so much for your feedback and insight. I sincerely appreciate it as it makes for a magnificent assessment piece. Let’s take a look at what is really happening here by comparing apples to apples.
Mortgage terms (for assessment purposes)
————–
Morgage duration: 25 years
Average annual interest rate: 4%
Ottawa
——-
Mortgage: $650,000
Monthly payment: $3,419.13
Total payments: $1,025,739
Interest paid: $121,019.85
Value after 25 years (3.71% compounded annually): $1,658,475
Return: $632,736 ($1,658.475 minus $1,025,739.00)
Gatineau
——
Mortgage: $300,000
Monthly payment: $1,578.06
Total payments: $473,418
Interest paid: $55,855.35
Value after 25 years (3.71% compounded annually): $719,145.02
Return: $245,727.02 ($719,145.02 minus $473,418)
What’s the conclusion? Yes, if you spend more on a house in Ontario you will earn more in appreciation, however, you will also pay more each and every month both in principal and interest. Your return percentages aren’t more impressive, instead you’re out of pocket $552,321 in additional funds, the difference between total payments between Ottawa and Gatineau purchases ($1,025,739 minus $473,418).
It is important to recognize that both assets appreciate at an average of 3.71% – 3.98% which is less than half of the 10.1% (7.8% adjusted for inflation) returns the stock market has averaged over the last 50 years. This is even less than 30% of the returns you can anticipate if you invest in cashflow-generating real estate (rental properties).
What you’ve done there is convince yourself that your house is an asset when in fact it is not, your house is a liability. Instead if you purchase a more modest home and divert all of these savings to an investment that provides you with higher returns (once again, average returns based on the market) you could have an exponentially higher return. Let’s see what happens if you buy a $300,000 home and divert those savings of $1,841.07 monthly ($22,092.84 annually) into a better income producing asset and earn an average return (using 7.8% so that we’ve adjusted for inflation):
If you lived in Gatineau and spent the exact same monthly as you would in Ottawa, but instead diverted those saved funds towards an average investment you would end up with a house paid off valued at $719,145.02 *and* $1,691,052.59 in investments which with no additional effort will continue to earn you $131,902.10 each year moving forward (7.8% annually adjusted for inflation). This is an eye opener for most, but this is accurate and this is why I’ll be able to retire in 6 years on my 41st birthday. I chose to spend less on my liability (my house) so that I could save and invest more in my assets (stocks & real estate). The results seem magical, but they are not, it’s merely leveraging the power of compounding numbers in math.
I hope this is insightful for you and helps you to make whichever informed decision is best for you. Best of luck and thanks again for your feedback.
Fantastic discussion
Agreed 🙂
Love this discussion. Would you say that for retirement purpose though Ottawa could be better ? If hypotetically one was downsizing home when moving to Ottawa so no more mortgage. With medication being cheaper, possibility of installing system to sell hydro at higher cost then you pay it and splitting pension income totally ( which you can’t do before 65 in Quebec anymore)
Unfortunately there are far too few tangible details to perform an assessment to determine the answer to this. In order to provide you with an objective response I would need to compare the costs of both houses including all associated expenses (hydro, taxes, etc.)
Very interesting discussion. But please tell me where I can get a 10% return on investment or where I can find rental properties with a 30% return!
The stock market has experienced a historical average return of 10.1% (7.8% adjusted for inflation) over the last 50 years; even if you receive more modest returns (e.g. 5-7%), you are still way ahead.
30% annual ROI in real estate is relatively easy; as long as one performs their due diligence and selects an optimal property (of which there are many available; we regularly invest in them). Purchase a triplex in Gatineau, Quebec for ~$350K with 20% down (costing you an initial investment of ~$80K including land transfer tax and legal fees) and one could expect to earn the following returns (obviously results will vary; this is from my experience):
– Appreciation: ~$52,500 over 6 years (assuming 2.5% appreciation per year to match inflation; this is conservative compared to historical real estate appreciation)
– Tenant mortgage paydown: ~$44,500 principal paid down (assuming $280K mortgage @ 3.97% fixed for six years as per TD Bank’s present public offering)
– Cashflow: $54,000 (assuming $250 / unit positive cashflow as per my most recent deal on a triplex)
– Tax benefits: $67,200 depreciation (assuming 4% depreciation per year as per Canadian law)
Even without tax benefits, presently I am earning $151,000 over 6 years with an $80,000 deposit down (and that original deposit remains equity in the triplex). That is nearly tripling my money or a 300% ROI (from $80,000 deposit to $80,000 equity + $151,000 ROI = $231,000 net worth increase). Divided by six years and I’m earning roughly a 50% ROI per year.
Assuming no appreciation whatsoever and I would earn $97,000 over 6 years with an $80,000 deposit down (and, again in this scenario, that original deposit remains equity in the triplex). That is more than doubling my money or a 200% ROI (from $80,000 deposit to $80,000 equity + $97,000 ROI = $177,000 net worth increase). Divided by six years, and real estate didn’t increase even a penny in value, and I’ll still be earning roughly a 37% ROI per year.
Both scenarios above only consider the appreciation, tenant mortgage paydown and cashflow ROIs. They don’t even calculate in the taxation benefits of depreciating the properties; which dramatically increases the ROIs even further.
Hopefully this answers your question; but if at all confused or you require clarification, please feel free to ask.
so for the triplex fully rented, we get tax deducted due to depreciation, but when we want to sell the property is not full amount taxable? I think it may be a zero sum game in relation to taxes, what you get via depreciation you pay at selling time, or am I wrong?
Depreciation expense helps companies generate tax savings. Tax rules allow depreciation expense be used as tax deduction against revenue in arriving at taxable income. The higher the depreciation expense, the lower the taxable income and, thus, the more the tax savings.
That being said, upon sale of the investment, you are correct, you will pay capital gains tax on the sale price minus the adjusted value of the asset, however what is important to remember is that capital gains tax is only paid on 50% of the capital gain amount, so while you gain 100% of the benefit of depreciation, you only pay 50% of the capital gains taxes at a later date. This delivers two benefits – (1) in tangible monetary savings and (2) by delaying paying taxes until a later date; enabling your monies to continue to compound in the meantime.
I grew up in Aylmer and lived in Hull for a while. I did the math. I knew living on the Quebec side was cheaper. But there is a quality of life issue.
I had two main reasons for buying in Ottawa. First, the commute. I work downtown and live close to the transitway. It takes me 15 minutes to get to work. I did live in Hull for a bit while working at the same job. The commute was frequently really slow and intolerable when it snowed. For 50 years they have talked about another bridge and now the Ontario government has shut that down again.
The second reason is the healthcare. There is an incredible lack of healthcare providers. This has been said to be because bilingual doctors move to Ottawa hospitals to get better pay. Also my wife is not very fluent in French. If she were to become ill she would have a hard time communicating.
Thanks for your input Mike. I am also an anglophone speaking Aylmerite. Luckily medical is not a challenge as we are welcome to use all Ottawa hospital services, just as any Ontarian is also welcome to use any Quebec hospital services so this one is not a concern of mine.
Travelling time can be a concern for anyone without a vehicle and depending where they choose to live and work this could definitely impact one’s decision, luckily for me I live in Aylmer and drive a vehicle to work in the west end of Ottawa each day; I leave home at 7:25am and arrive at work by 7:50am most days and that includes a 5 minute stop to drop off my son at school.
Still yet, everyone’s personal situation may impact the decision, and in some cases people will decide the benefits outweigh the additional financial costs.
Thanks again for taking the time to share your comments, experience and reasoning behind your decisions.
Very interesting discussion. Lots of respects in the various discussions. This is a great blog to read. We are actively looking to invest in real estate now and I am sure this blog will help !
Thanks for the compliments Martin, I sincerely appreciate the feedback 🙂
When I was living in Hull I did have a vehicle. The difference is I was trying to get to work for 8:30 or sometimes 9:00 am. Traffic is a lot heavier then.
Medically, in case of an emergency the ambulance will only take you to a Quebec facility.
There is a lot to consider. For some there are inconveniences that cannot be overcome. For others it works out fine.
If I were working in Quebec I would probably also live there. The commute, for me, is the biggest drawback.
Hey Mike,
Thanks for the additional input. I’ve been to the Hull hospital with my father a few times and never had problems getting service in English to date, but I live in Aylmer so I’ve never been to the Gatineau hospital.
Agreed, commutes can be longer depending on where you live. If you live downtown and work downtown the commute will be almost negligible for instance; it’s a personal preference whether the benefits outweigh the additional financial costs. Remember, saving & investing only $10,000 additional each year and receiving an 8% annual stock market return (lower then the historical 10.1% historical average over the last 50 years) will result in a whopping savings of $457,619.64 or an average earlier retirement of approximately a decade for an individual (assuming absolutely no further returns during the expenditure phase). See here:
I want to be clear I’m not posting this for argument sakes, but rather to expose you to think about all angles. In the end the trouble of the additional commute may still not be worth retiring 10 years earlier. You need to choose what is best for you.
Thanks again for sharing your insights & feedback.
I am sorry to say, but your analysis is a little flawed. As you mentioned, you need to account for all aspects. There are some that are monetary, some that are harder to account. Every situation of every single person is different. Therefore for some Ottawa is the viable option and for others it’s Gatineau.
– Commute time needs to be accounted to where the person work.
– This being said, we also need to account distance and ease of access to downtown. (Resale purpose, etc)
– You mention that a home on the Quebec side is 50% cheaper. That is because you’ve selected a house in Aylmer which is rather far. Therefore you can’t compare it to the price of homes near downtown Ottawa. You need to compare it to prices for Orleans, Kanata, etc. Those prices are very similar.
– Cost of move: there are welcome taxes in Quebec and the CMHC is taxable to almost 10%.
– Car insurances is higher on the Ottawa side, but license plates are much cheaper. This is because the no faults in Quebec is paid with our license plates and not in the insurances.
– Gas is much cheaper on the Ontario side.
– Electricity is cheaper on the Quebec side.
– Hospitals are not federally run, they are provincial.
– Quality of education is different, as is its length, price and accessibility. (Some advantages on both sides)
– Tax deduction in Quebec may appear appealing, but many are not available to higher income.
– Daycare is cheaper in Quebec, but sometimes its difficult to have your child admitted.
All in all there are advantages to both sides, it really depends on the person. It is already difficult to account for all the financial differences, the non financial are even harder… Which makes for a long and very personal analysis for each.
Thank you for your post and identification of some items that were outside the realm of my blog article. I’ve taken the time to assess the items you listed for the sake of transparency and to add to the interesting conversation. Let’s dig in and take a look at the facts regarding commute time, resale cost, car/gas/electricity costs, hospitals, education, daycare, etc.
Commute time
– From northern Aylmer to Ottawa west is 18 minutes (http://i57.tinypic.com/2hgzhn8.jpg)
– From northern Aylmer to downtown Ottawa is 15 minutes, 26 minutes with rush hour traffic at 8AM on a weekday (http://i60.tinypic.com/2e33a6t.jpg)
Ease of resale
– Let’s look at Canadian Real Estate Association’s latest quarterly statistics for resale statistics from a percentage basis (e.g. # of homes listed vs # of homes sold, http://creastats.crea.ca/natl/index.htm). Resale percentages are nearly identical for both Gatineau and Ottawa.
Houses in Aylmer & compared to houses in Orleans
– Average resell price (Q4 of 2013) is $410,600 in Orleans; average resell price is $267,800 in Gatineau. This is a 53% difference. I’ve emailed Canadian Real Estate Investment Wealth to ask permission to scan their magazine and post my source. If I get written permission I will post it in the coming days. If you wish you can pick up a copy of their magazine at Chapters.
Houses in Aylmer & compared to houses in Kanata
– Average resell price (Q4 of 2013) is $387,500 in Kanata; average resell price is $267,800 in Gatineau. This is a 44.6% difference. I’ve emailed Canadian Real Estate Investment Wealth to ask permission to scan their magazine and post my source. If I get written permission I will post it in the coming days. If you wish you can pick up a copy of their magazine at Chapters.
Cost of move
Yes, there are welcome taxes in Quebec, but, these are the same as land transfer taxes in Ontario, just named differently. CMHC is indeed taxable, in both provinces (see here: http://www.cmhc-schl.gc.ca/en/co/moloin/moloin_003.cfm).
Car insurance costs (including both plates and insurance)
I pay $230 for my license plate and $400 for car insurance annually in Quebec. When I was considering moving to Ontario my plate costs were negligable but my insurance costs would have been $1,300 annually. This is more than double in my case. I’d appreciate it if you would disclose your expenses so we can compare apples to apples.
Gas prices vs. electricity prices – Ontario vs. Quebec
In Quebec electricity prices are 8.55 cents per KWH including both non-peak and peak (I paid $488.35 for 5,710 KWH last 60 day cycle). In Ontario, prices are an average of 10.3 cents (20.4% higher). Calculations are available here to determine the averages (https://www.hydroottawa.com/residential/rates-and-conditions/), but if this is inaccurate please correct me.
Gas prices are $0.592 per meter cubed of gas (I paid $136.97 for 261 meters cubed of gas); I cannot find a reliable source online for gas prices, would you be so kind as to help me out with this assessment by providing me with your gas costs?
Hospitals
Quebec residents are welcome in all Ontario hospitals and vice-versa. As a father who has a son with Autism I leverage the expertise of both provinces. While there are amazing specialists in Quebec, I also have some specialists in Ontario that I leverage as well. When I had a medical issue last year with my back (awaiting surgery), I received medical services both in Ottawa and Orleans.
Education – quality and pricing
Post-secondary educational pricing is significantly less expensive in Quebec. I don’t even need to quantify this one, it’s well known that Quebec subsidizes their education and the cost is < 50% of Ontario's. As for quality, this is subjective and depends on the school, program, etc. Grade school math for instance is more advanced in Quebec and my friend's children struggle with Quebec mathematics after having moved from Ontario; whereas there are other educational benefits in Ontario as well. Since this is subjective, I'll leave this to the reader's opinions, as I have no interest in being pulled into a subjective debate that has no clear concrete answer. My post was related to the financial benefits and I very clearly indicated there are other factors to be considered.
Tax deduction availability to higher income.
Let’s assume a $150,000 income. Reference for calculations http://bit.ly/RLVw04
In this instance a Quebec resident with a salary of $150,000 will pay $7,071.00 more in taxes (no other assumptions or calculations included). This is approximately the salary required to start saving money by living in Ontario vs. Quebec with all other standard elements considered (real estate, etc.) if you are single without children.
Daycare pricing in Quebec
No need to dig in here, even without subsidization daily cost per child averages $25 / day on the Quebec side. This is still significantly cheaper than the average $45 / day in Ontario for child care. With subsidization the cost drops to $9 / day; we earn a household income of $125,000 per year and we qualify for subsidization.
There are definitely advantages on both sides, my assessment was very clearly related to the financial benefits only and I transparently identified that I was not considering all aspects. Thank you for your feedback and insight, I sincerely appreciate it.
Delightful discussion here. Thank you for being objective.
My pleasure Cynthia
I didn’t read through all the comments and questions, but from what I’ve noticed, you haven’t taken into consideration the comparative long term increase in value of a home on the Ottawa side versus a home on the Quebec side as part of the equation. My understanding is that Quebec side properties fluctuate enormously in their value over a 25 yr period whereas Ottawa homes tend to increase at a fairly steady rate (say 5% year over year). Given that a home tends to be someone’s main investment over the course of their lifetime, should this not be part of the equation of whether it is “cheaper” to buy in one place or the other? That is, it may be cheaper in terms of yearly costs to live on the Quebec side, however, all those savings are potentially lost when you go to sell your home and the value has not increased relative to a similar property on the Ontario side. Just a thought.
Hi Gordon,
While I don’t believe anyone’s primary residence is an asset, I believe it’s a liability (more info), this topic is covered in the comments. To read an assessment regarding your question about resale value and other topics, please see my comment above. The following topics are covered within them:
– Commute time
– Ease of resale
– House prices
– Moving costs
– Car insurance costs
– Gas & electricity costs
– Hospitals
– Education quality & pricing
– Tax deductions for higher-income earners
– Daycare pricing
Thanks for taking the time to provide your feedback and questions.
Great discussion!
We moved from Ontario (Orleans) to Gatineau nearly five years ago and when we did the math, we reached the same conclusions.
One thing that is often lost in comparing property resell values is the additional interests one had to pay over the amortization period for a comparable home.
A $400K home in Ontario, amortized over 25 years at 5% will cost you nearly $300K in interest alone.
A comparable home in Quebec is easily around $250K and usually sits on a larger lot. Amortized over 25 years at 5% will cost you about $185K in interest alone.
The Ontario home may appreciate at a slightly higher rate over the years (depending on location, etc) but rarely to the point to justify the additional “cost of ownership”.
Food for thought 🙂
Excellent point Johanne. Unfortunately as humans we have taught ourselves to believe our own lies to justify almost any expense.
This is why a scary 80% of individuals live beyond their means each day and with generational record-breaking credit card and line of credit debt ratios… ironically while driving around new cars and taking annual vacations regardless… terrifying.
