Moving to Canada for a PE job?

I'm a principal at a private equity secondaries firm in NYC. I was recently offered a similiar job at a firm in Toronto and was asked to move up there. The pay being offered is CAD 350 and I imagine there will be additional short term comp paid each year of 200-300 or so. Carry would be worth around CAD 1m or so but wouldn't be paid out for like 5-6 years.

Tax rate in Toronto is 53% and I hear the cost of living is very very high. Looks like all houses in good areas are like 2m bucks on the low end so realistically is it worth living in Canada for this wage compared to the US?

Looks like the healthcare system isn't that inclusive - I think you still need to pay out of pocket for dental, physio, chiro, etc.

Thoughts welcome on quality of life, pay needed, and anything else in Canada.

Thanks

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Comments (28)

Aug 22, 2021 - 10:31am

I moved from a PE unit to Toronto (not from NYC, but my headcount was based in NYC).
It was the right thing to do at the right time, since a promotion came along with it. Bottom lime was less money than before, but I really enjoyed living and working in Canada.The culture is very different there and I had more responsibilities that developed me as a professional, and I had a larger team working for me.

Canada places a bigger focus on your personal life, at least I had more time to travel, see the country, go see the National Parks, and make really awesome memories.

But you are right, cost of living is very high in Toronto, and overall not a cheap country.

  • Principal in PE - Other
Aug 22, 2021 - 1:58pm

Thanks. Ya, it seems like you need to earn a lot more in Canada vs. the US as it looks like Toronto is really the only place to live and all the suburbs look pretty challenging to get into the city and seem way overpriced. A friend of mine bought a house in a place called Arora and he paid 1.3m. That house would be like 250k in New York State and probably be closer to NYC. Seems like housing pricing is way inflated in Canada and quality of living is lower - real pity.

Most Helpful
Aug 24, 2021 - 4:56pm

Live and work in Toronto. I like it because it's a good mix of hustle and chill. Comp is low compared to NY and most of the US, and cost of living in Toronto is high. But at that kind of comp package, you'll be very very comfortable. Have worked in NY, Hong Kong and a couple other hubs and Toronto ranks up there for me.

Housing: Very very inflated. A mediocre to ok house is $1.5 mill ish downtown and in the surrounding areas. The $1-2 mil range is a seller's market, tons of families and dual income households chasing properties so all bidding wars. More a buyer's market in the $2 mil range and up which gets you pretty sweet properties. For the city, townhouses are a decent middle option in the $800k+ range, mostly in up and coming areas. 2 bed, rooftop patio or small backyard space, 1,000-1,500 square feet. 

Nightlife: I like it. Not as many options as an NY, but still pretty good. Club scene is shit, bar scene is nice with lots of quirky and unique options. Restaurant scene is fantastic, lots of ethnic food, good diversity. You'll have to get out of the downtown core for the best stuff but generally good options. If you like sports, the arenas are core downtown and walking distance from each other and the financial district - hockey, baseball, basketball.

Healthcare: Between OHIP and work benefits, have never had to pay out of pocket though have never had any major issues. It's a weird feeling getting care and walking out with spending a dime. There are backlogs for specialists because politics keeps the supply low but there are also private options.

Work / Life Balance: Generally outside the big banks, quality of life is super important here. Work SLOWS in the summer because all the key people fuck off to their lakeside cottages, Europe and everywhere else. Am pretty much on a 9-5 between July and the first week of September

TLDR: Don't come for the comp. Come for a quieter and maybe better life, especially if you have a family. With that kind of income, you'll be very comfortable.

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  • Associate 2 in PE - LBOs
Aug 24, 2021 - 6:11pm

Am pretty much on a 9-5 between July and the first week of September

If you work for a respected platform I'll drop everything and come work for you tomorrow if this is true 

Aug 25, 2021 - 9:53am

Few comments here to level set on your understanding of the current environment in Canada: 

- Housing market here never crashed like in the US in 08'; we're on nearly a 30 year bull run that has caused CoL to skyrocket across the country but mainly in our two largest real estate markets Toronto and Vancouver. Since we elected our Prime Minister in 15' the average property has achieve 2-3x MOIC (unlevered) across those 6 years. This has led to a massive increase in mortgage debt up to nearly 1x GDP. Overall, Canada probably has the shittiest housing market in the G7 in terms of income to price. You can use an app called HouseSigma to gauge the rate of housing price growth in the GTA. 

- Despite this, Toronto is still relatively livable as referenced well above. Won't beat on a dead horse here. 

- I would call your comp level relatively rare. I think it would be important to contextualize that there likely won't be a lot of other seats waiting for you at any one time at that comp level here. A lot less diverse of a finance universe with few large players that dominate the market. 

- Healthcare, typically you're getting the full suite of extras from your employer; anything major is covered by Ontario state sponsored healthcare which is nice downside protection if you ever lose your job. 

