Best Cities for Startups in Canada Based on Cost (2025)

A new report from Vellis Financial ranks Canadian cities by startup cost—revealing where entrepreneurs can stretch their runway, and where high expenses may slow growth.

Introduction

Canada’s startup ecosystem is thriving. New ventures are launching across industries—from cleantech to healthcare. Yet, the setup costs vary dramatically depending on location..

In 2025, those costs are under increasing pressure. From rising wages to shifting commercial rents, the launch city you choose influences how fast you grow—or how fast your capital runs out.

For first-time founders, early-stage teams, and businesses in underserved or high-risk sectors, location has a broad impact. It influences everything from hiring potential to long-term survival. Startup affordability is a strategic imperative as much as a budgeting decision.

At Vellis Financial, we work with entrepreneurs operating in some of the most complex and costly North American markets. That’s why we developed this city-by-city breakdown of startup costs across Canada. Using a weighted model based on setup fees, labor, commercial rent, and corporate tax rates, we’ve ranked 20 Canadian cities from most affordable to most expensive for new businesses.

Some results are expected. Others may surprise you.

Here’s what you need to know when deciding where to launch or expand your business.

Key Findings: Startup Costs Vary Widely Across Canada

• St. John’s ranks as the most expensive city to launch a startup, with the highest registration fee ($560) and the steepest corporate tax rate in Canada (30%).
  
• Calgary follows closely, where premium office rent ($30/sq. ft.) and high wages ($36.36/hour) drive up costs—despite Alberta’s lower tax rate (23%).
  
• Toronto takes the third spot, featuring Canada’s highest average wage ($36.62/hour) and elevated commercial rent. Setup fees are low, but overhead adds up fast.
  
• Winnipeg is Canada’s most affordable startup city. Modest wages, reasonable rent, and mid-range setup costs contribute to its top-value ranking.
  
• Southern Ontario cities like Windsor, Barrie, and London all rank in the top five for affordability—showing that cost-effective options are within reach of major hubs.
  
• Corporate tax rates vary from 23% in Alberta to 30% in Newfoundland and Labrador, playing a major role in startup cost differences across regions.

Startup Costs Across Canada: A Regional Snapshot

Startup affordability varies throughout the country. Cities like St. John’s, Calgary, and Toronto have the highest costs, while the Prairies and southern Ontario can be more affordable alternatives.

In Western Canada, cities such as Vancouver and Victoria show elevated costs, driven by high wages and rising commercial rent. By contrast, lower labor costs and manageable setup fees mean Winnipeg and Halifax offer more accessible runways for early-stage businesses.

Our charts below show the full spread of cost scores across 20 Canadian cities. This gives you a regional perspective on where your startup dollars will go furthest.

Top 10 Most Expensive Cities to Start a Business in Canada

Canada’s biggest cities offer access to capital, talent, and infrastructure. This naturally comes at a premium cost. Our analysis shows that high startup expenses aren’t exclusive to metros like Toronto and Calgary, though. Mid-sized cities such as Regina, Sherbrooke, and Saskatoon also rank in the top 10, due to a mix of elevated wages, steep commercial rents, and high business setup fees.

These expenses create serious friction for early-stage founders. In high-cost cities, even basic decisions—like hiring a first employee or leasing an office—can dramatically shorten a startup’s runway.

Here are the 10 most expensive cities in Canada for launching a business, based on overall startup cost scores:

1. St. John’s, Newfoundland and Labrador

Startup Cost Score: 79.5
Key Drivers: $560 registration fee · 30% corporate tax rate · $32.35/hour wages

St. John’s is the most expensive Canadian city for startups—due to the highest business registration fee in the country and 30% combined corporate tax. While the city offers a strong sense of community, its limited startup infrastructure and elevated regulatory costs can challenge founders, especially in healthcare and service sectors.

2. Calgary, Alberta

Startup Cost Score: 79.3
Key Drivers: $30/sq. ft. rent · $36.36/hour wages · $700 setup fees

Calgary has industrial strength—but that reputation comes with high costs. While Alberta offers one of the lowest corporate tax rates in the country, premium commercial rent and top-tier wages drive up expenses. Startups with capital-intensive models or office needs should budget carefully.

3. Toronto, Ontario

Startup Cost Score: 74.1
Key Drivers: $36.62/hour wages · $25.40/sq. ft. rent · $70 registration fee

Toronto is Canada’s startup epicenter, offering access to investors, media, and talent—but at a price.  It has the highest average wages and the steep rents can strain lean teams, even with relatively low setup fees. For growth-focused ventures that can operate efficiently, the upsides may be worth the overheads.