Thanks again for your valuable feedback Johanne.
I rented in Ottawa for 9 years, and I just bought a house in Alymer. I’m a single guy making 70k a year, and I can easily afford my 240k mortgage over 25 years.
I work from home, so the commute is negligible. Cheaper electricity, insurance, and the fact I can afford a gorgeous house on half an acre that’s 15 minutes from downtown Ottawa are key reasons why I switched.
Though, I think a a lot of people do what I do until their kids are old enough to go to school. They take advantage of the cheap daycare, and when kindergarten is starting, they move to Ontario.
Loved the discussions.
As it is income tax (always a shock for a Quebecker), I was thinking that maybe we should move to Ottawa from Gatineau, we are retired in our 60’s and we have been living in our house for 21 years.
After reading all the comments, I will not be doing any boxes and I will keep on enjoying my house
I’m happy that my blog article and the valuable comments thread have helped you to make an informed decision, one that is best for yourself. Congratulations on retirement, I hope you enjoy it immensely 🙂
I also live in Aylmer and I question the real estate prices quoted in this article. My 1,500 sq.f. home in a desirable neighbourhood is worth approx. $400,000 in the current market, with the equivalent Ottawa home around the same price or slightly higher (we’ve shopped). We can upgrade to a much nicer Ontario home for less than $100,000. The 50-100% price difference does not truly apply to most situations. Even if we ignore that, then the article makes no mention of the fact that you get the value difference back as a retirement fund (when you eventually sell and downgrade) – which is a big consideration.
On the flip-side, electricity prices can severely impact any price analysis, as hydro prices are very different. This element seems neglected in many of these comparisons. Other elements such as subsidized daycare are mostly inconsequential as you are unlikely to get a spot anyway. And finally, health care is awful to non-existent in Gatineau, so that could be a big consideration for many.
Thank you for your comments and feedback.
As for the fact that you can get the value difference back as a retirement fund (when you eventually sell and downgrade), I never make this assessment, because, I don’t believe this is a responsible approach for investing (read my other blog articles). The reason for this is several-fold:
In Aylmer there are currently 461 houses for sale on MLS.ca. The average selling price is $243,463, far below what your house may be worth.
Let’s take a look at a few of similar size:
– 1,200 sq. feet, $188,900 (Click here)
– 1,350 sq. feet, $224,900 (Click here)
– 1,420 sq. feet, $237,900 (Click here)
– 1,470 sq. feet, $267,900 (Click here)
– 1,405 sq. feet, $274,900 (Click here)
Most of these places are newer construction (with exception to the last one).
In fact if you look at the entire listing of houses for sale in Aylmer priced high to low, you will notice there are only 206 out of 759 houses priced higher than what you are claiming your house is worth. This is in the upper 27% of house prices, and if you assess all 206 of these places worth more than yours, 158 of them have more square footage than your home as well (in many cases *significantly* more). The fact is that if your house is indeed worth $400K, it is likely classified as *very* luxurious and/or in a “prestigious” neighborhood and outside the norms of this assessment, as this assessment was done using averages so that it applies to the majority of individuals’ situations.
That being said, I’d like you to show me the listing to your house, as well as the listing to the house that is only $100,000 more in Ottawa so that I can do an independent assessment to determine if in fact we are comparing apples-to-apples (similar house size & quality, similar neighborhood prestige, similar property size, etc.); you may have indeed fell into one heckuva deal and might want to jump on this immediately!
As for the other topics (electricity, daycare, etc.) they are indeed covered within the comments (see here), please take the time to review them in detail. Daycare, even without subsidization, is significantly less expensive, averaging $25 / day / child as opposed to the average of $45 / day / child in Ontario (that’s a whopping $400 additional per child per month from one city to the next!)
I’d love to delve into this even deeper but I’ll need all of the details from you, to provide my readers with an unbiased fair assessment.
Thanks again for taking the time to provide your comments on my blog. I hope you have a wonderful weekend.
How can you compare those 2 cities? It’s like comparing longueuil with montreal. It doesn’t have anything to do with the province
Clarified in article.
Comparing Gatineau to Ottawa is NOT comparing apples to apples. The only conclusion you can make out of this is that is costs less to live in gatineau than Ottawa. But unlike what your article says, living in quebec does not cost you less than ontario. What if you made the comparison with Montreal VS cornwall? Or Detroit VS Windsor? would that represent Canada VS US?
You said “it’s still significantly financially beneficial to live in Quebec vs. Ontario.”
You should make it clear that you are comparing two cities and not two provinces.
Good point, thanks for pointing that out. Adjusted wording.
Reblogged this on marymavie.
One thing that hasn’t been mentioned (i think)….
The fiscal situation in Quebec leaves a lot to be desired. I worry about the sustainability of a lot of these subsidized programs you’ve mentioned in order to conclude why Quebec may be a better choice. The Quebec government has run deficits the last six years despite collecting the most money through equalization. These deficits are projected for the foreseeable future as well as the government is dealing with lower than expected revenues and an increase in expenditures. Furthermore, the debt levels are higher than any other province on a per capita basis. Any rise in interest rates will only make the situation worse.
Don’t get me wrong, Ontario’s fiscal situation is horrible as well. However, the low cost of insurance, daycare and education are huge incentives for people choosing to live in Gatineau vs Ontario. I just don’t think the province has the funding to continue these generous subsidies indefinitely. This would be a huge blow to real estate prices on the Gatineau side if these were cut.
Something has to give.
You bring up some excellent points that warrant consideration.
Before I address your points I would like to point out that I purposely excluded these subsidies (daycare, write-offs for dependants, lower property taxes, no water bills and subsidized medical coverage, exponentially less expensive college & unversity education, etc.) from my financial calculation consideration as they would slant the analysis even more in favor of Gatineau, Quebec.
I don’t pretend to know a lot about the deficit, but I do see that Ontario’s debt per person is lower at this present time.
As of August 2013 Ontario’s debt is 14.7% lower than Quebec’s:
– Ontario: $20,166 debt per person
– Quebec: $21,922 debt per person
Now let’s take a look at the forecasted 2014 deficit per province:
– Ontario: $866.67 per person ($11.7 billion; population of 13,500,000)
– Quebec $311.39 per person ($2.5 billion, population of 8,028,400)
While Quebec may opt to reduce some of their programs, to recover a deficit of $311.39 per person, no drastic changes need to be made, simply a minor adjustment, which is why Quebec is not reacting with urgency to address this as they see the benefits of the programs outweighing the costs of the deficit. Furthermore, Ontario’s 2014 deficit per person is nearly triple of that of Quebec!
In the end these are not the only risks, nor are they the only opportunities for growth (just the same for Ontario). Nobody can predict the future, and most times when people try they are dramatically incorrect, all we can do is make our best calculated guess decision at the time and live with our decisions.
Thank you again for your feedback, I sincerly appreciate you bringing this up so that we can look at the considerations from another angle.
Sincerely,
Brent
references: #1 | #2 | #3 | #4
Just remember though, it’s more realistic to divide your total deficit and debt by taxpayer, rather than citizen. The picture becomes even more bleak. Sorry for the doom and gloom.
You’re right on many other counts though. Good article and discussion.
Excellent point, tracking down the stats by taxpayer has proven to be rather tough. I’d imagine those deficit & debt numbers would look much worse in that case for all provinces. Thanks for the insight.
I think a lot of this is case by case, and there is some good analysis in here, especially the comments. However- A few disjointed, random comments.
My wife and I were seriously considering the Gatineau side but after a lot of discussions and looking for homes on both sides we decided on Ottawa for the following reasons. We were able to find a good home in an area we think is great and getting better (Vanier) for 360k. Similar sized houses where we were specifically looking in Gatineau were running from 289-339 at the time, ( the one we liked the most in Quebec was 319$) so only 40k less, much less than the 50-100% difference.
We also looked at commute. We would have been at a combined commute (myself plus my wife) of around 65 minutes one way on a good day with the use of a car. We now have a total commute of 40 minutes one way with no need of a car(savings in terms of depreciation and gas) and because of the situation and the bus/walk there is a very little difference on good days vs bad days ( my wife walks, so no difference at all, I bus and Have at most seen a 10 minute difference). There is also some value in stress to not driving at all. If it is a snowstorm, my bus driver has to worry about it, not me, I sit in the back on read emails, books, etc.
Long term, the asset value was a consideration as well ( you do mention not believing a house is an asset, in which case my question becomes why buy then, why not rent always if the home is not an asset assumed to appreciate in value?)
We also looked at walk scores and the Ottawa side houses we were looking at scored much better on the walk scores.
Another thing to consider is that absolute cost in a lot of peoples lives does not translate into invested money. IN most lives, money fills a vaccum so the cost savings on mortgage payments will not be 100% invested in a stock market return of 8%, likely more of that will be spent.
There is also long term, once the mortgage is paid off and the kids are no longer in daycare, taxes are still higher in Quebec, so an analysis would have to be made lifetime with the Ontario person investing the lower tax savings amounts in an 8% stock market.
Also the analysis on the stock market implied that the mortgage savings would all be invested, again ignoring the fact that some of those savings are in fact swallowed up by the tax increase.
So overall great analysis and discussion, but it is a much more complicated calculation and consideration I think than what is being considered here and a lot depends on invidual choices and circumstances.
Thank you for your feedback. Very insightful and a lot of detail shared, much appreciated.
Vanier being a neighborhood with a lot of former bad stigma has many deals that make sense in comparison to other neighborhoods. Unfortunately as I’m certain you know, most people would be unwilling to move into that area for that reason. Please note that my blog was written based upon the averages for Gatineau and Ottawa so it would apply to most individuals’ experiences, but there is no way I could write an article that would apply to every unique one – the 50-100% applies almost every neighborhood in Kanata, Nepean, Orleans and of course downtown areas.
Commute, stress and preference comes into play as well. In many situations people will decide to spend more for these reasons; the intention of my blog is to help people compare apples to apples and make a clear unbiased decision if the additional costs are outweighed by the benefits (note: I recognize your situation makes for a much easier decision, but it’s not the typical comparison that the majority of people are making).
As for a home being an asset versus a liability and the consideration of buy vs. rent they are apples and oranges comparisons. I am a strong advocate of buying when it makes sense (this is a long discussion and off topic but in summary if mortgage interest + property taxes + condo fees (if any) is greater than the cost to rent in the area then it would be a bad investment to purchase). At the same time I urge everyone to recognize that their home is a liability, it costs them money every month and doesn’t make them money; even if paid off there are still expenses. An asset makes money, a liability costs money. Of course there’s value in a house, but, there’s also value in a car, cottage, etc. These are all still liabilities.
With respect to my comparison of investing the 8% in stocks, only the difference saved after paying the additional tax was used in the calculations. Unfortunately you’ve signalled a human weakness, you are entirely right in that most people divert those savings elsewhere instead of investing them. Luckily I haven’t and by investing these savings I can now retire in 6 years at the age of 41 if I wish.
You mention daycare, I won’t bother addressing it since my financial calculation clearly identifies that I excluded this from my financial calculations to ensure that my results were unbiased. This was simply the cherry on top, but excluded from my calculations nonetheless.
While the decision appears to be complicated it really is not. Everyone should transparently determine the numbers without any biases and then make the decision that’s best for them with the facts. If they choose to spend more living somewhere in Ottawa even knowing that they are sacrificing their own ability to save and possibly the ability to achieve financial freedom then they’ve still made the right decision in my opinion – because they did so based upon unbiased facts.
Thanks again for your valuable feedback and insights, I believe a few of the items you mentioned you misunderstood my post or might possibly convinced yourself that I didn’t consider them. I know these decisions are very personal and there’s more to life than money (I take trips annually, spend a % of my salary on entertainment just like everyone else, etc.). My goal with this blog is to help others compare apples to apples and to prevent them from believing their own lies; and yes believe it or not there are too many people who do that. I mentor startups in Ottawa and of the 25 I met last year, more than half of the financially-educated and business-experienced entrepreneurs were doing exactly that – believing their own lies.
Congrats on the house in Vanier! Looks like you’ve found yourself a great place to live with a lot of conveniences and that you’ve considered the pros & cons of your personal situation.
Thanks for the quick reply. Indeed, Vanier is an untouchable area for many still, although thankfully it is changing rather quickly and I certainly hope that the market in Vanier does become an average Ottawa market sometime in the future (that would mean the value did increase substantially on my purchase).
My read response as done very quickly over lunch, so my apologies if I misinterpreted any of your analysis. I just wanted to point out my thoughts on a few of the points.
My thoughts are the same regarding the Vanier area. It continues to improve each and every year and as a result of the downtown core continuing to grow it is my assumption that the improvements will further accelerate.
No need to apologize regarding any misinterpretation. I sincerely enjoyed your feedback and well thought out response. My blog is an open forum for discussion and learning by everyone.
Thanks again for taking the time to respond.
After living in Ottawa for 27 years, I purchased my first home in Aylmer. I grew up in Aylmer/Hull area as I had family there and would come up almost every weekend or so. I laugh every time I hear people make fun when they think I live so far when I say Aylmer. I live near Rivermead and the Chateau, which is less than a 10 minute drive to downtown Ottawa, and 5 min drive to Ontario side (backdoor access to west end through the parkway @ 10 minutes).
For purchasing a 3 year old house that close to the heart of the city in any country at the price I paid for is unheard of! If I were to buy the same house in Ontario, I would have spent over a million dollars. I now have access to beautiful Gatineau Park; I saved a crap load by purchasing a home here; I pay 7 dollars a day for day care; zero for water, I laugh at my monthly car insurance rate which I pay 80 dollars for 2 cars at 2 drivers; affordable property tax; I have a nice sized piece of land, and amazing neighbors. In my opinion when looking at the bigger picture I believe I made the best decision when I decided to purchase here.
If I wanted to pay an arm and a leg, put myself In debt for double the amount of time, pay 50-70 dollars a day for daycare, pay 200 a month for 1 car insurance, live in a box, have zero land and live in stacked overpriced neighborhoods where everyone can peer into your back yard, pay ridiculous fees in gas/water/hydro (didn’t gas go up 40%?) then yes perhaps I will move to Ottawa, Ontario. But until then I’d rather enjoy it for all the right reasons I decided to purchase in Aylmer. And the upside, my house value is increasing around 30K a year, couldn’t be happier. Thanks for the article Brent.
Thanks for your detailed feedback and numbers Benji. All of the reasons you identified are many of the same reasons that I chose to live in Aylmer, Quebec versus Ottawa, Ontario.
I too live in Aylmer, but on chemin Vanier. I have a beautiful 2,800 sq. foot home on a half acre lot of land (20,000 square feet) which is 10 minutes from downtown (30 minutes during bad traffic) and I paid $215,000 for my place. At current values, my home is now valued at roughly $350,000; a fraction of the cost that it’d be in Ottawa (although I doubt you could find a lot this size anywhere in Ottawa).
Even without all of the other benefits you cited above that I also enjoy ($7 a day daycare, no water bill, $80 / month for car insurance for 2 cars with 2 drivers, property taxes at a fraction of Ottawa’s) I still come out *way* ahead financially.
Appreciation in Aylmer has been outpacing Ottawa for the last several years as well and just last night got an additional boost as a result of the Liberal-majority election (although at some point down the road these will stabilize and equal out); these are just the cherry on top for me.
Thanks again for your feedback & tangible numbers. I always appreciate responses with numbers as they add value to other readers who would like to compare.
Hi Brent
I currently do live and own a semi-detached house in Aylmer. I’ve lived in Aylmer for more than 15 years, this is my second home purchased in Aylmer. I have recently just listed my home and currently looking for a new place in Ottawa.
I have been going over the number’s, for a single women with no children.
I’ve come to the point where I just don’t see the benefits for living in Quebec.
Here’s my situation regarding my vehicle …
I own a 2007 Mazda 3
I pay…
$576 for car insurance +
$253.00 Plate +
My licence I paid $263.00
I got a speeding ticket and lost 2 points, which now will cost me at 50 dollars a point and extra 100 dollars to renew my licence.
Grand total of $1,092
I’ve called for quotes for Ontario insurance and I’m looking at roughly around $1,020 + $80 for the sticker. This quote does not include discounts for insuring the house I purchase.
Now let’s look at the property taxes.
I currently pay, with school taxes a grand total for 2014 = $3,800
I have friends in Orleans and Kanata with single homes double the Sq.ft that are paying the same price as what I’m paying for a semi-detached. I don’t get it.
Income tax OH GOD!! It’s that time again. 😦
To many hands in my pocket, I owe every year and it’s never pretty.
I just don’t see where I’m saving money by living on the QC side, however it all depends on your situation.
I do believe families with young children would find it more affordable to live on the QC side compared to the Ontario side.
All in all I’m sad to leave Aylmer!
This has been a difficult decision, I really have enjoyed living in Aylmer all these years.
Everyone seems so friendly, my neighbors are not just my neighbors they are friends as well.
The commute to Ottawa has never been an issue.
Aylmer has everything you need in a 5 minute drive in every direction.
