Moving to Canada From the U.S.

Written by John Woodfield, Portfolio Manager, CIM® CFP®

There is a lot to organize when moving to Canada from the U.S. From selling your home to deciding what to do with your car, investments, and health insurance—the list seems never-ending.

Many people leave the financial planning part of their move until after they're in Canada because they feel overwhelmed just thinking about it. However, after speaking with hundreds of Americans, dual citizens and green card holders who have moved to Canada, we've found that it's best to plan every part of the move in advance.

Don't leave things (especially, the financial aspect) up to chance. Just take it step by step. Get started well before the date you plan on moving, and you'll have time to do everything correctly. When you do it right the first time, you won’t have to deal with costly issues later.

TABLE OF CONTENTS

1. Moving From the U.S. To Canada as a Permanent Resident
2. Before Moving to Canada From the U.S.
3. Weighing the Pros and Cons
4. Understanding the Financial Implications
5. Social and Cultural Considerations
6. Eligibility Requirements
7. How To Obtain Permanent Residency
8. Work Visa Options
9. Moving to Canada for Work
10. Moving to Canada as a Business Owner
11. Moving to Canada for Retirement
12. Top Canadian Cities To Consider for Your New Home
13. Essential Steps To Take Before You Move
14. Common Questions About Moving to Canada From the U.S.

Moving From the U.S. To Canada as a Permanent Resident

U.S. citizens who are in Canada as tourists do not require a visa. If you're an American, you can stay in Canada for up to six months with your U.S. passport. To immigrate, you must first obtain permanent resident status, and after five years, you can apply for citizenship.

The most common ways to gain permanent residence and work toward citizenship include the following:

• Getting a Work Visa
• Family Sponsorship
• Start-up Visa
• Provincial Nominee Programs
• Express Entry

Factors To Consider Before Moving to Canada From the U.S.

A U.S. citizen moving to Canada should become familiar with the key differences between the countries. Canada is a vast country that is generally more expensive than the U.S. It has two official languages and free healthcare.

The Canadian tax system and legal system differ from the U.S. Wills and investment accounts must be reviewed and adjusted. It is also vital that investments such as mutual funds be examined to see if they can be held by a U.S. person residing in Canada. Often, they cannot.

Weighing the Pros and Cons of Relocating to Canada From the U.S.

There are many personal, political and economic puzzle pieces to consider when a U.S. person moves to Canada. Many people make a move due to family ties, while others do so because they feel more comfortable in a more socialist political landscape. But, one thing to understand is that the price of safe cities and accessible healthcare is higher costs and higher taxes.

Understanding the Financial Implications of Moving to Canada From the U.S.

U.S. persons moving to Canada are generally pursuing career advancement, and career advancement will have a positive economic benefit.

However, others moving to Canada from the U.S. do so for family reasons or retirement. For this group, there can be financial issues that must be addressed. Investment holdings in retirement plans and IRAs can remain intact though the proceeds will be taxable in Canada. Your investments must be closely examined due to rules around which investments a U.S. citizen in Canada can own. Mutual funds, Canadian exchange-traded funds, and anything considered a PFIC can have costly tax implications for U.S. persons in Canada.

Social and Cultural Considerations When Moving to Canada From the U.S.

Canada and the U.S. share many similarities. Canadians generally are very polite and say ‘please’ and ‘thank you’ a lot.

Language also has subtle differences. Canadians add the letter 'u' to words like harbour or neighbour. Canadians call a beanie a toque, a dollar coin a loonie (and a two-dollar coin is a twoonie), and say 'eh' a lot—most Canadians are reluctant to admit this, but they do.

To the American ear, Canadians initially appear to be asking questions due to the up-tilt at the end of sentences, which can confuse newcomers who aren't used to being politely questioned at every turn.

Eligibility Requirements for Moving to Canada

Several paths can lead you to Canadian permanent residency or citizenship.

1.Express Entry is for highly skilled individuals. It is points-based, and you will be judged on your experience, qualifications, education, and skills.

2.The Provincial Nominee Program is for those nominated by a province who meet eligibility requirements.

3.The Self-employed Visa is an option if you can provide evidence that you can be successfully self-employed in Canada and have enough relevant work experience.

4.For the Start-up Visa, you must have a business that qualifies and be supported by a designated organization. You must also have the necessary language skills, and the business must generate enough funds to cover the costs of settling in Canada.

How To Obtain Permanent Residency in Canada if You're a U.S. Citizen

To become a Canadian permanent resident, a U.S. citizen must be present for at least 1095 days (three years) in the five years immediately before application. They must have filed taxes in Canada for at least five years. Applicants between 18 and 54 must prove their English or French proficiency. There is, typically, also a citizenship test that you must pass.

Work Visa Options for U.S. Permanent Residents in Canada

The main options for work visas for U.S. permanent residents in Canada are the Federal Skilled Worker Program (PSWP), the Canadian Experience Class (CEC), the Provincial Nominee Programs (PNP), and the Quebec Experience Class (QEC). Each of these methods has its own criteria and application process. I urge those interested in these programs to look each one up, since the details can be complex.

To learn more about all the different types of visas, visit the Canadian immigration website here.

Moving to Canada for Work: Steps to Take Before You Move

1. Visit the official website of the area you plan to move to. Doing this will give you background on the area, the job market, housing, schools, etc.
2. Collect your employment credentials and see what else you need in your new city.
3. Estimate the costs of moving and the costs of living in Canada.
   Sort your items and make the hard decisions about what you want to leave behind.
4. Open Canadian bank accounts and apply for credit cards as soon as possible.