- Tax rate; given our massive deficit spending over the pandemic (~C$500bn); it's likely we are going to see movement to increase the tax outlays from "the wealthy" who have "benefitted" from COVID. This will be a talking point to watch in our ongoing Federal election (election occurs on Sept 20) 

- Overall, I think we have challenges in the near to medium term with a hollowing out of the middle class and overall cost of living. In your income range however, I think you can live a great life here. We have strong public schools, good social safety nets that overall provide peace of mind relative to the US, with many of the same benefits from high incomes. 

  • Principal in PE - Other
Aug 25, 2021 - 10:31am

Appreciate the input! I view a 53% tax rate as equivalent to highway robbery so the thought of it going up higher makes me less enthusiastic about moving. I guess this speaks as to why "the wealthy" try and earn most of their $$ through capital gains as I think that tax rate is like 25% in Canada. I was just speaking with a colleague in Switzerland who told me their capital gains rate is 0% - that's a country that knows what's up.

Aug 25, 2021 - 10:48am

Yes there's lots of ways to skirt taxes via changing where the income is coming in. Many business owners can reduce salary tax burden (the unfortunate highway robbery you refer to), by structuring their salary as dividends. Capital gains is also good; there's also multiple versions of tax-exempt accounts for retirement savings. Primary residences are also capital gains tax exempt. Overall, I think you're paying for society as a whole to have good access to healthcare services and good public schools (you will find that most people you come across went to public school instead of a reliance on private schooling; residents don't leave uni with hundreds of thousands in debt as major unis are public as well, tuition is subsidized). If you're looking for a more libertarian or tax haven society, this probably isn't it. 

  • Associate 2 in PE - LBOs
Aug 26, 2021 - 1:08pm

Born and raised in Toronto and have lived in NYC for the past 4 years, so have some perspective as well.

Pros:

-TO is safer, cleaner, and quieter though has all the perks of a big city (restaurants, bars, sports etc.) 

-TO is more diverse and welcoming since most people are rooted here unlike NYC

-Home buyer market is inflated, but COL is lower than in NYC otherwise (e.g. a prime 1 BR in Manhattan would be closer to $4k vs. $2k in TO)

-Better social services (e.g. healthcare, public schools)

Cons:

-TO taxes are higher though the variance is often exaggerated (i.e. 53% is the top marginal rate, not the average rate). At $600k income, you'll be paying ~48% in TO and ~44% in NYC (and that's before Biden tax plan)

-TO is a bit colder, though not that much different from NYC 

-TO comp is on average lower though at your level, you will be more than comfortable 

  • Principal in PE - Other
Aug 27, 2021 - 6:28pm

Going to visit Toronto next week with the wife. She has her eyes set on two neighbourhoods: Rosedale and Forest Hill. Both are balls expensive (like 7-8m for a mediocre looking old house). Tbh, I could buy the same property for like 1m in New York State. Lol I get the feeling $ doesn't travel very far up here. Govt should probably start trying to cool down the housing market but I guess no one wants to live anywhere but Toronto since that's where all the finance Jobs are in the entire freaking country...maybe the PM needs to start incentivizing immigrants to move around the country and give tax breaks to businesses that set up shop in like Moosejaw instead of DT Toronto. Otherwise it's just going to be the same old story of everyone packing into Toronto and inflating housing prices.

  • PM in HF - Other
Aug 27, 2021 - 10:34pm

First off, no one in USA in finance who works in CA/CT/NY should ever say Canadian taxes are bad, cause they are very similar setups. Capital gains is 50% and while there are ways to actively minimize taxes zero sure thing you are going to pay your fair share end of the day unless you purposely want skim the line of legality.

There is threads on threads, with all these people on here scared every American city is becoming a war zone, you can go out in any Canadian city and walk home drunk at 3am. 
Rosedale/ForestHill are not the only nice places to live you can easily live even in Royal York/Queen St and be in a good area very close to finance jobs/great schools. 
If you want to compare living in NY state and taking the train in, you need to compare to living in Oakville and taking train in. Lots of PMs do that.

Main let down of Toronto/Canada is lack of things to do after a while. Most ppl have second homes in Florida and covid makes it really hard to get down there. Sure cottage country is nice but nothing compared to all the places you can goto in the states or the hamptons. The other is Canadians are nice folks and Americans are way more on the side hustle go getter.

  • Associate 2 in PE - LBOs
Aug 28, 2021 - 1:36pm

Forest Hill and Rosedale are the most desirable neighborhoods in the entire city and are very central so not even close to upstate NY. That's comparable to finding a sizable detached home in UES or Tribeca, you can imagine the prices.

Also, for $7-8mm USD ($10mm CAD), you should be able to find an unreal home in the area, not an old mediocre place.

Here's a 5500 square foot, 6BR / 5BA in Forest Hill for $4.5mm USD. Looks pretty good to me.

https://www.realtor.ca/real-estate/23427941/33-gardiner-rd-toronto-fore…

  • Principal in PE - Other
Sep 3, 2021 - 8:40pm

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  • Associate 2 in PE - LBOs
Sep 4, 2021 - 1:39am

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