– Walmart, Loblaw’s, Super C, GT, Canadian tire, Rona, Tim’s, Box stores and so on…
– The Aylmer Marina is a perfect place to relax in the summer
Thanks for the great article and discussion.
Hi Sue,
Oh my gosh, you need to call the city for a re-assessment on your property & school taxes. You have been overpaying significantly, there’s something wrong there. My property tax is $3,000 / year and my school tax is $600 / year and I own a 2,800 sq. foot single family home on a half acre lot. There is something incredibly wrong with what you are paying.
What is the mortgage on your house versus the equivalent for a place in Orleans? Can you list both of them here so we can compare apples to apples? A brief search on MLS.ca shows most row houses in Aylmer under $200K (see 1, 2 and 3). In comparison, much smaller Orleans houses tend to sell for $270K (see 1, 2 and 3). That’s an additional $70K in mortgage & $50K in interest over the next 25 years!
Also don’t forget when you sell your place and buy a new one you’ll be paying land transfer taxes ($5-8K), legal fees ($2-3K), real estate agent fees ($8-12K), moving expenses ($1-2K), utilities transfer and/or setup ($1K) and numerous incidentials ($1-2K) so that move will cost you immediately out of pocket $18-28K. Considering that’s after-tax dollars, you’ll be throwing away close to $40K in pre-tax dollars for the move in addition to the $120K of additional mortgage payments & additional interest costs cited above! Well worth considering.
Depending your salary it’s quite easy to calculate the difference you would pay in Orleans versus Aylmer, a couple of calculations and you’ll be able to make an informed decision.
Thanks again for sharing your situation and details and if you have any additional tangible numbers that I could use in another case study I’d appreciate it (sell price of Aylmer house, purchase price of Orleans house, etc.).
Best of luck on your move! Oh and I agree about the amenities – neighbours, businesses & services are top notch.
First off your article is very interesting!
Currently I rent in ottawa but my girlfriend and I are planning to buy our first home. We make an combined income of 145 000 and will break the “150 000” mark in the next 5 years. We are both 25 years old with permenant government jobs.
We are looking at homes in ottawa around for 400000 vs brand new build in plateau for around 320000. We currently have 5% down payment.
What would be the break down of the two options. You mention “150 000” being the magic number. Does that mean buying in Ontario would be wiser? It’s a debate I have with myself trying to decide what would be financially savy? What would be the equivalent price for a property in ontario to a $320000 property in plateau. I would appreciate your insight!
Thanks
Morgan
Hey Morgan,
Depending up on where you choose to live on both sides of the river, it looks like it may be more financially beneficial for you to choose Ontario, especially since your salaries are likely to continue to rise since you are both young.
The cost difference between a $320,000 and $400,000 mortgage (~$500-700 monthly) compared to the tax savings you would receive from living on the Ontario side (~$900 monthly) assuming a $150,000 combined income, no other assumptions aside purely from a financial perspective Ontario would be the better choice. One important exception that requires a lot more assessment and calculations would be if you plan to have children – education & daycare savings on the Quebec side are *breathtakingly* significant.
I hope this helps you to make an informed decision. If you would like more help deciding I would need additional details about your lifestyle (income breakdown, car(s) driven, insurance(s) paid, listing of both properties being considered, anticipated number of children, etc.).
Best of luck on your upcoming purchase and congratulations!
This is the article that I was desperately looking for !!
Here is my situation in the hope of your assistance.
I am currently living in Toronto and this week is my House Hunting Trip.. Yes, I work for the federal government meaning that they will paid for moving fees, etc. Since the day 1 of my trip, several people told me to buy on the Quebec side, others on the Ontario side. Today I am in the road cross and still uncertain of what I should do.
So here are the facts regarding my situation. If you need more details please feel free to ask.
– Annual income of 80k;
– Am looking for 300k MAX mortgage,(most likely in the 200-250s);
– My work pays for the moving fees, welcome tax, lawyer, notary, etc.
– My work schedule start at 7am and finish at 3pm (no real commute problems here);
– I will probably have to move in 3 to 5 years to my new “posting”;
– This is my first home purchase and I am looking to buy a Condo type of building like a row unit or stacked unit where I do not need to take care of the building or the lawn, (with low maintenance fees);
– I am currently a single man (in the early 30s);
– I do not plan to have kids in a near future neither;
– I own a Mazda 3, 2010 (2 more years to pay at $485 a month);
– I am a cleaned driving records;
– I am fluent in French so the language is not a factor;
Also, talking with friends and colleagues, some says that since the PQ lost the elections, the value of the properties on the Quebec side will rise by 10 to 20%…
And also that the value of the Ottawa real estates is currently to high and will plunge to a more accurate value in the next few years (going down by 15%).
The 3 to 5 years mark is very critical for my situation since I will have to sell and the fact of selling at lost for my first property will completely ruin my first step in the world of real estate investment.
Basically, I want to buy something nice that I can afford and still have a good quality of life.
I would really appreciate your point of view regarding my current situation.
Best regards
Hugues
Hi Hughes,
First of all I want to be transparent in letting you know that my calculations are based on the past and present and there’s no way for me to know what will happen in the future. To tell you otherwise would be unaligned with my morals – unethical and deceitful. That said, I will provide you with my input based upon what I perceive to be the most likely scenario to occur.
Now that I’ve gotten that out of the way, let’s get started…
Let’s start by looking at your taxation situation (reference for calculations: http://bit.ly/RLVw04):
As a Quebec resident who earns $80,000 annually you would pay $4,601 more in taxes ($22,811 minus $18,210) than an Ontario resident. Monthly additional expense would amount to $383.42.
The next step you need to take is find the places you want in either Gatineau or Ottawa and determine the approximative sales price. This will depend upon your requirements, but I assume a 1 bedroom / 1 bathroom is adequate for a single man. Let’s take a quick look
Brand new 1 bedroom, 1 bathroom in Aylmer, Quebec, great neighborhood where I live is ~$125K (see here). There are others as well in the similar price range, all new and all in good neighborhoods (#1 | #2 | #3)
In Kanata similar places tend to cost $160-180K (#1 | #2 | #3 | #4).
In Orleans similar places tend to cost $180-220K (#1 | #2 | #3).
Downtown Ottawa similar places tend to cost $240-300K (#1 | #2 | #3 | #4).
Obviously you may want additional bedrooms and/or bathrooms, I don’t know your precise requirements so you may need to perform your own assessments once you find desirable places for comparison. For our assessment let’s take the two smallest differences, Aylmer versus Kanata:
Mortgage terms (for assessment purposes)
Morgage duration: 25 years
Average annual interest rate: 4%
Aylmer
Mortgage: $125,000
Monthly payment: $657.53
Annual payments: $7,890.36
Kanata
Mortgage: $170,000
Monthly payment: $894.23
Annual payments: $10,730.76
All other considerations aside, in this scenario it would be more financially beneficial for you to live in Kanata than to live in Aylmer as you would spend $2,840.40 more in mortgage payments but you would pay $4,601 less in income tax annually. This results in a $1,760.60 difference. Now if you consider the $1-2K of which you would save in property taxes & car insurance by living in Aylmer, it essentially levels the playing field. While these aren’t the only considerations, you also identify a number of items of concern (Gatineau real estate prices 10-20% in the short term which I am witnessing first hand, Ottawa real estate to drop 15% which is speculation and I have no clue if it will happen, 3-5 year mark is critical but there’s no way to forecast short-term); each of these items are merely calculated guesses, especially in the short-term. Finally there’s your consideration for a good quality of life which may sway your decision, and rightfully so. These are all considerations you need to make.
Good luck with the condo hunting, I hope you find what you are looking for and if you have any additional questions I look forward to your response. Oh and congratulations!
Thank you so much for your input !
I should have specified that I am looking for a 2 bedrooms condo (townhouse type) and that the price will be in the $250s.
What I am most afraid in Ottawa is the hidden unknown fees that seems to rise from no where like water tax, sewage tax, cost of hydro which seems to be way higher then the Quebec side.
In another hand, To help with the mortgage value is that I currently have a 2.99% interest rate with my bank that I can bring down to 2.5 % for a fixed 5 years.
What I am looking to buy in Ottawa is brand new and still under construction.
What I am looking to buy in Gatineau is 2 years old.
Mortgage terms (adjusted to my current situation)
————–
Mortgage duration: 25 years
Average annual interest rate: 2.5%
Mortgage
Gatineau: (Appliances not included)
——-
Mortgage: $212,000
Monthly payment: $949.69
Annual payments: $11,396.00
Ottawa (all appliances included, possibility of walking or biking to go to work)
——-
Mortgage: $286,000
Monthly payment: $1281.18
Annual payments: $15,374.16
Both property have a low maintenance fees (less then $150)
A difference of $3978.16.
I am still so confused about all the choices and possibility on Quebec side versus Ontario side, many Pros and cons on both sides. It seems that where ever you are and who ever you talk to, the grass will be greener on the other side.
Thank again for your assistance with my situation
Hugues
From a financial perspective it’s going to be close but likely favorable to live on the Quebec side with what you are comparing.
So far these are the known numbers:
Ottawa
+$3,978.16 higher costs in real estate
Gatineau
+$4,601.00 higher costs in income tax
At this point you know it’d be $622.84 more to live in Gatineau (or $51.90 monthly).
Now it’s time for you to make some calls to figure out the following expenses
I can tell you that your assessment will likely show you the following higher costs in Ottawa versus Gatineau:
If the analysis for your situation is similar you are looking at it being more financially beneficial to live in Gatineau, but results will vary, every situation is unique and you need to get the facts in order to be able to truly compare apples to apples.
I hope this helps. If you are able to get those numbers and submit them back for our readers I would be very much appreciative. Unbiased facts like this are invaluable for each and every single reader so thank you.
Sincerely,
Brent
I just started renting in Plateau in Quebec and I love it! We are HIGHLY considering buying here in the near future. Especially because we are young and want to start a family. We make 75,000k/year combined so we would have to double that before we would be running back to the Ontario side – haha! Thank you so much for this article and all of the information. I am going to pass it on to my husband. It’s very helpful and I love how much detail you provide. All the best, Chelsea
Hi Chelsea, thanks so much for your feedback and complements. All the best 🙂
Sincerely,
Brent
Just a small clarification, if I may. The welcome tax in Quebec (taxe de Bienvenue) to which you refer is NOT a “welcome tax” (you will notice the capital B in Bienvenue) It is named after Mr. Jean Bienvenue who was the minister who istigated this tax in 1976. It is in fact, as you mentionned a tax on “droits de mutation immobilière”
Here is the reference (in French) from the Quebec city website.
http://www.ville.quebec.qc.ca/citoyens/taxes_evaluation/droits_mutation_immobiliere.aspx
thanks
Thank you for the details and clarifications. I sincerely appreciate it. Every day I have the opportunity to learn something new.
Great blog! Really the only thing keeping me from moving back to Quebec (I grew up there and my family has been there for generations) is health care. My father was chronically ill and lived on the Quebec side and if (and it was very rare) we encountered someone who could not speak English, someone was fetched who could translate for us – so that’s not really an issue. But, there are aspects that are not within one’s control — many (most, I would say) Ontario docs will not take a Carte de Soleil (QHIP) and the QC gvt will only reimburse what they pay and not the higher rate in Ontario. Some places will not accept the card at all so you have to pay upfront and seek reimbursement and that can get costly. If you have a serious illness you can be sent to Montreal and face additional costs and inconveniences (e.g., if you want your spouse to be with you, they need to find accommodation and cannot work in the NCR while in Montreal). See http://www.theglobeandmail.com/news/national/time-to-lead/part-5-looking-for-the-cracks-in-medicare-try-the-ontario-quebec-border/article1315003/?page=all#dashboard/follows/
I think the education in Quebec is just as good as the one in Ontario. The CEGEP system works really well for some students and lets you try out university-level/compatible courses for a fraction of the cost of a university course.
First of all my heartfelt condolences regarding your father. My uncle had these same challenges and I sympathize with you on this manner. He opted to travel to Montreal for treatment every few weeks, but, this is not always the best choice for everyone. Thank you for your feedback and for providing details, this will be very helpful for anyone reading this blog.
You forgot to include the costs of French courses for those who don’t speak the language and want to move to Québec. If you plan to move there, you need to learn the language of the community in which you will live in. Sorry but that’s important.
If an individual moves to Quebec there are primary, post-secondary, college and university courses offered entirely in English.
Forgot to mention that Quebecers (Gatineau) take advantage of the Children’s Hospital, Ottawa Hospital, Heart Institute. Not to mention access to specialists and family physicians due to lack of funding in their healthcare in the Outaouais.
Absolutely. As a Quebec resident with a child that has disabilities, I regularly use the services of both Quebec and Ontario facilities.
$400,000. Buys a one bed condo in Vancouver,, what a difference a few thousand kms make. Consider yourselves lucky.
Indeed. Vancouver, Toronto, Calgary & Montreal have significantly higher real estate costs than Ottawa and surrounding areas.
Good article, but you don’t look at the long term picture but rather only a year to year breakdown (that also assumes one would purchase a home over twice the dollar amount and never pay it off, as once mortgages are paid, this becomes irrelevant).
Also remember that the amount of money saved in taxes (in Ontario) will generally go towards your home (ie capital, which you will see again when you ultimately sell it) whereas the additional money spent on taxes in Quebec will simply go to Quebec (ie you will never see that money again).
Thank you so much for your feedback and insight. The long-term picture has been studied from numerous angles in the comments. Please take the time to review them if it is of interest. Let’s take a look at what is really happening here by comparing apples to apples by assuming a purchase of equivalent size in Ottawa and Gatineau.
Mortgage terms (for assessment purposes)
————–
Morgage duration: 25 years
Average annual interest rate: 4%
Ottawa
——-
Mortgage: $650,000
Monthly payment: $3,419.13
Total payments: $1,025,739
Interest paid: $121,019.85
Value after 25 years (3.71% compounded annually): $1,658,475
Return: $632,736 ($1,658.475 minus $1,025,739.00)
Gatineau
——
Mortgage: $300,000
Monthly payment: $1,578.06
Total payments: $473,418
Interest paid: $55,855.35
Value after 25 years (3.71% compounded annually): $719,145.02
Return: $245,727.02 ($719,145.02 minus $473,418)
What’s the conclusion? Yes, if you spend more on a house in Ontario you will earn more in appreciation, however, you will also pay more each and every month both in principal and interest. Your return percentages aren’t more impressive, instead you’re out of pocket $552,321 in additional funds, the difference between total payments between Ottawa and Gatineau purchases ($1,025,739 minus $473,418).
It is important to recognize that both assets appreciate at an average of 3.71% – 3.98% which is less than half of the 10.1% (7.8% adjusted for inflation) returns the stock market has averaged over the last 50 years. This is even less than 30% of the returns you can anticipate if you invest in cashflow-generating real estate (rental properties).
What you’ve done there is convince yourself that your house is an asset when in fact it is not, your house is a liability. Instead if you purchase a more modest home and divert all of these savings to an investment that provides you with higher returns (once again, average returns based on the market) you could have a much higher. Let’s see what happens if you buy a $300,000 home and divert those savings of $1,841.07 monthly ($22,092.84 annually) into a better income producing asset and earn an average return (using 7.8% so that we’ve adjusted for inflation):
If you lived in Gatineau and spent the exact same monthly as you would in Ottawa, but instead diverted those saved funds towards an average investment you would end up with a house paid off valued at $719,145.02 *and* $1,691,052.59 in investments which with no additional effort will continue to earn you $131,902.10 each year moving forward (7.8% annually adjusted for inflation). This is an eye opener for most, but this is accurate and this is why I’ll be able to retire in 6 years on my 41st birthday. I chose to spend less on my liability (my house) so that I could save and invest more in my assets (stocks & real estate). The results seem magical, but they are not, it’s merely leveraging the power of compounding numbers in math.
One other argument that you make is that you will see these funds once again when you sell your home, however, the reality is that you will ultimately need to purchase another house to live in.
I hope this is insightful for you and helps you to make whichever informed decision is best for you. Best of luck and thanks again for your feedback.
Having lived in the Aylmer area for some 30 yrs then moved to ottawa west for the last 17 yrs I can agree with most of your points. There are the intangibles to consider as well. Being an anglophone in Quebec isn’t always pleasant, you’re often not well received as you will encounter varying degrees of prejudice. Encountering prejudice in a retail outlet is somewhat less an issue as you have the freedom to buy anywhere ( we later resorted to doing much of our shopping in Ottawa) but dealing with any level of government was often a challenge. When my wife had surgery in the Gatineau Hospital she felt frequently ignored while adjacent (French speaking) seemed to receive better and more frequent attention. Everyone’s situation is unique, do your own research. I have many wonderful memories and tons of fabulous friends and family in Quebec, but I won’t ever have my primary residence there again.
I agree with you, the intangibles makes the decision much more challenging. This blog only analyzes the decision from a financial perspective, not from any other perspective. Thank you for your valuable feedback.