4. Regina, Saskatchewan

Startup Cost Score: 73.8
Key Drivers: $32.42/hour wages · $28/sq. ft. rent · $440 setup fees

Regina surprises with costs on par with larger cities. High commercial rent and above-average wages make it one of the priciest mid-sized cities in the country. Startups in agriculture and logistics may find alignment—others should approach with a clear financial strategy.

5. Montreal, Quebec

Startup Cost Score: 73.7
Key Drivers: $656 in setup fees · $33.92/hour wages · $28/sq. ft. rent

Montreal’s upfront costs are steep—licensing and registration top $650. Add in above-average wages and rent, and it’s a tough equation for early-stage startups. However, the city offers strong appeal for Francophone ventures, AI innovation, and creative industries.

Quick View: Cities 6–10

6. Sherbrooke, QC — High setup fees ($656) and solid wages. Low rent keeps it competitive.
7. Quebec City, QC — Similar fee structure as Sherbrooke with slightly higher rent and strong public sector presence.
8. Vancouver, BC — High wages and real estate costs offset low setup fees.
9. Saskatoon, SK — Wages and rent mirror Regina, pushing it into the top 10 despite its smaller size.
10. Victoria, BC — Desirable location, but wages nearly match Vancouver, quickly driving up costs.

Top 10 Most Affordable Cities to Start a Business in Canada

While major metros dominate Canada’s startup spotlight, the most cost-effective opportunities often lie elsewhere. These five cities offer the lowest startup costs in the country—giving early-stage founders more room to hire, iterate, and grow without burning through capital.

1. Winnipeg, Manitoba

Startup Cost Score: 53.2
Key Drivers: $300 registration + $175 license, $30.10/hour wages, $16.48/sq. ft. rent

Winnipeg is the most affordable city in Canada for startups. Low wages, reasonable rent, and modest setup fees make it an ideal launchpad for cost-conscious founders. With a growing presence in tech and manufacturing, it offers solid infrastructure without the overhead.

2. Halifax, Nova Scotia

Startup Cost Score: 58.6
Key Drivers: $375 setup, $30.92/hour wages, $16.59/sq. ft. rent

Halifax combines startup-friendly costs with coastal quality of life. Rent and wages sit below national averages, while the city’s infrastructure makes it a strong base for remote-first or regionally focused ventures. A smart choice for founders looking east.

3. Windsor, Ontario

Startup Cost Score: 60.1
Key Drivers: $270 setup, $36.62/hour wages, $14/sq. ft. rent

Windsor hosts some of the cheapest office space in Canada. At just $14 per square foot, this can offset Ontario’s higher wage costs. Its border location is ideal for manufacturing and logistics startups with U.S. ambitions, too.

4. Barrie, Ontario

Startup Cost Score: 60.3
Key Drivers: $270 setup, $36.62/hour wages, $14.50/sq. ft. rent

Barrie remains one of the few Ontario cities where startups can keep costs in check. Rent and setup fees are low, offering an affordable alternative to the GTA. Barrie’s growing economy makes it well-suited for founders who want proximity to a dynamic marketplace without the price tag.

5. London, Ontario

Startup Cost Score: 60.6
Key Drivers: $270 setup, $36.62/hour wages, $15.50/sq. ft. rent

London rounds out the top five, balancing familiar Ontario regulations with below-average rent and startup fees. Thriving health, education, and tech sectors make it attractive to founders looking to stay south without stretching too thin.

Quick View: Cities 6–10 (Most Affordable)

6. Kitchener-Waterloo, ON — Tech reputation, low setup fees, $16/sq. ft. rent
7. Hamilton, ON — Affordable rent ($14.85/sq. ft.), high wages
8. Edmonton, AB — Steady rent value despite GTA-level wages
9. Ottawa, ON — Government adjacency, $19.61/sq. ft. rent, low setup costs
10. Kelowna, BC — The lowest setup fees, balanced by high average wages.

Full Startup Cost Rankings: Canada’s 20 Cities Compared

Startup costs are vital considerations when deciding where to launch or expand your business. They shape everything from your burn rate to how fast you can hire.  Below, we’ve compiled the complete ranking of 20 Canadian cities based on five key financial indicators.

