Skip to content

Yukonomist: The numbers behind retiring in the Yukon

Since the Klondike gold rush, there has been a dramatic change in how long Outsiders plan to stay in the Yukon when they move here.

Since the Klondike gold rush, there has been a dramatic change in how long Outsiders plan to stay in the Yukon when they move here.

Back in 1898, the ideal was one year — less if possible — then a return to the balmy south to spend all that Klondike gold.

A generation ago many believed it might make sense to work here for a decade or two, but they generally assumed that they would retire elsewhere. I recall overhearing a retired Yukoner telling a southerner they intended to live permanently North of Sixty.

“You plan to stay here for the rest of your days?” came the incredulous reply.

In a trend that would astonish the sourdoughs of Forty Mile, there is now a phenomenon of people moving to the Yukon in their golden years. Some have adult children who moved here and want to be close to the grandkids. Others have noticed how much cheaper continuing care is in the Yukon compared to the lower 10 provinces.

The lifestyle attractions of the Yukon are obvious, even if our tech sector has not yet invented the driveway-shoveling robotic equivalent of the Roomba.

But does it make financial sense to retire in the Yukon?

Specifically, assuming you have managed to accumulate a retirement fund, how far will your money go after taxes and the cost of living?

Frederick Vettese, a prominent Canadian financial advisor who writes in Toronto’s Globe and Mail, weighed in on the tax question.

He looked at the after-tax income of an illustrative 65-year-old couple with $800,000 in a Registered Retirement Savings Plan and $100,000 in a Tax Free Savings Account. He assumed their investments earned a return of 2.1 percent after taking inflation into account, and included any income they were eligible for from Canada Pension Plan, Old Age Security and Guaranteed Income Supplement.

On average, such a couple would earn $115,605 per year in Canada. However, tax rates and tax brackets are significantly different in each province or territory. If the couple lived in the Yukon, they would earn $118,611, or an extra $3,006. This is the fourth highest in the country, after Nunavut ($120,909), the Northwest Territories ($118,859) and British Columbia ($118,770). Meanwhile, the place with the harshest taxes was Nova Scotia, where our retiree couple would be left with just $110,635.

So far, so good for Yukon seniors on the income front. But what about the cost of living? Will the legendary higher cost of living in the North eat up those tax savings and more?

Statistics Canada’s latest detailed comparison of the cost of living across Canada is based on 2019 data. The results look at 15 cities across Canada, so we have data for Whitehorse but not other Yukon communities.

The results will be a surprise for people Outside who assume that milk costs the same in Whitehorse as on Baffin Island.

If the average for the 15 cities is 100, then Whitehorse comes in at 102; again, something that would astonish gold rush stampeders facing prices — according to the National Parks Service — of $5 per egg or $2 per onion.

The big box stores may not be aesthetically pleasing, but they have amazingly efficient long-distance supply chains up the Alaska Highway.

If you adjust Mr. Vettese’s numbers with the different cost-of-living figures, you get a revised league table. Nunavut drops off the list, since it didn’t make Statistics Canada’s list of the 15 important cities. Yellowknife and its high cost of living index of 112 drops it to last place. Adjusted for prices, our example couple would have just $106,124 in the N.W.T.’s capital.

Vancouver, located in the other jurisdiction ahead of the Yukon in pure income terms, also drops to below the Canadian average. With a cost of living index of 104, our couple would make $114,202.

Whitehorse’s cost of living index of 102 pushes it down the list to a point just above the national average. Our couple takes home $116,285. Edmonton is just ahead of us, with the couple putting $116,905 in the bank each year.

The winning cities adjusted for cost of living are Saint John, Winnipeg and Montreal. These cities have cost of living indices of 92 or 93, resulting in our couple having a price-adjusted cost of living of over $121,000.

You have probably already guessed the secret to these cities’ success: low housing costs. Whitehorse’s housing and rental costs are 103, a bit above the 15-city average. Saint John, Montreal and Winnipeg come in at 74, 85 and 82 respectively.

For Yukon retirees, this underlines how advantageous it is to have paid off the mortgage on a home when you retire. If our couple isn’t paying rent or a mortgage, Whitehorse moves back up the rankings.

Of course, you wouldn’t choose somewhere to retire just because of the money. Family, community, health care and an active lifestyle amidst breathtaking scenery are also important. And since we have all of those, you can expect to see more and more retirees spending their golden years in the Yukon.

Keith Halliday is a Yukon economist, author of the Aurore of the Yukon youth adventure novels and co-host of the Klondike Gold Rush History podcast. He won the 2022 Canadian Community Newspaper Award for Outstanding Columnist.