Its actually $7/day for a subsidized daycare in Quebec, not $9
Thanks for the clarification Kayla. I’ve received mixed reports, I will adjust the blog article.
I disagree with the hospital part of this article. I work in an emergency department in Ottawa, and yes Quebec residents are welcome to the emergency department and many come anyday to avoid long wait times in Hull/Gatineau. However, when it comes to being referred to a specialist, they are almost always (except for children and CHEO) referred back to Gatineau/Hull where there is a several year wait time (orthopedics). Also in Gatineau/Hull, many people do not have a family doctor and therefore a very poor regular F/U. Yes they can use walk in clinics like Appletree Medical Clinic that do except Quebec residents but that still won’t guarantee them a regular F/U by the same physician especially if they are suffering from chronic health issues.
Being in the medical field and having worked both in the emergency department in Hull and Ottawa, I quickly ran away from Quebec and purchased a home in Ottawa…
Thanks for your feedback Claire. Everyone’s experiences have differed and I’ve received several comments by readers regarding medical, some which agree and some which disagree with your opinion. From my personal experiences to date, having a son with Autism, a wife who recently recovered from a blood clot in her leg, and recently experiencing a back injury myself; we’ve had no challenges receiving regular and expeditious medical care both in Ottawa and Gatineau.
On the topic of family doctors, although we live in Gatineau, our family doctor is in Ottawa at the Smythe Medical Centre. We have regular check-ups and are quickly seen when we have concerns. We also don’t pay for out of province services, as our family doctor bills Quebec directly.
In summary, from our experiences to date we’ve got very little to complain about from a medical perspective. Living in Gatineau and receiving treatment from both Gatineau and Ottawa has been a largely positive experience.
– The Quality of life in Quebec is not better than Ontario and this is mainly from politics ( author should also mention bad politics and government policies in Quebec, Medical wait times, number of fatal accidents in Quebec ….)
– In terms of house prices if you live in Quebec for 25 years and the same for Ontario. You will make more money in Ontario even if you paid higher mortgage. That is a fact!
– If you are married your house income will be increased with time > 150000$
– Gas prices in Quebec are higher (at least 5 cent/liter), otherwise u need to drive to Ottawa.
– property tax in Aylmer is more expensive than Ottawa
– Car insurance in Ontario will decrease with time while Quebec Tax stay the same or increase.
In conclusion: If you are buying one house and planning to live 25 years+ then move to Ontario, otherwise get kids in Quebec and when they get older move back to Ontario when your salary grows.
– The Quality of life in Quebec is not better than Ontario and this is mainly from politics ( author should also mention bad politics and government policies in Quebec, Medical wait times, number of fatal accidents in Quebec ….)
Nowhere in my article do I talk about such a subjective topic such as “quality of life”. I believe the quality of one’s life is directly controlled by their own actions. I have lived both in Ottawa and Gatineau and I’ve never had a complaint about the quality of life in either place. These are the very arguments that people convince themselves of when trying to make a decision and it happens way too frequently.
In terms of politics, since the last separation election, they are pretty much uneventful.
Medical wait times are similar both in Ottawa and Gatineau. Believe me, with a son with Autism, a wife who nearly died from a blood clot in her leg and a back injury, I have plenty of doctor and hospital visits in both provinces to use as a comparison. In fact, with a bit of driving they are practically non-existant within a 30 minute drive to outlying hospitals in Shawville (15 minute wait time) or Buckingham (30 minute wait time).
– If you are married your house income will be increased with time > 150000$
While this is possible, this is not always true. Even when true, depending upon a family’s situation (children, etc.) financial results will vary.
– Gas prices in Quebec are higher (at least 5 cent/liter), otherwise u need to drive to Ottawa.
Absolutely agreed. The average household purchases 1,820 litres of gas per year. That is a cost difference of $91 per year. Is a financial decision of this magnitude worth making a decision based on a $91 differential, assuming you purchase all of your gas in Gatineau?
– Property tax in Aylmer is more expensive than Ottawa
Across the board property taxes are significantly less expensive in Aylmer, Hull and Gatineau than in Ottawa for the same square footage. Please provide me with a comparison with tangible examples that proves otherwise. My house is 2,800 square feet on a half-acre lot and has property taxes of $3,060 / year with no condo fees. If you don’t mind, please scan and post your property tax bill, I will do the same and we can present them online as an unbiased comparison for readers of this blog.
– Car insurance in Ontario will decrease with time while Quebec Tax stay the same or increase.
Are you comparing car insurance costs versus taxation? Are you trying to predict the trend of these costs in the future? Even economists are unable to reliably predict this. Please don’t tell me this is what you are doing, you are harming the credibility of your claims by doing so.
In conclusion: If you are buying one house and planning to live 25 years+ then move to Ontario, otherwise get kids in Quebec and when they get older move back to Ontario when your salary grows.
Unfortunately a conclusion is not merely that simple. I have helped hundreds of individuals to assess their specific situations and a majority of the percentage of my readers would readily disagree with your conclusion. There is much more consideration that is necessary, including both financial and personal elements.
I urge everyone to make their own decision based upon their own situations. My analyses have been done based on non-subjective items that can be quantified.
Thank you for taking the time to post your comments. I sincerely appreciate it.
Brent lets make this simple!! The Quebec government won’t give you lower child care, lower insurance and lower electricity for nothing. They know and can calculate!! They need to get the money somewhere. Anyone mentioned sales tax 14.5%? Most people above ignored it. At the end the government need to balance there budget…
Moe, I agree that all government bodies must budget to avoid running a deficit (which would ultimately be unsustainable for the long-term).
The electricity costs are lower due to the fact that Quebec produces electricity themselves, whereas Ontario must purchase their electricity and then mark it up.
The lower insurance costs are a result of the subsidization of the no-fault tolerance run by the government of Quebec. Insurance companies carry less risk and therefore are able to charge lower rates while safely maintaining their profit margins due to this.
Sales taxes are higher in Quebec than Ontario, which can be avoided by shopping in Ottawa, or if the average Gatineau citizen spends $15,600 / year in Quebec would pay $234.00 more in sales tax on their purchases if they had made these purchases in Ontario.
Thank you for bringing up these additional points for consideration.
-LOL The funny thing is that you keep referring Ottawa for shopping, groceries, gas and medical treatment. You should Edit you article to live in Ottawa sleep in Quebec 🙂
-AND WHY YOUR COMPANY’S LOCATION IS IN OTTAWA NOT IN GATINEAU????????? TO AVOID TAXES???? AS I SEE AMPLIFIED INVESTMENTS IS LOCATED IN OTTAWA :), DON’T YOU SAVE WATER BILL, HYDRO, GAS and CHEAPER INSURANCE in GATINEAU?
On the contrary, I’ve identified the negligible cost differences for both gas and sales tax and how insignificant it is compared to the difference in cost of living. Should I choose to buy all my items in Quebec, it would only cost me an additional $234 more in sales tax per year. Should I choose to buy all of my gas in Quebec, it would only cost me an additional $91 more each year. Both of these figures are insignificant when comparing the cost of living difference between Gatineau and Ottawa.
I never discussed groceries whatsoever in either province, you are mistaken.
In terms of medical treatment, I merely identified that the quality and availability in both provinces are similar and easy to obtain.
Finally, when considering the opening of a company there are several additional and unrelated considerations to be made concerning optimal location. This topic is entirely unrelated to the topic of this blog.
Hello, thanks fornthe article, I’ve shared these views with many people in the past also since I believe for many it is cheaper to live on the Gatineau side. However you might want to verify the cost of a house in Gatineau (even Aylmer), as they are not as cheap as you claim! You cannot buy a house of over 2,000 sq.ft. for much less than $400,000 especially if you have a goof size land.
Thank you.
Real estate costs have been appreciating quickly in Gatineau and as a result these calculations will vary from time to time. That being said, based on a present search there are currently dozens of properties with 4 or more bedrooms, 2 or more bathrooms for sale well below the $300K mark.
http://bit.ly/1qWvmVX – 1,633 sq. feet, 6 bedrooms, 3 bathrooms – $207,000
http://bit.ly/1mZIOrY – 1,624 sq. feet, 5 bedrooms, 2 bathrooms – $243,300
http://bit.ly/1myEmPM – 1,770 sq. feet, 4 bedrooms, 2 bathrooms – $261,900
http://bit.ly/1qy9Sg3 – 1,422 sq. feet, 4 bedrooms, 2 bathrooms – $289,900
http://bit.ly/1oTXWUE – 1,634 sq. feet, 6 bedrooms, 2 bathrooms – $207,000
In fact there are more than 100 additional listings that contain 3 or more bedrooms, 2 or more bathrooms for sub-$300K price range: http://bit.ly/1tFv0qe
Of course, if you want to buy a brand new house, in a prestigious area, that contains 2,000 sq. feet or higher; your results will differ. This principal is true in any city, of any province. My blog makes assessments based up on the averages so that it applies to the scenarios being considered by the majority of the blog readers.
It’s important for everyone to consider their specific situation, desires and perform a financial comparison based upon their own situation at hand.
Thank you for your feedback. I sincerely appreciate your input.
Hi,
I just meant for the size of the home and of the land you cannot get them at that price. Of course if it’s about 1,600 sq.ft. and a small land it’s cheaper and if it’s much older and needs renovations.
Thanks.
Hi,
someone emailed your link to me thinking I would like it.. They know me well I guess. 😉
Had this same discussion many times.
Some things I didn’t see (or noticed) being mentioned are the following:
1. Alymer, over the past decade or more, is hot and prime. It boomed a decade ago and is still booming. Booming so fast in fact that it out-paced gatineau’s ability to give water to Alymer. That fast. Think it was around 2008-2010 (somewhere inbetween) where they had to spend a summer of construction to be able to furnish the water to Alymer. High rate of construction there. What was selling for under $200k, when I moved in the area, is now $300k. Hot place that will get hotter with young people and young families.
2. From everything I read, the boom is from young Ontario couples fleeing the higher expenses of living in or around Ottawa (or Ontario).
3. Been an bilingual-anglo kaybecker all my life (moved to the area a decade ago). Someone above mentioned people have to learn French. A new language! Meh. In the area there are many anglo only people (alymer more so), and the french population also work in “english Ontario”. The language issue is nill. Just the odd biggotry (lack of a better word) from both sides, be it French or English. Non-issue.
4. Moe mentioned grocieries. Yeah some things are cheaper in Ontario (if on sale). But not a heck of a lot. The new “border town” thing going on now is quite the opposite. Ontario people now shop for groceries across the river. This has been steadily happening for the better part of 8 years now (that I know of). Even the Ontario people next door to me and across the street from me swear they no longer buy groceries there anymore due to it being more expensive. May as well mention that the Costco parking lot (which is huge) is all Ontario license plates. I think they come for more than just the cheap beer 😉
Junk food, laundry soap, pet food, and any other taxable items are all tax-free on Saturdays at Maxi (excluding alcohol and tobacco). One see’s ON lic. plates on that day in that parking lot as well. But nothing like Costco’s 90% ON plates.
5. Gatineau hospital: When I moved to this area 11 years ago people used to tell me, “if you get chest pains get to Ottawa fast”. Always thought that was a joke… Till it happened. It is no joke, and Mr. Brent don’t even try to play it down. Gat hospital and it’s second rate doctors are an issue that even the Gov of Quebec knows of and is trying to fix. Don’t ever go there if you can avoid it. And don’t take it like a joke like I did when people told me the same.
People who move here will wait a decade for a family doctor (8 yrs now for me, 9 for the guy across the street, and I’m on the “priority list”). Meanwhile the Quebec gov sends out cards telling people to go to some apple tree clinic in Ottawa. You pay, then the gov reimburses you after the paper work (x-rays not covered 100% (or at all), and other things will/may not be covered).
Gat is a big problem when it comes to health care. Older people may want to make serious note of that.
In the Ottawa Citizen 4-5 years ago, as they were discussing this very same topic, they warned the young people moving to Alymer not to change or leave their family doctor in Ottawa.
That is the ony negative there is to the area really. And it’s especially a big one for older people.
Other than that, if you want to actually travel to MTL (as some people above mentioned) it’s all tax deductible. The millage, lunch/meals, if you need to stay at a hotel etc. Forms exist for this very thing, but maybe not many people know it. 811 (Info-Sante, QC medical hotline) is a free call and they can tell you about it.
No offence, but, Quebec poutine, bagels, smoked meat, pizza and beer is just so much more better tasting. 😉 Just don’t have your heart attack here.
7. The commute: It isn’t bad as Mr. Brent stated. Except when it snows, as someone else stated. And why is that? Ontario does not require drivers to have winter tires by law like Quebec does. So most all accidents, or people going very slow, or sliding on the road are none other than the non-winter tire people.
So, hey, maybe this needs to be an added expense you forgot to mention about living in Alymer, QC. Mandatory winter tires. 400$ to 1200$ per 3/years or so depending on car.
However, there is none of this mandatory car inspection, or exhaust inspection, milking fee like there is in Ontario. So another savings there.
8. Gat mountains.
9. Pet owners: Vet’s are less expensive on this side of the river as well. One also gets better service for a heart attack at the vet than at Gat hospital. Very serious pet situations requiring MRI/CAT scans require you going to Ottawa.
Alymer = big boom for young families who need and want to save money (the doctor warning is no joke). All of which, in addition to this blog post, is documented fact.
Alymer is known as the English section, though there is english in great numbers all over Gatineau due to A) the great number of people that work for the feds in Ottawa, and B) all the young Ottawa families moving here to be able to afford their dream of being a home owner (and actually being able to pay the electric bill every month).
I get the feeling that a few years down the road Alymer is going to be the priciest area around. Right now it’s affordable and still in boom as it has been for almost a decade now. Very hot area for young Ottawa couples.
Thumbs up to Mr. Brent for this blog post. Good sound advice (minus a point though for underplaying the serious lack of qualified and available medical care on the Quebec side).
Cheers.
Thank you for all of your detailed feedback Tony. Granted I haven’t had a heart attack, so for the medical issues we’ve had to date both Gatineau and Ottawa have been very pleasant to deal with.
That being said I’ve experienced long wait times (more than 3 hours) at both the hospital in Hull and the hospital on Carling in Ottawa (Civic campus). Living in Aylmer myself if I don’t feel like waiting I often choose to drive to Shawville. It takes a half an hour to drive there but I’m typically seen within less than a half an hour; that’s still favourable compared to other options in Gatineau or Ottawa. Because the Gatineau sector is far from the Aylmer sector (more than a 30 minute drive) I’ve never experienced the services at the Gatineau hospital itself, thank you for the feedback. As for family doctors, because I’ve had one in Ottawa for more than a decade, I have limited experience in this area on the Quebec side.
One of the items you’ve brought up that is noteworthy is the fact that real estate values are appreciating quicker in Aylmer than in many areas of Ottawa. This offers both pros and cons – today the cost of living is still lower on the Gatineau side, but in 5-10 years as real estate continues to appreciate, the situation may change. At the same time, those who currently own in Gatineau, especially in Aylmer, are likely to enjoy higher appreciation than their Ottawa neighbours. Granted, I don’t try to predict the future, as there’s no real way to know, I can only make calculated guesses based upon the trends of the previous years.
Thanks again for taking the time to provide such detailed feedback and discuss many topics that my blog doesn’t cover.
It would interesting to see data on home price appreciation over the last 10, 15 and 20 years for Ottawa versus Gatineau which could easily offset a cheaper mortgage over the long run.
quick math results in a huge variance in favor of the city with 4% appreciation versus 2.5% appreciation using a 5% reinvestment rate on interest savings. Approximately $557,000 value gap over 20 years in favor of more expensive housing market with 1.5% greater price appreciation. Assuming housing prices of $650k and $300k.
These statistics are regularly published in the Canadian Real Estate Wealth magazine. The statistics show a slightly higher appreciation for Ottawa over the last five years (3.98% in Ottawa versus 3.71% in Gatineau). The CREA statistics (http://www.crea.ca/statistics) and the MLS Home Price index (http://homepriceindex.ca/) also reflects this. Unfortunately, it is well known that history doesn’t always repeat itself and any decisions made based upon the past would be purely speculation. This is the reason that financial analysts shy away from trying to predict these very numbers; they are often incorrect and it carries consequences to their long-term reputation.
The marginal differences in appreciation are not significant enough to be noteworthy in comparison to the dramatic real estate cost differences. If you were to purchase lower cost real estate in Gatineau and invest those savings in the stock market which has experienced a historical average return of 10.1% (7.8% adjusted for inflation) over the last 50 years, you could earn much more than the increased appreciation would ever deliver. These impacts have been discussed and mathematically analyzed in comments above, if you are interested please take a look.
I have to disagree. There is still a $198k value gap even if both homes appreciate at 2.5% over 20 years (and this is excluding leverage which multiplies your equity growth) with all other assumptions above the same. The only equalizer is if the Gatineau home owner earns 8% compound annual on interest rate savings which is highly unlikely. This is just a pure financial view. Let me know if my math doesn’t work out.
But you’ve forgotten to identify that in your example an individual will pay out of pocket for that additional value.
