A combination of inflation and a stronger Canadian dollar has vaulted Toronto and Montreal into two of the most expensive cities in the world.

According to UBS Wealth Management Research, Toronto is the eighth most expensive city to live in, moving up from 31st in 2009. (iStock)

Toronto is the eighth most expensive city while Montreal is ninth. Both cities are more expensive to live in than London, Paris and Sydney, Australia.

It's a dramatic shift for Toronto and Montreal, which were ranked 31st and 32nd in last year's survey.

The most expensive city is Oslo in Norway, followed by Zurich, Geneva and Tokyo.

The survey was done by UBS Wealth Management Research, a Swiss firm that has been tracking the cost of living in major cities since 1971. It bases its data on the cost of consumer goods and services, and does a survey of wages to determine the purchasing power of people living in major cities.

In terms of purchasing power, Montreal was 11th while Toronto was 14th. People living in Zurich, Sydney, Miami and Los Angeles have the greatest purchasing power based on annual wages and the cost of living.