Moving to Canada From the U.S. if You're a Business Owner

Starting a business in Canada opens up a whole new world of planning that is needed. The first thing to do is find the professionals you need alongside you, as you plan. An accountant and a lawyer are necessary, as is a cross-border investment advisor if you have investments. Remember, IRAs can be maintained if your investment advisor is licensed in Canada and the U.S.

Moving to Canada From the U.S. For Retirement

U.S. citizens moving to Canada to retire can have the best of both worlds. They can maintain most of the benefits gained while working in the U.S. and, often, also have the benefits of being in Canada, such as healthcare. However, planning is necessary to avoid issues around healthcare and taxation as well as legal issues around receiving and giving an inheritance. These issues are all manageable with the proper advice.

Top Canadian Cities To Consider for Your New Home

The first choice is whether you would like to live in a city or a smaller town. Canada has several world-class cities, all with their own charm. Toronto is the metropolis with all the culture and shopping you would ever need. Montreal has the joie de vivre of French culture. Vancouver has picturesque mountains in a sweeping ocean setting, perfect for those who want to be close to nature. Smaller cities like Halifax or Winnipeg have small-town charm and tend to be less costly.

✅ Related Article: Retiring in Vancouver: Everything You Need to Know

Essential Steps To Take Before You Move From the U.S. to Canada

1. Choose which setting you desire: small town or large city? Warm and wet, or dry and colder?
2. Look closely at your finances to see what your budget will allow in terms of living and housing costs.
3. Find the right cross-border accountant, investment advisor, and attorney to help you with your move.
4. Get your documents in order.
5. Make the hard decisions about what you want to bring and leave behind, then plan your move.
6. Find out when you can start building your credit by opening a bank account and obtaining credit cards. Please note that your U.S. credit does not automatically follow you.

Common Questions About Moving to Canada From the U.S.

Is moving to Canada from the U.S. a good idea?

Usually, moving to Canada from the U.S. is a good idea, so long as the move is properly planned. Canada offers many great benefits to those that live here. There is a lower crime rate, nationalized healthcare, friendly and polite people, and a wide variety of climates.

What are the top three factors to consider before moving?

1. Location - have you decided on where you will settle?
2. Financial - do you have savings, and is it invested properly? Do you understand the tax implications?
3. Work - do you plan on working while in Canada? Are your documents in order?

How much does it cost to move to Canada from the U.S.?

Moves of any type are not inexpensive. A U.S. citizen moving to Canada will find the costs in Canada are generally higher than in most of the U.S. Also, items you may bring, such as automobiles, need to be inspected and adjusted to Canadian standards. This can be costly though there are many garages that do the necessary work. The recommendations for what is needed vary, so shop around.

What are the benefits of moving to Canada?

Canada can offer U.S. citizens a relaxing alternative to U.S. cities and towns. Canadians tend to be polite, crime is low, and guns are generally frowned upon. Many consider Canada to be a kinder and gentler version of the neighbour to the south.

Can a U.S. permanent resident work in Canada?

U.S. citizens may be eligible for a work permit under the treaty agreement, if they have a job available through their present employer or a new employer or if they engage in substantial investments or trade in Canada.

What are my options for moving to Canada besides Express Entry?

The usual options besides Express Entry are a Provincial Nominee Program, a Self-employed Visa, or a Start-up Visa.

Summary of Key Points:

1. Plan your move to Canada from the U.S. in advance, focusing on financial aspects and necessary paperwork.
2. To obtain citizenship in Canada, you must first get permanent resident status, and after five years, you can apply for citizenship.
3. Before moving, consider the key differences between the countries, such as higher living costs in Canada and the different tax and legal systems.
4. Examine your investments closely, as PFICs can have costly tax implications and strict reporting rules when held by a U.S. person residing in Canada.
5. Understand the eligibility requirements for various immigration pathways, such as Express Entry, Provincial Nominee Program, Self-employed Visa, and Start-up Visa.
6. U.S. citizens moving to Canada for retirement or business purposes should seek professional cross-border advice on taxation, legal issues, and maintaining their investments.

Next Steps

If you are a Canadian or U.S. resident or are planning on moving across the border and need assistance with transferring and optimizing your investments, estate planning, wealth management, and portfolio management, please get in touch. At SWAN Wealth, we specialize in cross-border financial planning, Canadian financial planning, U.S. retirement planning, and cross-border wealth management.

More Cross-Border Financial Planning Articles & Guides

If you’re planning a cross-border move, these articles and guides will help simplify your move and ensure you’ve covered everything.

Are You Retiring to Canada from the USA?

How Capital Gains are Taxed in Canada

How to Choose a Financial Advisor in Canada

How to Find a Wealth Manager in Canada

Cross-Border Estate Planning Guide

The Ultimate Financial Planning Guide for Dual Citizens Living in Canada

About the Author

John Woodfield is a Financial Management Advisor (FMA), a Chartered Investment Manager (CIM), and a Certified Financial Planner (CFP), and in 2007 was inducted as a Fellow of the Canadian Securities Institute (FCSI). As a portfolio manager and CFP®, he works with clients across Canada. John Woodfield’s clients are families, individuals and business owners who understand the importance of comprehensive wealth and investment plans driven by the lifestyle they want to lead.

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