Let’s take two people, Bob and Jennifer. Bob buys a $650,000 house in Ottawa and Jennifer buys a $300,000 house in Gatineau.
Let’s look at what each individual pays out of pocket each and every month.
Bob
Jennifer
In this scenario Bob has paid $552,321 more out of pocket than Jennifer to earn the additional appreciation of $298,880 (the difference between Bob’s appreciation of $555,064 and Jennifer’s appreciation of $256,183). That is a very poor return on investment over a duration of 25 years! It’s even worse if Jennifer invests the monthly savings she has as a result of purchasing a more affordable house into the stock market and earns 7.8% (10.1% adjusted for inflation) based on the stock market average over the last 50 years. Let’s see how much additional cash she would have on hand:
In this scenario Jennifer would have a house worth $556,183.20 and $1,691,052.59 in cash. Jennifer paid $473,418 in principal plus interest and has assets on hand worth $2,247,235.79, a 474.6% return on investment.
In this scenario Bob would have a house worth $1,205,064. Bob paid $1,025.739 in principal plus interest, a 17.48% return on investment. Over a duration of 25 years that’s a horrible return on investment!
…and this is just the tip of the iceberg! The higher cost house comes along with higher property taxes, higher electricity costs, water bills and numerous other expenses… all things considered Bob’s return on investment is most definitely negative!
I teach the startup entrepreneurs that I mentor that a residence is a liability and not an asset for a number of reasons. While it appreciates in value, after all expenses are considered, it is typically a poor investment. Even once paid off, a house carries ongoing costs for a homeowner (property taxes, bills, etc.). Knowing the difference between an asset and a liability is a powerful tool. If you wish to read this blog, take a look: Your House is a Liability (Not an Asset)
Thank you for your feedback and detailed insight. I sincerely appreciate it.
Brent,
I’m not a money guru type person. Far from it. I could even use some help. I’m investment dumb to be honest.
However a couple of posts here had me thinking. It’s a little off topic slightly.
First off, what you stated above about Alymer/Gatineau (or some/most area’s of Gatineau) are not segregated by income class is true. I have two millionaires as neighbours.
Both have “investment properties”, or rather multi-dwelling units that they rent out. One has a couple of apartment buildings in Ottawa (millionaire by property value that he wants to get rid of for his retirement), the other is another self made millionaire with a few apartment buildings left in Hull (lower income area) that he is already selling off while in retirement. This one turned a few triplexes (or quadplexes) into room rentals for students. he has 4 or so students per flat.
Renting by room he pulls in the same revenue (or a bit more) as one of the Ottawa buildings the other guy has by charging each student ~400$/month. So rent wise, I think the Hull buildings come out ahead by a bit.
I have heard some friends talk about starting something like this on the Gatineau side since they can’t afford buying on the Ottawa side.
Do you think this type of “investment property” is worth it? Wise? Just has me curious. Would you also do this on the Gat side?
Hi Tony! While it may seem off topic for this particular post, it’s most certainly not off topic for this blog in general.
Before we get started, full disclosure: I own 18 real estate investment units in Aylmer.
Investment real estate in Gatineau is much more attractive than in Ottawa. The reasons for this are the same very reasons that you identified:
– One can purchase a newer, higher-end triplex in Gatineau (Aylmer sector) for $300-350K; in Ottawa triplexes are 75-150% more expensive for the same profile (triplex, newer, higher-end)
– Even though a triplex in Gatineau (Aylmer sector) is 75-150% less expensive, it still collects 75-85% of the rental income that it’s Ottawa-equivalent would, thereby making it possible to obtain a cashflow positive rental income even with only 15-20% down on the property, this is virtually impossible in Ottawa.
– Because real estate in Gatineau (Aylmer sector) is so much less expensive it enables an investor to target newer, higher-end units that attract a tenant profile that rarely has a difficult time paying their rent; thereby making it easier to succeed, even for newer investors while they learn the ins and outs of investing.
– Because real estate in Gatineau (Aylmer sector) is so much less expensive a real estate investor is able to purchase more multiplexes than they would be able to in Ottawa. With $100K of equity in an individuals home they could easily acquire $500K in real estate. In Gatineau (Aylmer sector) this would typically cover the down payment and closing costs of a both a newer high-end triplex and a newer-high end duplex. In Ottawa this would acquire an older lower-end triplex if an investor is lucky. In the first case an investor has higher odds of cashflow from 5 solid tenants; in the second case the investor has higher odds of earning cashflow from 3 tenants with average / sub-average payment history. Furthermore when there is a vacancy, the investor with real estate in Gatineau is missing 20% of their revenue (1 out of 5 units) whereas the investor with real estate in Ottawa is missing 33% of their revenue (1 out of 3 units). These differences offer the investor with real estate in Gatineau a much higher chance of success over the investor with real estate in Ottawa.
While I’ve provided you with a few of the considerations, the list goes on and on… this really is the tip of the iceberg. I hope this gives you a lot to think about and helps you on your path to attaining financial freedom. If you wish, don’t be shy, feel free to send me an email. Maybe we can go for a coffee sometime.
Hi,
Thanks for the insight. I have to admit you broke it down in pretty simple terms (and it jives with what my neghbours basically said as well).
I’m slowly picking the brains of my neighbours who have done this and are, or are about to retire and sell off.
One thing I have noticed though between these two MDU owners is that when the Ottawa MDU has someone moving out he doesn’t fill it as fast as the Gatineau MDU owner. The Gat guy has people calling all the time and he can basically pick who he takes (and he does do that). The Ottawa owner not so much. I’ve seen him go 3 months with no takers. Mind you, each of them cater to a different type of person/renter as stated in the previous post.
TY for the offer to meet up.. It most definitely is something in the back of my mind, and something i’ve been thinking of for a little while now. If anything progresses from this point on, I may indeed drop you an Email.
Cheers.
Hi Tony! My pleasure, I’m very happy to have helped.
Don’t worry if it takes you time to become comfortable with these concepts. Despite having owned my own business (unrelated to the real estate industry) for 15 years, it took me 9 years of real estate investment courses before I finally felt confident enough to pull the trigger and buy my first investment property. While the courses were extremely helpful (I was overqualified with experience when I bought my first), I now realize that had I pulled the trigger just 4-5 years earlier, my net worth would be double today!
In terms of vacancies, when I have a vacancy in Gatineau (Aylmer sector) I get several inquiries a week, and typically rent them within 30-60 days. The primary methods in which I market them is via Kijiji ($30 for a featured post, and I always feature my posts because it makes all the difference and it’s a small expense compared to sitting on vacant property).
When the time is right, feel free to reach out and we can go for coffee. I promise you no hidden agenda whatsoever, just a chance to talk about our collective interests.
Thanks again for your feedback.
You have to also consider that the money spent on a home in Ottawa is not pissed into the wind. You are acquiring an asset. So, while the payments are higher, you are building yourself a larger nest egg. The money is not gone, just tied up for awhile.
But you’ve forgotten to identify that in your example an individual will pay out of pocket for that additional value.
Let’s take two people, Bob and Jennifer. Bob buys a $650,000 house in Ottawa and Jennifer buys a $300,000 house in Gatineau.
Let’s look at what each individual pays out of pocket each and every month.
Bob
Jennifer
In this scenario Bob has paid $552,321 more out of pocket than Jennifer to earn the additional appreciation of $298,880 (the difference between Bob’s appreciation of $555,064 and Jennifer’s appreciation of $256,183). That is a very poor return on investment over a duration of 25 years! It’s even worse if Jennifer invests the monthly savings she has as a result of purchasing a more affordable house into the stock market and earns 7.8% (10.1% adjusted for inflation) based on the stock market average over the last 50 years. Let’s see how much additional cash she would have on hand:
In this scenario Jennifer would have a house worth $556,183.20 and $1,691,052.59 in cash. Jennifer paid $473,418 in principal plus interest and has assets on hand worth $2,247,235.79, a 474.6% return on investment.
In this scenario Bob would have a house worth $1,205,064. Bob paid $1,025.739 in principal plus interest, a 17.48% return on investment. Over a duration of 25 years that’s a horrible return on investment!
…and this is just the tip of the iceberg! The higher cost house comes along with higher property taxes, higher electricity costs, water bills and numerous other expenses… all things considered Bob’s return on investment is most definitely negative!
I teach the startup entrepreneurs that I mentor that a residence is a liability and not an asset for a number of reasons. While it appreciates in value, after all expenses are considered, it is typically a poor investment. Even once paid off, a house carries ongoing costs for a homeowner (property taxes, bills, etc.). Knowing the difference between an asset and a liability is a powerful tool. If you wish to read this blog, take a look: Your House is a Liability (Not an Asset)
Thank you for your feedback and detailed insight. I sincerely appreciate it.
Brent, I’m planning to buy my first home in the Ottawa area in the next year, so thank you very much for taking the time to write the analysis, which is the best one I’ve found through google.
Your example of the two hypothetical home-buyers is excellent and shows how a frugal, disciplined and diligent investor can come out well ahead in the long run by buying on the Gatineau side (or in general, buying for much less than what they can comfortably afford).
I think in practice very few people take this approach — if they believe they can afford a 650K home, they will probably buy something in that ballpark. So the choice may be between a fixer upper in the Glebe and a grand forest retreat in Chelsea. If they think they can afford 300K, the choice may be between a larger detached home in Gatineau and something much more modest and/or suburban on the Ontario side. If more people could come to appreciate the impact of buying only what you need and investing the difference, we’d be a richer country (with a much higher savings rate!)
Cheers.
Hey George,
Thank you for your feedback. I am very happy that you found it useful and informative.
Having mentored hundreds of entrepreneurs to date, I can confirm that you are most people take the non-frugal consumeristic approach of buying in the upper echelon of what banks are willing to approve them for in terms of financing.
Society and the media have played a large role in these misconceptions, metaphorically associating happiness with physical possessions. Buying only what one needs and investing the rest is a significantly shorter path to financial freedom. From my experience it’s not done as a sacrifice, quite the contrary actually, it creates a much happier and less stressful path as well.
Best of luck on your house hunting 🙂
Sincerely,
Brent
Brent,
Interesting read, and lots of interesting comments and discussion. You can certainly distinguish the emotionally-based arguments from the analytic ones. To that, I will just say, if someone reading this does not want to live in Quebec as a matter of gut feeling, then they should not. In purchasing a home or settling down, even if the numbers crunch, you have to stay true to your gut feelings, and somebody pointing out the financial flaws of that choice does not mean you made the wrong choice for you unless you have completely over-leveraged yourself in doing so.
I hopped over to Aylmer in 2004 for all the reasons listed above, along with the fact that I was 24 years old buying a house on an entry level government salary and a wife still in school. I really couldn’t afford to consider staying in the greenbelt unless I downsized significantly from the terrace home we were renting in Barrhaven, or we continued to rent. Interest rates lead us to buy.
Now it’s 2015, we are mired in a fairly cold winter even for this region, traffic has seemed worse this year, and it looks like my wife is going to finally follow through on the yearly threat of making us put the house on the market to find our home we will stay in until we retire. We are now reopening this discussion based upon our updated situation. We have one toddler-aged kid, all of us have a great family doctor in Quebec, we have no ongoing medical issues that need attention, and when we have we have lucked out that the departments we have needed to see in Gatineau are doing a great job getting us in (maternity, ultrasound, etc). Combined, I expect our 2015 return to show an income around $170-$190k this year. I would be interested in answers/updates in a few areas:
First, simple one, is your $150k threshold household or personal?
Second, why choose to compare 650k in Ottawa to 300k in Aylmer? That seems to be the widest margin of comparison and would show the most favorable results for Aylmer. It might be more interesting to show the same exercise closer to the 50% market difference than the 100%. While harder to potentially do, the specific comparison I am trying to make now is to stay in Aylmer because I enjoy the proximity to downtown, Westboro, Little Italy, etc or move to a community on the Ontario side that would give me a similar proximity to those areas (our current candidates are Alta-Vista, Pleasant Park areas, or heading up into New Edinburgh).
Lastly, with the new Gatineau property tax roll having just been sent to all of us, I would be interested to see what impact that had. I know my new assessed amount (to be phased in for tax purposes by 2017) seemed higher than expected. I even wonder if they maybe went too high on the assessment, but that’s potentially another topic for another time, but while only measured in the short term, I wonder if Gatineau isn’t potentially closing the gap rapidly with the tightening up of the mortgage rules (25 years, difficulty to get 0% down) that would make more expensive Ontario homes less attainable for those that borrow to their maximum.
Hmm, there’s a lot there, so I’ll cut it at that, but great find and relevant topic to me right now as we have been wanting to move regardless of the economy, interest rates are lining up well, and an increased demand for entry level homes in Aylmer could help with the perceived issues of longer time to sell on our side of the river.
Hey Tom,
Even though this blog only focuses on the tangible aspects of the choice, the subjective matters have been intentionally left out because they differ from person to person. Nobody should make a decision based purely on financials, but at the same time, nobody should ignore them altogether.
The reason $300K was used is it was an example of my home. A 2,800 sq. foot home 4+1 bedroom, 2 bathroom, 2 living room, finished basement on a half-acre lot in the heart of Aylmer on Vanier Street. The least expensive equivalent I was able to find on the Ottawa side was $650K and required significant work. Presently my home is appraised at $365K (a 21% appreciation) which is in line with the appreciation experienced in Ottawa over the same period of time.
In the last year since my article was posted, the financials haven’t much changed much:
Of course you need to perform your own assessment based upon what you are buying in Ottawa. Many of your preferred areas carry dramatically different costs (e.g. Alta-Vista ranges from $515K-885K, Pleasant Park has a much wider range depending on what you are looking for, or heading up into New Edinburgh ranges from $479K-740K). Also, don’t forget that when you move you will experience significant one-time costs (e.g. realtor commission: $8K-12K, land-transfer tax: $3-5K, legal fees: $2-3K, intial repairs and customizations $1-3K, utilities setup $1K, etc.). This one-time cost typically totals $15-25K in post-tax dollars, or $20-33K in pre-tax dollars.
In terms of your question re: the $150K it’s based upon household income, and is an estimation based upon 100 calculated scenarios using houses of similar size, features and proximity. If you want to compare apples-to-apples, it is always best to pick a house on the Ottawa side and run through the numbers, comparing the financials to your own. No two scenarios are exactly the same. Also you don’t want to forget the one-time cost of moving.
Still, you’re entirely correct, this only considers the financials and not the intangibles such as your desire to live in a different neighbourhood. At the end of the day, only you can make the choice that is best for yourself. Best of luck and keep me posted on your choice. If you wish, I’d appreciate you sharing the financial difference if you do move.
Thanks for the reply. I should clarify that I am with you on the math, sorry if it was read otherwise. I was more seeing how you felt the math was holding up and I had a couple specific questions of which you answered some of. In general, looks like your analysis holds up based on the evidence you showed.
Now I can understand how you selected your example, and there is no disputing how the math worked out for your own personal situation. I think I would still recommend to stick to the averages from the Canadian Real Estate’s Association for the calculations as it provides a more objective basis of comparison. You sort of alluded to the fact the $650k wasn’t a full equivalent by pointing out that it needed a lot of work. Sorry, I am being a bit nitpicky, but the mathemetician/scientist in me can’t help but to offer a recommendation on a way to represent the math more objectively – math, that I should reiterate, I agree with.
As for the point on moving expenses, since my personal example was based in an assumption that we are moving (either to a new place in Aylmer, or over to Ottawa), I treat those as a constant. Personally, when I crunch the numbers I tend to attack it twice. First step: Does it make sense financially for us to move. Second step: where is it most advantageous for us to move, which is a combination of a financial spreadsheet and an intangibles list.
I suspect my income/situation puts me on the line of tossing a coin on which side of the river I land assuming I am looking at equivalent properties on both sides, hence why I asked if in our example you felt the $150k was a personal threashold, a household threshold, or yes. Now that I sat and thought about it, I can see the absurdity of trying to state that definitively as the income split in a household is too variable, and would be a fairly complex formula to work out.
Anyway, keep up the good work, neighbour!
Hey Tom,
Thanks for your additional feedback.
You are correct that it’s not simply that trivial, because from a salary perspective it’s quite easy to determine that on average a $150,000 income will pay $7,071 more in taxes by living in Quebec vs. Ontario (reference for calculations http://bit.ly/RLVw04) but all of the other choices are not so easily calculated (e.g. real estate costs, child care costs, transportation costs, etc.). Because all of these other choices need to be taken into consideration it’s best to perform the calculations based upon your situation.
Understandable that you’d want to compare averages, especially since you’re a mathematician like I am so let’s delve into it. Let’s use the Canadian Real Estate’s Association averages, using a 50% difference to compare (knowing that Aylmer vs Kanata is a 44.6% difference on average; Aylmer vs. Orleans is a 53% difference on average).
Assumptions:
Salary: $150,000
Real estate: $300K Aylmer vs. $450K Kanata / Orleans
Mortgage term: 25 year mortgage
Average interest rate: 3.6%.
