New immigrants to Canada face unexpected costs

posted on April 26, 2015

By Gail Johnson, Yahoo | Link to Article

By Gail Johnson, Yahoo | Link to Article

When Mehmet Gulec looks back on the days and weeks following his family’s arrival in Canada from Turkey in December 2013, he says he’s still amazed by everything the foursome overcame in fleeing their homeland. It wasn’t just the severe ice storm that hit Burlington, Ontario, three days after they landed there that they found challenging. So too was getting settled in their new country with extremely limited means.

“We came – four people – with $1,000 Canadian cash,” Gulec says of his wife and two sons. “We survived, and when I turn back even myself I cannot understand how we did it. It was because we were not alone: Canadians are unbelievable people.”

Gulec, who worked for 20 years as a production manager in the automotive industry in Turkey, says several organizations helped the family get established, including the Centre for Skills Development & Training, which offers a program called Enhanced Language Training to help immigrants who are beginning their careers in Canada. Gulec is now working as quality-assurance engineer in the food industry.

He’s thankful to call Canada home, but like so many newcomers, he was overwhelmed by financial matters at the outset.

According to a new study by BMO Wealth Management, immigrants arrive here with an average of $47,000 in savings to help them get settled, while 19 per cent come with no savings at all. The study is the first in a series called Making the Financial Transition, which will examine several financial issues related to those who have moved to Canada within the last 10 years.

The inaugural report also revealed that, after all initial expenses associated with getting settled, immigrants are left with an average of $20,000. Fifty-three percent of newcomers use their remaining money to save for retirement; 49 percent save it for their kids’ education; 44 per cent save it for a large purchase such as a home or a car, and 36 per cent save it for a trip.
Two thirds send a portion of their money (an average of $2,300) back home to friends or family, with 17 per cent doing so monthly.

“It can be daunting for many people, especially when coming over with a family, to be settling in a completely new environment with a new language and to be thinking about school, buying a house, buying a car, connecting with family back home; there’s a lot to consider,” says Julie Barker-Merz, president of BMO InvestorLine. .”What’s encouraging is that those Canadians who’ve been in Canada less than 10 years are really doing a good job managing their finances.”

For people like Gulec, however, there were some shocks when it came to certain expenses.

“Food prices, especially fruit and vegetable prices, are four to five times more expensive than Turkey,” he says. “I wasn’t expecting that much difference. And in Turkey we’re used to tax being included in prices. If you have limited money in your pocket and no credit card like me it was really hard to calculate how much I was going to have to pay the cashier.”

Melissa Pedersen, coordinator of immigrant services at the Centre for Skills Development & Training, says that clients often report the stress of finding employment as just one of the financial challenges they encounter.

“The cost of financing housing is sometimes unexpected,” Pedersen says. “When renting, clients are often asked to pay rent in advance for between three months to up to one year upfront.”

Transportation expenses can also be prohibitive, particularly in areas such as Halton, Ontario, that lack the infrastructure of large urban areas.

“In order to access services and training, newcomers are often forced to buy a car upon arrival, taking from monies saved to settle,” Pedersen explains. “Car insurance here is extremely expensive relative to insurance–if they even require it–in clients’ countries, as is the cost of gas and car maintenance.”

The cost of child care is also unexpectedly expensive: close to $2,000 per month for a child younger than two and a half and $1,500 per month for a preschooler. “At the same time, a minimum wage job–the first job for many–brings $1,800 per month income,” Pedersen says. “The wait-lists for subsidized child care are very long.”

The costs of heating and electricity are also high in newcomers’ eyes. “Many who come from warmer climates report very high expenses in the colder months as they struggle to stay warm,” Pedersen says.

She notes that those who don’t have a job soon after arrival need to apply for financial support or social services. If they don’t find well-paying employment, the funds they brought with them are quickly exhausted .

According to the BMO report, the most common reasons people choose to immigrate to Canada are to be safe (46 per cent), to live in a different country (42 per cent), to get a better job (38 per cent), to improve their education (36 per cent), and to have access to better government programs (33 per cent).

Sixty-seven per cent of immigrants say their standard of living has improved since coming to Canada, with 27 per cent saying it has improved greatly.

“Since we came to Burlington I realized that people were very friendly, polite and helpful,” Gulec says. “We are very happy to be and live here.”

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