How did we reach these rankings? Each city received a Startup Cost Score out of 100, with higher scores representing more expensive conditions for entrepreneurs. This score reflects a weighted combination of:

• Business registration and license fees
• Average hourly wage
• Estimated monthly labor cost
• Commercial office rent (per square foot)
• Combined federal and provincial corporate tax rates

The full table below allows you to compare the data from each city—whether you’re looking for affordable labor, lower setup fees, or simply a place where your startup capital goes further.

This breakdown is designed to be practical, transparent, and founder-focused. Use it to assess cost conditions, set smarter budgets, or just gut-check where your city stacks up.

Expert Tips: How Founders Can Navigate High-Cost Startup Cities

High startup costs are a reality for entrepreneurs building in cities like Toronto, Calgary, or Vancouver. This isn’t necessarily a dealbreaker. With smart planning, founders can stay lean without sacrificing growth.

Here are five practical ways to manage costs in Canada’s most expensive markets:

• Go hybrid or remote-first. Rent is often a startup’s biggest fixed cost. Operational flexibility can reduce overheads during early growth stages.
  
• Leverage incubators and innovation hubs. Many cities offer subsidized coworking space, grants, and advisory programs for promising ventures.
  
• Choose the right business structure. Incorporation, partnerships, or hybrid models can impact your taxes and regulatory overhead—especially across provinces.
  
• Tap into local and federal funding. Programs that support hiring, R&D, or high-impact sectors can extend your runway.
  
• Partner with providers who understand complexity. Founders in healthcare, fintech, or cross-border services need financial tools that flex with regulation—not fight it.

“Startup costs can’t always be avoided—but they can be managed,” said a Vellis Financial spokesperson. “The key is building with efficiency, not scarcity. In high-cost cities, early decisions around rent, payroll, and structure can define your first year.”

At Vellis Financial, we collaborate with founders navigating some of the most complex and cost-intensive markets in North America. Whether you’re launching in a regulated space or expanding into new regions, our platform is built to help you grow through risk, rather than around it.

Conclusion: Cost Is a Strategy—Not Just a Number

Where you start your business has a holistic impact, affecting growth, risk tolerance, and your ability to scale For early-stage founders, understanding the true cost of doing business is more than a budgeting exercise—it’s a strategic advantage.

This report shows that startup affordability in Canada is deeply regional. Cities that seem accessible on the surface can carry hidden costs. Others, while leaner, may lack the infrastructure for high-growth teams.

When you’re operating in complex, regulated, or underserved sectors, those tradeoffs are even more pronounced. That’s why founders need partners who understand the landscape.

At Vellis Financial, we help startups grow smarter in high-cost and high-risk environments. Whether you’re launching in fintech, healthcare, or cross-border services, our banking and payments platform is designed to flex with complexity—not fight it.

Explore how Vellis supports startups at every stage → [URL]

Data & Methodology

To build this ranking, we analyzed startup costs across 20 Canadian cities using the latest data available as of Q1 2025. Each city received a Startup Cost Score out of 100, based on five factors that shape early-stage business budgets:

• Business registration and license fees
• Average hourly wage
• Estimated monthly labor cost (based on a 160-hour work month)
• Commercial office rent (per square foot)
• Combined federal and provincial corporate tax rate

Each data point was standardized, then weighted to reflect real startup pressures: Setup costs (30%), labor (30%), rent (25%), and taxes (15%).

This approach focuses on what matters most to early-stage founders: how much it actually costs to get a business off the ground—and keep it running in year one.

Where the Data Comes From

We used a mix of public sources and market data to build the index:

• Business registration and license fees were gathered from official municipal and provincial sites like the City of Toronto, City of Calgary, and the Government of Quebec. Where exact 2025 figures weren’t published, we adjusted 2024 rates using inflation and fee schedule changes.
  
• Labor costs are based on the most recent average hourly wages published by Statistics Canada. Since city-level data isn’t always available, we used provincial averages as a consistent benchmark and calculated monthly costs based on a full-time work schedule.
  
• Office rent estimates were pulled from commercial market reports by CBRE Canada, Colliers Canada, and platforms like Spacelist and REALTOR.ca. When local data wasn’t available, we used Class B space averages from similar markets.
  

Corporate tax rates reflect the federal general rate (15%) plus each province’s standard corporate rate, sourced from the Canada Revenue Agency and provincial tax portals. We used general rates (not small business deductions) to ensure consistency across all cities.