Aylmer
Income taxes paid: $55,627
Mortgage payments: $18,264 ($1,522 monthly)
Kanata / Orleans
Income taxes paid: $48,556
Mortgage payments: $27,384 ($2,282 monthly)
Difference:
In this comparison, your cost of living for income taxes and real estate is $2,049 more expensive living in Ottawa vs. Gatineau ($75,940 Kanata / Orleans income taxes & mortgage payments – $73,891 Aylmer income taxes & mortgage payments). This excludes all other financial considerations (down payment, child care, property taxes, transportation costs, etc.)
$150,000 in annual salary is the point at which it starts to make (financial) sense to live in Ottawa vs. Gatineau (so long as you don’t choose an area with real estate costs that exceed 50% higher than that of in Gatineau). The moment that you buy an Ottawa property that creeps up to 60% / 70% / 80% more than the equivalent option in Gatineau, you have a much bigger gap on your hands and it is likely more beneficial (from a financial perspective alone) to live on the Gatineau side.
I hope this is what you were looking for in terms of an average analysis. Thank you very much for your additional feedback.
This guy is a joke…. Health care in Quebec is absolutely terrible, property taxes in Quebec are much higher than Ontario and you can compare a university in Quebec with one in Ontario, if I were to take a career as a teacher in Quebec my initial salary would be around $35,000 a year while in Ontario it would be about $50,000 . Same thing aplplies to doctors, police officers, firefighters and the list goes on. I have lived in both provinces and definitely Ottawa is the place to be. If you live in Gatineau and have to take the 50 east to go to Ottawa for work, well you better be on your way before 6am otherwise you are going to be stuck in traffic for a while. Once in winter time it took me almost 3 hrs to go to work.
Thanks for your opinions and feedback.
From my personal experiences to date, having a son with Autism, a wife who recently recovered from a blood clot in her leg, and recently experiencing a back injury myself; we’ve had no challenges receiving regular and expeditious medical care both in Ottawa and Gatineau.
On the topic of family doctors, although we live in Gatineau, our family doctor is in Ottawa at the Smythe Medical Centre. We have regular check-ups and are quickly seen when we have concerns. We also don’t pay for out of province services, as our family doctor bills Quebec directly.
In summary, from our experiences to date we’ve got very little to complain about from a medical perspective. Living in Gatineau and receiving treatment from both Gatineau and Ottawa has been a largely positive experience.
My property taxes for a house in Aylmer, which is 2,800 sq. feet on a half acre lot is $3,060 / year. This is significantly less than any property in Ottawa of equivalent size.
I don’t know how the salaries differ based upon where you go to school, but my post has nothing to do with this. It is discussing the cost of living on both sides. Regardless I took my 3 year computer science program at Heritage College in Hull, Quebec along with 30 other graduating colleagues and we are all paid comparably to anyone with similar education on the Ontario side.
In terms of travel, I don’t know travel times using the 50 east highway since I live in the Aylmer sector, but from my sector to Ottawa West (near IKEA) each day I leave at 7:20am and arrive at work at 7:50am in the winter (and that includes a 2 minute detour to drop my son off at school). If you want tangible evidence I encourage you to take a look at Google Maps with real-time traffic any day (Monday thru Friday) and route from Aylmer on chemin Vanier to Ottawa, near IKEA.
I live in Plateau de la Montagne on a tiny piece of land and I paid $3,600 municipal tax and $700 school tax. I work in Ottawa with new home mostly in Greely and Manotick and the more you invest the more you get in return. Buying a house in Gatineau/Hull/Aylmer won’t give you the capital gains that a property in Ottawa will give you. I paid $204,000 for first house in Ottawa in 2004 for years later I sold it for $280,0000 in a week (no renovations just a fresh coat of paint) now try to do the same with a house in the Gatineau area and then tell me how it went… My current house is now for sale after some time of serious math…. Numbers don’t lie!.
Your property taxes are higher in that area than mine are. Mine are $3,060 which includes both property and school taxes.
You’ve clearly made up your mind that appreciation in Ottawa is outpacing that of Gatineau. I’m not interested in arguing it, just pick up the Canadian Real Estate Wealth magazine that’s released monthly with new numbers and if you disagree, take up the argument with them. I’ve compared appreciation rates in both Gatineau and Ottawa for 2012, 2013 and 2014 ongoing and the difference is approximately 0.2%.
In terms of your example whereby you bought a place in Ottawa for $204,000 and sold it four years later for $280,000 represents an ~11% compounded annual return. You won’t see these numbers again in Ottawa for a long time as these numbers have both normalized back to historical averages and equalized with appreciation averages of that in the Gatineau area.
Of course you can spend more money and in turn earn more appreciation (3% of appreciation on $300,000 is worth more than 3% appreciation on $200,000), however those additional gains come at the expense of a higher mortgage payment each month with more monies going towards mortgage interest. There are also examples of this above in the ~100 comments discussed a few times over.
Real estate investing offers much more lucrative returns for buy and hold vs. the buy / renovate / flip in the long-term because every time you buy and sell you lose a considerable amount of money as a result of lawyer fees, utility fees, land transfer taxes, realtor fees, etc. On top of that there’s an even worse expense which is paying capital gains taxes over and over again. The other main cost is paying off a mortgage while you do the renovations and there’s no tenant revenue to offset the expense. In a buy and hold strategy all of these fees are avoided and/or delayed in favour of a steady appreciation of real estate values combined with the steady mortgage paydown by your tenants all while earning a positive monthly cashflow (if you’ve done your homework correctly and bought a cashflow generating property). Couple these benefits with the fact that you can legally deprecate your investment real estate at a pace of 4% per year to offset taxes on what would be capital gains and you can top your trifecta off with a cherry on top!
There is much much more to these calculations and you are correct, math doesn’t lie. I’ve been investing in real estate for 5 years after taking 9 years of real estate investing courses. I own 18 properties and have earned greater than $1 million in equity as a result of these efforts. I mentor a dozen investors and 30 startups; I’m not just touting subjective information to prove my points, I can back them up with numbers.
Good day Brent,
I have read your article (also the one about a house being a liability), all the comments and your replies to them. I must say that it is very rare that I find people who think as I do. Everyone of my friends, or most of them, have these huge houses that come with extraordinary monthly mortgage payments. They are all trying to encourage me to buy a big single family home while I have been looking at a freehold townhouse
Now aside from the tax differences between living in Ottawa vs living in Gatineau, I have a slightly different question. I have found a home in Gatineau that I am interested in purchasing. I could pick up this home for slightly less than 200K. My question for you is, would it be a ‘smart’ or ‘good’ idea to purchase this home in cash? Or should I just rent?
I have been working overseas and have saved a bit of money during my time as an expat. I have more money than I care to leave in the bank and at the moment I am not quite sure what I want to do with it. The only thing that I am sure of is that I don’t want to leave it in the bank. Buying the house cash will not break me, as I will still have quite a bit left to invest.
My dilemma is that I don’t want to take a mortgage. Even though this may be the more investment savvy way to go, I don’t want to owe anything to anyone, which allows me the freedom to basically choose what I would like to do with my life. This of course is in addition to the fact that after one is done paying off a mortgage, the house is usually valued at the same price as what has been paid in, if lucky. Banks are not, after all, charitable organizations.
Best regards,
Hi Johnny,
First of all, a huge congratulations on the financial stability that you’ve achieved. In today’s day and age, where 95%+ of people spend as much as they earn (if not more) while saving little to none for the future, you have earned yourself an incredible amount of freedom and peace of mind.
From a purely financial perspective it would likely be best to purchase the house with only a down payment and carry a mortgage while investing the funds you would have spent on the house in other investment avenues (whether it’s real estate, index funds, etc.) because investments in the stock market have historically averaged 10.1% annually (or 7.8% adjusted for inflation) and real estate offers even further upside potential due to the fact that even though real estate only averages a 3-5% appreciation per year, you also enjoy the benefit of your tenant(s) paying down the mortgage and (if you do it right) earn positive cashflow each and every month on top. Furthermore, by buying an investment where you only paid 5-20% down, you earn appreciation on the full value of the asset (e.g. 3-5% of a $200,000 asset would earn you $6,000-$10,000 per year; whereas if you purchased it with 5% down you only paid $10,000 thereby earning you a 60-100% ROI per year [disclaimer: this calculation is simplified, I know there are additional fees to purchase real estate, this is done for simplicity sakes]).
That being said, there’s a lot of comfort in not owing anything on your home and it also ensures that you won’t have any interest expenses. Assuming over the next 25 years you will experience an average of 4.5% interest (a complete guess) this essentially guarantees that you will receive a return on investment of approx. 50% higher than the average inflation rate of ~3%.
This is a very personal choice and it depends on a number of factors that are very personal to you. Depending upon your risk threshold and/or your goals in the next 5-10-15 years, you will need to make the decision that’s best for you. Without an extensive discussion in order to understand your present situation, your short & long term goals, your risk profile and your values in life, it would be irresponsible for me to make a blanket recommendation. That being said, leaving your monies in savings and not earning a return on investment while inflation increases the cost of living you’re essentially losing money, so I agree with you that it is in your best interest to make some decisions. If you wish to discuss further please reach out to me and we can have a call.
Cheers,
Brent
Hi Brent,
Thank you for your detailed and honest response. I really appreciate your viewpoint. I would definitely like to give you a call to further discuss my present situation. How should I get in touch with you? By telephone, Skype, email?
Best,
Send me an email to brent@amplifiedinvestments.com and we’ll coordinate the best time/method to chat.
Hello all.
Hello Brent.
I want to recognize that all comments are great and that I totally agree that all cases are unique.
I would really appreciate your guidance.
I have a job in Montreal but I am confident a job opportunity in Ottawa will go to a happy end soon. I am a fairly new immigrant (5 years ago) and I do rent an apartment in Montreal. I’d rent again in either Ottawa or Gatineau, but this time, I’d try to rent a house instead of an apartment.
Which would you think is the best option for me? ON or QC side?
We are a family of 4. So far, it is only me who is working (I am considering an income of 86k). I have two kids (6-8 years old) who I want to attend the best school possible (public). I’d say that this fact would drive my decision on where to live, as I feel that generally speaking good schools are in good neighborhoods (or am I wrong?)
Work would be in Downtown Ottawa.
Besides the clear differences in taxes, car insurance, etc, Which do you think would be the implications from a child-assistance point of view?
When it comes to the financial analysis, this is a fairly easy one. Earning $86K you will pay $4,689 more income taxes living in Gatineau ($25,090 Quebec vs. $20,184 Ontario; minus $216.94 Quebec abatement). This means if you can find a rental unit of equivalent size in Ottawa for no more than $390.76 higher rent per month than in Gatineau, you’ll be ahead financially by living in Ottawa (assuming no other factors).
But you’ve identified that you have two children (6 and 8 years old) so you also will wish to factor in the cost of after-school daycare if you will be using these features. The cost in Gatineau would be $7 / day whereas the cost in Ottawa would be $20-25 / day so this could result in savings of $260 – $360 / month (assuming 20 school days each month). Obvious other considerations if you want to perform a complete analysis would be to call your insurance company and compare the cost difference for car & renter’s insurance. Also note that if you rent in a unit where you pay utilities, hydro is 30% less expensive in Gatineau than in Ottawa and there’s no water bills so this will save you an additional $75-100 / month as well.
Regardless of where you live, if you work downtown chances are you will prefer to take public transportation to avoid the costly parking (which averages $150 – $250 / month in addition to the $120+ / month you would likely spend on gas) and take advantage of the public transit speed lanes.
In terms of best school, I’d have to say that both Ottawa and Gatineau have great schools so the only consideration I’d ask you to make is whether or not you want your children to be in bilingual school or not. French education on the Quebec side is 200-300% better for obvious reasons and if multilingualism is a priority for your children then this should weigh into your consideration.
The bottom line is that this is a very personal choice and you need to make the decision that is best for you – personally, professionally and financially. I hope that I’ve given you enough information to help with your decision, but if you’d like to discuss further please feel free to reach out.
Congratulations on the (pending) new job and all the best! 🙂
Cheers,
Brent
Hi Brent, loved the discussion you started here and appreciate all the reader comments and experiences! I am re-locating to Ottawa from the Barrie market. I own a home in Barrie and not planning to sell it. I am looking at condos in Ottawa & Gatineau. The quality of residence for the money in Gatineau blows away Ottawa. In terms of principal residence, I will be working between Ottawa and Toronto, and will spend time in both properties through the year. Is it accurate that I could buy in Gatineau and still maintain my principal residence in Barrie and avoid the increased tax in Quebec. Would love to hear your thoughts!
Gord.
Hi Gord,
In order to answer your question it’s best that we take a look at the Canadian principal residence rules (more info: 1 | 2 | 3 ). There are many useful resources online for this, but, it’s always best to double check the rules with an accountant. Most online resources identify that you can designate which would be your primary residence and this would enable you to maintain your income tax in Ontario while also owning a second residence in Quebec. This appears it would be the best of both worlds (significantly lower real estate costs without any impact on your taxation). Also note that since you do pay capital gains taxes on non-primary residences, this also works out in your favor since the sale price of the property is likely to be lower in Gatineau vs. Barrie when you do eventually sell; this will result in a lower capital taxation burden. Please verify the accuracy of my research with an accountant before finalizing your decision. Congrats!
Hi,
I am currently running numbers on buying a house and am leaning towards buying in Aylmer. How do I calculate property taxes? It’s hard to find information to put into my spreadsheet, but the author seems to have a source that I hope he can share. I’m comparing house prices between Aylmer and Orleans/Ottawa, income tax, property tax, and everything else I can work into my model. However, I can’t find any hard numbers for property tax for Gatineau/Aylmer. The City of Ottawa has an estimator online, which is handy, but no such thing exists (as far as I can tell) for Gatineau/Aylmer. Any info would be appreciated.
As an example, I am looking for a house in the $250,000 range, and it appears we can get more for that price in Aylmer than Ottawa. For a similar house, we are looking at $300,000+ in Orleans. Assuming those prices, what would the relative property taxes be?
Hey Ian,
There are a number of sources, but the most current source is to check on Realtor.ca where the property & school taxes are listed for each property for sale in Aylmer. Take the time to search and find a property that matches the similar profile to the one you are seeking out to determine the approximate taxes for comparison. In the price range of $250-350K you’re likely looking at $2,500 – $3,500 in combined property + school taxes (depending on the build quality, type of house, size of land, etc.).
I hope this helps!
Cheers,
Brent
Good afternoon,
It was nice to read up on this. As a Quebec Resident (and have been all my life), working in Ottawa, I have made the decision to sell my home in Gatineau and move to Ottawa. NOT because I find it expensive to live in Gatineau whatsoever – au contraire. I own a $175,000 three bedroom townhome with a large yard, I don’t pay much for electricity, house insurance or my car. A house the same size in Ottawa is about $250,000 and I am aware that I will have to pay for water, more for my car insurance and my house insurance. Aside from the atrocious taxes for being an Ontario worker living on the Quebec side, here’s why I am deciding to move. The lifestyle in Gatineau is poor. I am bilingual, however, I feel more comfortable speaking, writing and reading in English, and I feel that this is not accepted in Gatineau (yet). Everyone is so against Anglophones. This of course is my personal opinion, but I am sure most people in my situation would agree with me. My neighbors refuse to talk to me, because I prefer to speak in English. Second, the healthcare system in Gatineau is TERRIBLE. The average wait time at a HOSPITAL is 48 hours. Ridiculous! The average wait time for a REFERAL from your doctor is 3 YEARS. I just got a call a few months ago to set up an appointment for a condition/issue I had back in 2010… That’s right, 2010, people! My health matters! I also am not very fond of the education system. Brent, you say the commute is about 25 minutes from Quebec to Ontario and I have totally disagree with you. It is about an hour for me and I work from 7 am to 3 pm – not even 9-5 hours, which is worse. It takes about 25 minutes if there would be no traffic at all, which of course, is never the case. I would much rather live in Ottawa and drive 5 minutes to get home, get proper healthcare, be seen at hospitals in reasonable timeframe and live in a BILINGUAL-accepted city. Yes, day care is cheaper, yes, insurance is cheaper, but over all, your quality of life is cheaper, too. That being said, it’s not always about saving more money, it’s about being happy where you live. I think in the long run, the pros and cons of Gatineau vs. Ottawa outweigh each other. Where you get to save in Gatineau, you miss out on other things – such as proper healthcare, living a nice social life – and where you pay more in Ottawa, you get proper health care and enjoy your surroundings more. The longer commute, health downfall and poor closed-minded attitude is not worth my quality of life. 🙂
Hey Isabelle,
Thank you for your feedback and insightful thoughts. Congrats on the new home purchase as well. Every situation is unique and no decision is ever purely about money. That would be a one-dimensional decision approach to life.
Luckily for me, I live in the Aylmer area of Gatineau and am surrounded by English-speaking neighbours. I’m also a 2 minute walking distance to four parks as I live on Vanier between two schools (South Hull & Arc En Ciel), so we can walk to the parks regularly which has helped me to get to know dozens (or likely hundreds) of neighbours, most of which are either bilingual or English speaking as well.
