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Toronto’s Financial Landscape in 2025: Key Statistics and Insights

by Mar 9, 2025Money Talks

Toronto, Canada’s largest city, continues to face unique financial challenges and opportunities as we move through 2025. From rising living costs to ambitious municipal investments, this article dives into the latest statistics shaping the financial outlook for Torontonians.

1. Rising Cost of Living: A Persistent Challenge

The cost of living remains a significant concern for residents in Toronto. According to a recent TD survey, 49% of Canadians still see inflation and the cost of living as their biggest financial challenge for 2025, though this is down 9% from last year’s figures1. In Ontario specifically, household expenses have increased by an average of 21.3%, forcing nearly half of residents to dip into savings to cover daily expenses 4.

Additionally, Toronto homeowners will face a 5.4% property tax increase, which translates to an additional $210 annually for the average assessed home value of $692,031 2. This tax hike reflects the city’s efforts to fund critical infrastructure and community services.

2. Financial Goals: Saving and Debt Reduction Take Priority

A significant portion of Ontarians are setting financial goals despite economic pressures:

  • 54% aim to save for the future.
  • 49% prioritize paying off debt.
  • 38% intend to update or create a will 4.

Interestingly, Millennials are leading the charge in debt repayment, with 38% identifying it as their top financial priority compared to only 21% of Boomers 6. Furthermore, 61% of Canadians have made financial New Year’s resolutions, including saving more money (18%), paying off credit cards (15%), and cutting back on spending (13%) 1 6.

3. Toronto’s Budget: Historic Investments in Affordability and Infrastructure

Toronto’s 2025 municipal budget reflects ambitious efforts to address affordability and improve infrastructure:

  • $18.8 billion operating budget, with $680 million in reductions and offsets.
  • $59.6 billion 10-year capital budget, marking a historic investment 2.

Key allocations include:

  • $4.9 billion for transit and mobility improvements.
  • $2 billion for housing and community initiatives.
  • $2.9 billion for flood protection and net-zero efforts.

These investments aim to reduce greenhouse gas emissions by approximately 160,725 tonnes, while addressing long-term infrastructure needs 2.

4. Economic Optimism Amid Challenges

Despite persistent concerns about inflation, there is cautious optimism among Torontonians:

  • 24% of Canadians feel more confident about their finances in 2025 compared to last year—a 4% increase 1 6.
  • Lower interest rates from the Bank of Canada have brought relief to homeowners renewing mortgages, though returns for savers remain lower than pre-pandemic levels 5.

This optimism is reflected in spending habits as more Canadians adopt strategies like minimizing discretionary spending and actively comparing financial products to save money 7.

5. Creative Ways Torontonians Are Saving Money

With rising costs affecting daily life, residents are finding innovative ways to stretch their dollars:

  • Stacking loyalty programs: Grocery loyalty programs like PC Optimum are helping households earn rewards while reducing food expenses 3.
  • Taking advantage of free experiences: Museums, galleries, and parks in Toronto offer free access during certain hours, allowing residents to enjoy cultural activities without breaking the bank 3.
  • Automating savings: Many Torontonians are automating contributions to Tax-Free Savings Accounts (TFSAs) or Registered Retirement Savings Plans (RRSPs) to stay consistent with long-term goals 3.

Final Thoughts: Navigating Toronto’s Financial Future

Toronto’s financial landscape in 2025 presents both challenges and opportunities. From rising costs to historic municipal investments, residents are adapting by setting clear financial goals, leveraging creative savings strategies, and taking advantage of city services designed to improve affordability.

While inflation remains a concern, cautious optimism is growing among Torontonians as they work toward achieving greater financial stability.

Sources:

  1. TD Stories: “How Canadians Are Feeling About Their Finances in 2025”
  2. City of Toronto News: “City of Toronto’s 2025 Budget”
  3. Financial Post: “Cost of Living Survival Guide”
  4. Now Toronto: “Nearly Half of Ontarians Are Dipping Into Savings”
  5. Ratehub.ca: “6 Financial Trends for 2025”
  6. Newswire.ca: “Half of Canadians Foresee Inflation as Biggest Challenge”
  7. Newswire.ca: “BMO Survey on Spending Plans”