I drop my son off at school at 7:10am and head to work in the west end of Ottawa near IKEA and I usually arrive by 7:45am (last week I was there by 7:30am due to March Break; when there’s a snow storm it’s not unusual to arrive after 8am). Obviously this depends on what section of Gatineau you live in and what section of Ottawa you work in. If I worked downtown or lived in the Gatineau sector of Gatineau my situation and timing would be entirely different.
As for healthcare, I’ve had a family doctor in Ottawa for more than a decade and a team of specialists at La Ressource in Hull for my son who has Autism, ADHD and a birth defect called collaboma in his eyes (he can see fine; but typically children with this defect are visually blind and their retinas are detached; we are lucky). I’m not sure I understand your point re: 48 hour wait. I’ve been to emergency at the Hull, Gatineau & Shawville hospitals approximately 8 times in the last 10 years and the longest I waited was 5 hours. Are you referring to some other sort of wait, can you clarify?
Regardless of what I say, I’m not trying to defend my article. As I said before, everyone’s situation is unique and it’s absolutely not “all about money”. My blog and articles are financially-focused to help those who are less financially savvy to learn how to assess the financial aspect so that they can make a fully informed decision. I am in no way trying to criticize anyone’s decisions. This is a very personal choice and all aspects must be considered to make the “right decision” for the person/people who are performing the considerations.
Once again, thank you for your feedback and thoughtful input. I sincerely appreciate it.
Cheers,
Brent
Very interesting blog. I once asked myself this question about 10 years ago and I’m very glad I decided to stay in Kanata. I my opinion might be biased but I can say the same since you are affiliated with an Aylmer investment firm. To start off, Quebec is the largest recipient of equalization payments “($7.833 billion)” therefore they are the most broke and provide nothing to the rest of the country.
My Commute time from Kanata to Hull – 30min. No big deal there. Ease of Resale doesn’t get any easier. Used Homes averaging $450K in our neighborhood sell within a month or 2. We paid $320K for ours and 8 years later it’s valued at $450K. House prices vary depending on one’s expectations but I noticed that most homes in Aylmer don’t even come with a garage. In Ottawa, a double garage is almost expected! As for Hospitals. This is where I get really annoyed! Quebec is too cheap to invest in health care so now our Ottawa hospitals are FLOODED with Quebecers CHEO is a great example! Also, Quebec is TERRIBLE at maintaining their roads. Perhaps we pay more for daycare but I think the quality is far better than the subsidized system in Quebec. First, you need to be put on a list the day you find out your due date and you’re lucky if you’ll even get a spot. If you are lucky and get a spot the guardian to kid ratio is terrible! Then there’s the whole Charter of the French Language thing that you have to deal with! Beware of the French Police!!
Thank you for taking the time to provide your feedback. I sincerely appreciate it. Your response is the perfect example of only looking at one side of the comparison. Many of your comments are subjective, irrelevant and outright false and you didn’t take the opportunity to compare both sides. Your response is also highly emotionally charged (e.g. “beware of the French police”) which leads me to believe that there’s more behind your feedback. Nonetheless, I appreciate you taking the time to read and comment on the blog.
False. We’re located in Ottawa, Ontario and we have investment properties in Ontario, Quebec, Florida and the Caribbean. We buy properties where it makes sense financially. If a property doesn’t generate positive cashflow then it would be a poor investment choice for our long-term strategy.
False. I’m not even sure how you could think this was true. Most single family homes have an enlarged single car garage or a double car garage. Even many row houses have a single garage separating them.
Subjective & irrelevant. This statement is subjective and has nothing to do with whether or not it is cheaper to buy in Ottawa, Ontario or Gatineau, Quebec.
Irrelevant. Of course they are. The reason that a children’s hospital wasn’t built in Gatineau was a decision by the federal government since it is funded federally, not provincially. It would be more expensive for taxpayers to maintain two separate children’s hospitals with very little geographical distance apart.
Subjective. My commute time from Aylmer to Ottawa West (near Ikea) is 25 minutes most days. In the winter when it snows it can reach 45 minutes.
Subjective. We’ve got lots of experience with this both in Ottawa and Gatineau. Our average selling duration is 56 days in Gatineau.
Subjective. I bought my current home 7 years ago (in 2007) for $215,000 and just recently had it appraised at $435,000. Appreciation has been almost on par for the last decade in Gatineau and Ottawa; with a slightly above average rate in Aylmer for the last 5 years. You can quickly validate the accuracy of my claim by picking up a copy of Canadian Real Estate Wealth magazine.
Subjective. I’ve driven on horrible roads both in Gatineau and Ottawa.
Subjective. My experience has been extremely positive in Quebec. Even without subsidized daycare I paid $20 / child / day and because my son has Autism and ADHD the government ensured that he was provided with specialized learning materials to help with his education. Of course, once I waited the 5 months for subsidized daycare my costs reduced to $7 / child / day.
Subjective. Once again, this is a subjective and prejudice comment. It discredits your statements and shows how emotionally charged your comments are. I’ve been living here over a decade, never talked French in my life and I haven’t had a single problem with a police officer or an individual to date.
Cheers,
Brent
I did not see anyone mention the fact Gatineau does not add fluoride to its water supply while Ottawa does. For those who care of course about that. Filtration costs money. Moving soon from Montreal to Ottawa and may just end up in Gatineau for this reason.
Thanks for your input Carole. I did not know this. I also found an article that cites the same.
Interesting article…
Brent, thanks for writing this article.
I have lived in Aylmer for the past 10 years and I am currently exploring the decision to move to Ottawa, so I made my own calculations and arrived at a result similar to yours, even though we disagree on a couple of points.
However, I have a question that you could clear up for me: when you say “an individual earns more than $150,000”, could you apply this to family income? So if a married couple earns $75,000 each, they would be above your threshold? If not, did you ever calculate a “family” threshold?
Thanks,
Luigi
Hey Luigi,
The calculations included in this article are for a single individual, however, at $150,000 combined income is when I recommend assessing your own personal situation and determining whether Gatineau or Ottawa is more financially favorable.
Start out by comparing the costs that typically differ the most between Ottawa and Gatineau:
– Income taxes (how to calculate)
– Real estate cost
– Property taxes
– Electricity
– Water
– Child daycare (if you have children)
There are other minor cost differences, but the ones cited above are the major ones and will give you a solid indication of the best choice for you. Once you’ve done so, I’d appreciate if you post your findings here for further discussion.
very informative, however, I read this and thought it was quite valid: http://www.dorislaw.com/?PGID=13&ARID=240
One possible conclusion is that even though the Gatineau resident pays more in terms of income tax, and that it will cost more to the Ottawa resident in the purchase of his residence, the latter always have the possibility to recover the difference when he will sell his residence while the Gatineau resident will never receive that difference since it was paid to Revenue Quebec. Indeed, when is that last time the Quebec government issued a generosity cheque to its constituents?
Hi virgcm,
Thank you so much for your feedback and insight. I sincerely appreciate it as it makes for a magnificent assessment piece. Let’s take a look at what is really happening here by comparing apples to apples.
Mortgage terms (for assessment purposes)
————–
Morgage duration: 25 years
Average annual interest rate: 4%
Ottawa
——-
Mortgage: $650,000
Monthly payment: $3,419.13
Total payments: $1,025,739
Interest paid: $121,019.85
Value after 25 years (3.71% compounded annually): $1,658,475
Return: $632,736 ($1,658.475 minus $1,025,739.00)
Gatineau
——
Mortgage: $300,000
Monthly payment: $1,578.06
Total payments: $473,418
Interest paid: $55,855.35
Value after 25 years (3.71% compounded annually): $719,145.02
Return: $245,727.02 ($719,145.02 minus $473,418)
What’s the conclusion? Yes, if you spend more on a house in Ontario you will earn more in appreciation, however, you will also pay more each and every month both in principal and interest. Your return percentages aren’t more impressive, instead you’re out of pocket $552,321 in additional funds, the difference between total payments between Ottawa and Gatineau purchases ($1,025,739 minus $473,418).
It is important to recognize that both assets appreciate at an average of 3.71% – 3.98% which is less than half of the 10.1% (7.8% adjusted for inflation) returns the stock market has averaged over the last 50 years. This is even less than 30% of the returns you can anticipate if you invest in cashflow-generating real estate (rental properties).
What you’ve done there is convince yourself that your house is an asset when in fact it is not, your house is a liability. Instead if you purchase a more modest home and divert all of these savings to an investment that provides you with higher returns (once again, average returns based on the market) you could have a much higher. Let’s see what happens if you buy a $300,000 home and divert those savings of $1,841.07 monthly ($22,092.84 annually) into a better income producing asset and earn an average return (using 7.8% so that we’ve adjusted for inflation):
If you lived in Gatineau and spent the exact same monthly as you would in Ottawa, but instead diverted those saved funds towards an average investment you would end up with a house paid off valued at $719,145.02 *and* $1,691,052.59 in investments which with no additional effort will continue to earn you $131,902.10 each year moving forward (7.8% annually adjusted for inflation). This is an eye opener for most, but this is accurate and this is why I’ll be able to retire in 3 years on my 40th birthday. I chose to spend less on my liability (my house) so that I could save and invest more in my assets (stocks & real estate). The results seem magical, but they are not, it’s merely leveraging the power of compounding numbers in math.
I hope this is insightful for you and helps you to make whichever informed decision is best for you. Best of luck and thanks again for your feedback.
this is interesting indeed. something to consider.
Going forward with the new daycare rates being adjusted to the family’s income, as of April 2015, are you of the opinion that it would be beneficial for a $150k household income to send their child to private daycare? we have 1 child in a subsidized spot currently and another on the way, which I believe means we do not qualify for the $8K federal tax deduction. Thoughts?
I work at the Ottawa Hospital and we are no longer accepting ANY Quebec patients who cannot get the care in their own community or hospital. The only Quebec patients we will take now are emergency visit (you HAVE to by law) and specialty cases that cannot be dealt with in Montreal, Gatineau, Hull…etc. I am personally moving to Ottawa – tired of the commute from Aylmer to Ottawa East (General Hospital) minimum 1 hour drive at 7:00 in the morning.
Also – a detached home in Aylmer right now is going for approx $300,000 and up. I am personally selling my semi-detached home for $227,000 based on comparable sales in the area within 12 months. Gatineau is one of the lower priced areas because of the lack of accessibility to the area and extremely high traffic wait times in and out of the area.
My 2 cents, thanks for engaging everyone in this conversation!
Thanks for letting me know about the hospitals. Although I am able to get physiotherapy, surgery for my back & help for my son’s Autism I still haven’t been informed of these changes. In fact, this week, we have two follow-up appointments in Ottawa for my son and I.
Aylmer to Ottawa East is a longer commute each day, but, unfortunately just as long if you buy in Ottawa in an area not nearby your workplace due to the crazy traffic on the Queensway each and every morning & evening during rush hours. I suspect you won’t save much time at all on your commute unless you live nearby your workplace. Once you do move, I’d sincerely appreciate it if you could come back to the blog and post the outcome.
You are correct about detached home prices, although there still is a significant range in prices depending upon age, location & accompanying size of land. Pricing in Ottawa for the equivalent (when all three criteria are the same) are still 50%+ higher unless you live 30+ minutes outside of the city. Once you do purchase a new home, I also invite you to post these numbers for transparent, non-subjective comparison.
Thanks for your feedback; I sincerely appreciate it.
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salary: 55k before taxes
single, no plans on kids
situation 1:
duplex in gatineau: 165k
equivalent in ottawa: 275k
rent income(not included in salary): 2 BR
gatineau: 600 – 650
ottawa: 800-900
which one would I better off financially?
over the long run which would be cheaper?
In terms of income taxes you will pay $3,018 more by living in Quebec.
Ontario: $10,128
Quebec: $13,110
Based on your numbers listed you will earn $2,400 – $3,000 more rental income by living in Ontario.
Ontario: $9,600 – $10,800
Quebec: $7,200 – $7,800
But in terms of mortgage you will pay $6,943.56 more by living in Ontario (assuming average of 4% mortgage rate over the duration of 25 years).
Ontario: $17,358.72 ($1,446.56 x 12)
Quebec: $10,415.16 ($867.93 x 12)
Based on these quick calculations, assuming no other savings (hydro, property taxes, daycare and automotive insurance are significantly cheaper in Quebec), you still come out ahead living in Quebec by $925.56 – $1,525.56.
If you account for hydro, property tax and automotive insurance savings you will easily save an additional $2,000 – $2,500 by living in Quebec. If you have one or more children (I know you said you don’t plan on any) you would easily save a whopping $5,000+ / year / child ($100+ / week / child) in daycare costs in on top of the above mentioned savings.
Also don’t forget to consider if you have tenant vacancies (typically 6-10% of the time) and also consider the fact that you may some day wish to live without renting to a tenant in the future (essentially losing that income).
Hi Brent,
Thank you for this blog. It’s been very informative.
My situation is this:
My fiance and I are getting married this December. We were thinking of buying a condo in the Nepean area, so we decided to move into the condo building to experience it firsthand for ourselves before buying; glad we did! We have decided not to go the condo route, too many unexpected expenses.
We are now thinking of buying a 3 bedroom townhome, hopefully within the $250,000 to $300,000 price range in the Ottawa west area. Going through your blog has got me thinking of including Alymer as an option since it isn’t too far from Ottawa west.
However, because of how big a decision buying a house is, my principle is to experience the neighbourhood firsthand before actually buying.
So my question is at what point is renting a viable option?
I.e. We intend to have a baby in 2017 and our gross income might exceed $150,000 in 5 years time.
Thanks,
Hi Obie,
My pleasure, I’m glad that you’ve enjoyed the info and discussion in this blog. I sincerely appreciate the amount of consideration you are putting into your purchase, because, the single quickest way to lose money in real estate is to go through the buy/sell cycle quickly due to the overhead expenses (realtor expenses, land transfer taxes, lawyer expenses, etc.). For this reason, the due diligence that you are doing now will deliver huge savings later.
As for your question, what point is renting a viable option? You should always rent until you’ve chosen a location that you are certain that you want to live. Try to seek out landlords that are willing to provide a shorter-term rental, a 3 or 6 month term should give you sufficient time to make an informed decision, if you can rent month-to-month then go that route as well.
As for your finances in 2017, you know that you will pay $7,071 more in taxes by living in Gatineau when you earn ~$150K. Now you will need to compare how much savings you will have on your real estate purchase should you choose to buy in Gatineau to make an informed decision. Also, don’t forget to consider childcare savings in Gatineau vs. Ottawa ($7 – 20 / day vs. $35 – 55 / day) and after school daycare expenses (~$8 / day vs. $20 + / day) once your child starts school.
Congrats on the next step! Best of luck and let me know if you have any additional questions.
Cheers,
Brent
Hello thank you for answering my post above
I am planning to move to quebec side next year
and will be targeting duplex/triplexes
just a quick question from investment point of view
what combination of actions will be most beneficial in terms of financial advantage in your opinion? under assumption I will be moving in as an owner occupied
1) 25 year amortization vs 35 year?
25 year = less interest paid on mortgage on house overall
35 year = more cashflow to potential buy future properties, however taxed at quebec rates it will be much higher
2) CHMC backed downpayment 5-10% vs 20%
5-10% – I would have more money to reinvest into other properties
20% – I will pay less over all on the house
Thanks
The numbers you have cited aren’t readily available for investors in Canada. The terms you mentioned, 5% down, is reserved for only primary and secondary residence. Because you are owner occupied you may qualify for 5% down over 30 years which is my preferred approach for primary residence.
But if it ends up being classified by lenders as an investment, banks require 35% down for investment properties; private lenders require 15-25% (15% for commercial; 20%+ for residential depending upon appraisal). Neither lender in Canada will presently consider mortgages that exceed 30 year terms.
Banks and private lenders are also left to their own discretion as to when they’ll approve a mortgage, and often times they will require you to have CMHC insurance even if you put 20% down. Last month three private lenders informed my investment team that they would require 35% down in order to approve a financing term without mandating CMHC insurance. Again, if your property is classified as your primary residence, you could put 25% down to avoid CMHC insurance but if your plan is to free up cashflow for future investments then I would advise simply leveraging CMHC and putting the bare minimum down.
If you can obtain the rates you discussed, it will still boil down to the numbers, your long-term strategy and your approach. Having a property financed over a longer duration and requiring CMHC insurance because of a lower down payment will leave more monies available for additional investments, but it lowers your “loan to value ratios” or how much equity you have in your investment properties as well, which makes it tougher to gain future approvals since lenders want to ensure that you have a reasonable % of skin in the game at all times so that their risks are limited.
Without the numbers and an in-depth understanding of your net worth and cashflow, it would be irresponsible to give you any sort of recommendation at this time.
Hi Brent,
Very interesting insight throughout!
My case is kind of an oddball situation. I currently live in Sudbury Ontario in a 2 bedroom apartment. I am 60 years old and work in Nunavik (dception bay) Quebec (fly in). I make roughly 130,000.00 at Raglan mine and make an additional 20-25 thousand in commercial mining photography. My 2 sisters live in Kanata and Stitsville. I have 2 children that live in Sudbury. One of them is re-locating to Ottawa permanently for work. I am considering living in either Ottawa (2 bedroom condo) or in gatineau-Aylmer. I currently have to drive 4 hours to get from Sudbury to Rouyn-Noranda, to ctch the company jet to fly north. If I were in the Ottawa region, I would have to drive to Dorval in Montreal. (2 hours or so). What should I consider?
Actually it’s not that complex at all.
If you live in Ontario you’ll save $6,593 on income taxes so if the house you plan to buy on the Quebec side is $549.42 / month less (or higher) than the option in Ontario, then your best bet is Quebec.
(reference for calculations: http://bit.ly/RLVw04)
Ontario: $38,227 income taxes
Quebec: $44,820 income taxes
As for your commercial mining photography income, it’s tax rate depends how that is paid (e.g. through a corporation, as dividends, as “other income”).
As for your children (or child who is relocating), since they are working, it is my assumption that they are older and will offer you no further savings in terms of child care costs so no comparison is necessary in terms of cost difference between provinces.
Hope that helps! Good luck with the move 🙂
Cheers,
Brent
For 200K you can buy very nice house in Gatineau, 10-12 km from downtown Ottawa. On the Ottawa side, those houses coast at least 400k. Even if family pays more in taxes, let’s say 9K more monthly, for 25 years as much you pay mortgage difference is 225k. That’s about same price that someone pay right away. Plus, let’s say that trough that 25 years you will have 10K yearly cheaper daycare, property tax, water 0$, car insurance, and maybe some other thing. Plus, for me, Gatineau is much more pretty and more with all this rivers, parks, small bungalows, and big streets. If we decide to stay and work and live in Ottawa, 3+ bungalow with big yard in Gatineau for me is always better then some semidetached or townhouses in Kanata, Nepean, Orleans or even further from downtown.
,
Hi Brent,
Great blog. I randomly stumbled upon it while searching statistics on Canadian cities. I landed on your post about Ottawa vs. Gatineau and found it quite interesting -so much that I read through all the comments (insightful info).
While I do not live in either Gatineau or Ottawa, I had previously considered moving from Montreal to Ontario (close to the ON-QC), due to my desire to move out of the city and the possibility of paying less on income taxes. Being able to work from home while still reporting to Montreal, I saw this as an opportunity.
In the end, I decided to buy my first house in the suburbs of Montreal as the savings on the general expenses such as my mortgage, hydro, insurance, utility and cellphone bills weighed more than the savings on taxes.
This is rather out of subject, but it is just to mention that you bring some great points, and do it in a manner that is extremely easy to comprehend. I appreciate your approach on budgeting (spending less and saving more) as it is one I try to use myself.
I am planning on buying a multi unit once I’ve completed a course on real estate investment this year.
For now, I try to invest what I save in the stock markets until I am ready to buy real estate. Any good reads on either subject you know about that you can recommend? At 27, I know how to work for someone but I only started learning how invest for myself.
I am glad I found your blog. Seems like there is a handful of great content on here. I will definitely read your other posts. I hope you continue sharing.
I don’t know where you get your info but a 2400 sq ft home in gatineau for that amount of money is not possible to buy unless it’s in Anger or Masson and not near Ottawa… And a house in the plateau in Gatineau (hull) is around 350k $ for 1500 sq ft semi detached home !!!!
Thank you for your comments Luc. This article was written two years ago and the pricing has definitely changed in the last two years, but the cost of living when comparing Gatineau vs. Ottawa remain at a similar ratio (as costs have also increased in Ottawa at a similar pace).
While you have chosen one example of a semi-detached at $350K in the Plateau in Gatineau (Hull), you can get a 2,100 sq. foot single-family house with 6 bedrooms, 2 bathrooms for $350K in Aylmer (http://bit.ly/2bETZXd). This house comes with central air, a gas fireplace, a nice pool, stainless steel appliances, a luxurious tub and a nice private yard.
This is not the only example. A quick search of Realtor.ca for properties in Aylmer with 5+ bedrooms and 2+ bathrooms under the price of $400K show that there are 36 active listings that meet this criteria. Extend your search to Hull and Gatineau and the number grows even more. Even taking the higher end cost and comparing it to the equivalent in Ottawa reveals a dramatic cost difference that adds thousands to annual mortgages in Ottawa equivalents when compared to Gatineau.
Thank you once again for your feedback.
I used to live in the Quebec side for years , I had “zero” access to a family doctor and I got refused to see a doctor in all the walking clinics because I wasn’t one of their patients. That was ridiculous. When I moved to Ontario, I got my family doctor within a month. In my opinion the 50 000$ more that I paid for buying a condo (for the equivalent you can buy on the Quebec side) is worth it. I calculated with the about 5000$ a year I will save in income taxes, in 10 years , I will get my 50 000$ back. I also don’t pay more for Hydro since most of the property in Ontario uses natural gaz and it happens to be also way more efficient if I compare to my house in Quebec, it was heated with electric baseboards. The only advantage I would see is if you need day care for your kids. Overall, I would say, If you can afford to buy in Ontario, I think it’s best long term alternative.
Getting a family doctor in Quebec can be a challenge. We actually got our family doctor in Ontario and they accept Quebec patients and bill the Quebec govt. It took 6 hours of phone calls on a couple of occasions but it was well worth the one-time work.
Everyone has to make the decision that is best for themselves. Every scenario is different. My analyses is performed based on the average equivalent houses in both Ottawa and Gatineau. For condos the difference in price is still approximately the same percentage of difference, however, because the $ value is lower than the average house cost, it may work out to be equal (I can’t confirm as I would need all numbers and I could run an unbiased analysis).
In terms of heating costs, if you are comparing electricity vs. gas, then you are not comparing apples to apples. That being said since you were in a condo, it was not feasible for you to upgrade from electricity heating to gas heating (or at least I do not think it would have been).
Thank you for your feedback.
c’est vrai que c’est hors de prix sur Ottawa, je vis près de la rivière, au pire déménager dans le vieux hull mais j’ai pas envie de me taper les ponts matins et soirs et Gatineau, beuuarrk c’est d’une laideur pour moi, excusez moi pour ceux qui y vivent.
Je vis entre hitonburg et westborow, je suis à deux pas des remick rapids et du marché de parkdale, j’adore cet endroit.
Are real estate contracts commonly done in english in Gatineau? What happens if the buyer is only comfortable working in english, and the seller is only comfortable working in french? Do they make a bilingual contract?
As an anglophone currently considering making the move across the river, I’m wondering how this might work should I encounter this situation. Would I just blindly trust my notary and/or agent if I had to sign a french contract (and vice-versa for the seller)?
The contracts are boilerplate and can be done in either language. You can have the exact English equivalent side-by-side for comparison.
Is OHIP premiums calculated into the equation? Are there health insurance premiums in Quebec? There is a 750$ OHIP premium that reeks havoc on the equation if it’s not considered for those with the >72,000$ income bracket.
OHIP premiums are not calculated into the equation. Quebec has a similar premium of approximately $700 per year (double for married / common wealth couples where neither have coverage) to obtain coverage from the Government, however it’s only charged for those who do not have any form of health coverage.
From a military perspective then, this plays a huge part in the equation. Thank you for the reply. I just broke even over 150,000$ family income with no kids. (350k house in Gat vs 450k house in Kanata).
My pleasure Josee. Thank you for your comments.
I am delighted with this conversation as my wife and I are planning to move to Ottawa/Gatineau. The one factor that has not been discussed is the French language. This is what worries my wife and I about living in Gatineau. We are planning to have kids and if we live in Gatineau we will have to send them to French school. Although I love French I would like my kids to have an impecable English since its the world’s business language.
What are your thoughts in this?
Hi Juan. Presently, I live in the Aylmer sector of Gatineau. I am somewhat bilingual, however, my French is weak. The population is 60% French and 40% English, and nearly every local business will serve English-speaking customers in English. Occasionally, when there is an employee who cannot speak English, he/she will simply find another employee to help me. To date I have yet to have an issue, or unpleasant experience. I would recommend you try staying in a hotel for a week, or simply traveling to Gatineau for a few days to experience interactions yourself, so that you can make an informed decision. I hope this helps.
I am a USA citizen, I am happy I found your article, I have been working in getting my professional license in Ontario. All requirements have been mostly completed and hopefully I will get my license early 2018 and move to Canada under NAFTA. I was thinking moving to Ottawa, but after reading your article I have changed my mind. Theoretically I will be working in Ontario and living in Quebec, I am bilingual, I am planning to attend college in Ottawa to pursue a second M.A. I was counting with the very affordable rates for College in Ottawa, but if I live in Quebec, would I have to pay much more for College in Ottawa? I appreciate your response.
While I am not certain, it is my understanding that you won’t pay any additional funds living in Quebec and going to university in Ontario. Many, many Quebec residents go to Ottawa U and Carleton U and it is very easy to move to Ottawa (15 minute drive away); if it was that much more affordable, it is my assumption that Quebec residents would move to Ontario in droves and that isn’t happening.
Glad to read this post and the discussions. Very helpful. I have a following question. Since the stock market has a higher return rate (on average) than the mortgage rate, is it a good idea to use the mortgage as large as possible and put my own money into the stock market? Thank you.
Thanks for your comment Wong. In principal, it is a good idea, however it does carry some risks. For this reason, I wrote a blog that discusses the risks and rewards of using home equity to invest in the stock market. You can read the blog here: Should I Use My Home Equity for Investing? Discussing the Risks and Rewards
Brent, I thank you very much for blogging this, I have been going back and forth about buying in Gatineau where I have rented for the past 3 years, my household income is 120K with 2 kids and they have refused to attend daycare( before and after school programs) but I love that fact that if they want to, it only cost me 7$/day. For those disputing that 7$ daycare is irrelevant I’d like to say that you cannot be further from the truth. I had my first child in Ottawa and had my baby name on the daycare waiting list while pregnant and ended up getting called for day care spot by the time she was 1.8 yrs old. It would be the same scenario in Quebec, you simply have to put the baby name on the list the day after you find out you are pregnant and voila. One thing Quebec offers that Ottawa does not is the choice to keep your kids in daycare while being a stay at home either still on maternity leave with another baby, recovering from PPD ect.
I am not the greatest at math but I can tell you that I have gotten my employee to deduct an extra 100$ each pay on my paycheck and at the end of the year, whatever I get back from ottawa, i put into my quebec tax and end up having to pay 2k at most. The money we get to keep monthly allows for a much better quality of life which in ottawa I’d be slaving away to have a decent life post bill payment and mortgages.
@Brent, considering that this post was written in 2014, what would you change? I am also looking at investing in a multiplex in quebec. Also are you still retiring at 41 ( 2 years)?
When you look back at all the investement you have made in Quebec real eastate,what would you do differently?
Thank you
Hi Sheilla,
Sorry for the slow reply, for some reason this message got caught in spam. I retired from my full-time position early, at the age of 39, however, I am still performing consulting to keep busy. To me, retirement is working because I want to work and not because I need to work.
As for things that I’d change, the numbers have adjusted over the last five years, however, the results still remain largely true. Each scenario needs to be compared, but I’ve still yet to come across a property in Ottawa (with equivalent type of house, # of rooms, age of house, etc.) that doesn’t end up resulting in a considerably more expensive cost of living as Gatineau/Aylmer.
As for investing in multiplexes in Quebec, I have many in Aylmer and they are performing phenomenally. As long as you perform your due diligence and don’t take too much risk, there are plenty of positive-cashflow attractive opportunities available.
Cheers,
Brent
Hi Brent,
Thanks for doing this.
My partner and I are first time home buyers and are looking for a house in the Ottawa area.
Our combined income is $104k and we intend to have 1 kid in 3 to 5 years.
We are thinking of buying a house either in Aylmer for $300k or in Ontario for $400k.
we have 5% for the down-payment either way.
What’s your advice?
Hi George,
Enclosed is the financials for you to make an informed decision. I realize that there still are personal factors that need to be taken into consideration when making your decision. Hopefully, this helps.
Income tax comparison (reference)
– Aylmer ($104K): $34,698
– Ottawa ($104K): $29,299 (savings of $5,399/year)
Mortgage comparison (reference)
– Aylmer ($300K house; $285K mortgage @ 3.07% / 25 years): $1,359 monthly; $16,308 annually (savings of $6,588/year)
– Ottawa ($400K; $380K mortgage @ 3.07% / 25 years): $1,908 monthly; $22,896 annually
Based on income tax and mortgage alone, you would save $1,189/year by living in Quebec, however, the real savings will be on other things, and once you add them in you’ll be saving a lot more.
Savings each year:
– Hydro: $1,000 – $1,500 savings/year in Aylmer (lower cost of hydro, lower cost of delivery fees)
– Property tax: $1,000 – $2,000 savings/year in Aylmer (lower cost of house, lower property taxes)
– Hot water: $500 – $1,000 savings/year in Aylmer (no water bill)
– Car insurance: $500 – $1,000 savings/year in Aylmer (depending on insurance value of vehicle)
Other savings in three to five years:
Childcare (1 child, 240 days a year @ $7 a day vs. $35 a day): $6,720 savings/year.
With this said, you could anticipate a savings of $3,500 – $6,000 / year for the first few years and $10,000 – $13,000 each year after you’ve had a child who is in daycare / after-school programs.
There are other savings that you can realize, however they aren’t as noticeable.
Cheers,
Brent
Hi Brent,
Thank you for the insightful comments and follow-up responses to people’s questions. The latter really does help the reader get a very in-depth understanding of this common decision facing a lot of new home buyers.
I have a clarification request for your cut-off point of $150K. I understand that after this point, the income tax starts to tip things in the favor of living in Ontario. However, it seems that there are significant room for financial growth by living in QC. In one of your earlier Q&A, someone asked about the rise in value comparison in both ON and QC, and you stated that if you were buying a house with the same specifications, the money you would save in monthly mortgages if invested at the avg ROI, would far outweigh the slightly higher rise in property value you would see in Ontario.
However, would this not also far outweigh the increase in income tax you would be paying in QC?
If details are needed, the following assumptions can be considered:
– Household income: $160K
– No children yet. Hoping for 3, assume no daycare though (parents).
– Looking for $500K home in ON
– 2 cars
Thank you!
Let’s take a look at your scenario for this assessment:
Household income taxes on $160K salary (reference: https://simpletax.ca/calculator)
– Ontario income tax: $54,136
– Quebec income tax: $61,540
– Quebec cost difference (annually): +$7,404
No children yet. Hoping for 3, assume no daycare though (parents).
– Difference: $0 (no daycare)
Looking for $500K home in ON
– Ontario home $500,000 (25 years, avg interest 3.94%): $31,368 annually / $2,614 monthly
– Quebec home $360,000 (equiv to Ontario price Dec 2019) (25 years, avg interest 3.94%): $22,584 annually / $1,882 monthly
– Quebec cost difference (annually): -$8,784
2 cars (complete guess; assuming newer mid-size vehicles in the ~$30K range)
– Ontario insurance: $2,400
– Quebec insurance: $1,600
– Quebec cost difference (annually): -$800
In this scenario, you will save $2,180 annually by living in Quebec. Investing this over the next 30 years and earning an average return of 8.7% (based on historical averages), you would end up with $305K in investments. This is likely to be very close to the difference between the value of the real estate in Ontario vs. Quebec ($966K vs $603K; a difference of roughly $363K). Of course, this calculation uses assumptions that real estate in Ottawa will continue to slightly outperform that of Gatineau on average for the next 30 years, and assumes average stock market returns. Both of these assumptions could be incorrect, but we need to use some baseline values to help us to make informed decisions. Should history repeat itself, you might end up with a higher net worth by living in Ontario ($363K appreciation in real estate vs. $305K in investments). That being said, would you rather have a paid-off house with $305K in stocks that continue to earn you ~$26,535 / year in returns; or real estate that will continue to appreciate slowly while delivering you no additional expendable income?
In conclusion, even if your net worth ends up being marginally higher by living in Ontario at the 30-year mark, you won’t be better off financially. From a financial perspective, in this scenario, Quebec would still be the choice that would better serve your future self financially.
Now, could you imagine if you were to pay for daycare and after-school care for those three children over the course of ~10 years each? This equation changes dramatically, resulting in additional savings of $20-30K per year that you could invest versus spend on average daycare costs in Ontario! That would result in more than $1 million in investments at the end of 30 years! Having children in daycare or afterschool programs dramatically changes the results even quicker and makes it a simple choice.
Hi Brent,
Thank you for your thorough response! That really puts things into perspective. The daycare option would definitely tip the scales.
Thanks again Brent!
My pleasure Tabby 🙂
In conclusion, even if your net worth ends up being marginally higher by living in Ontario at the 30-year mark, you won’t be better off financially. From a financial perspective, in this scenario, Quebec would still be the choice that would better serve your future self financially.
Thanks
Yes that is correct (and still remains accurate even today).