Living in Canada vs. USA: A Quick Guide to the Pros and Cons

Written by John Woodfield Portfolio Manager, CFP®, CIM® and Tiffany Woodfield, TEP, Associate Portfolio Manager, CRPC®, CIM®

Should You Live in Canada or the United States?

In this quick guide to living in Canada vs. the USA, I’ll cover the basics of lifestyle, housing and education, as well as financial considerations.

As a cross-border financial advisor, I speak with Canadians and Americans who are moving across the border all the time. For some, the decision is easy because moving aligns with their lifestyle values and long-term vision. For others, it’s a temporary move. Meanwhile, others plan on keeping ties on both sides of the border—which adds a layer of financial complexity.

Often, it’s a difficult and emotional decision.

But if you decide to move, the excitement will kick in! That’s when it’s important to make sure you have all your ducks in a row so you don’t have to deal with any of the common pitfalls. So, if you do decide to move across the border, make sure you start the cross-border financial planning process early.

Now, let’s dive into the essential differences between living in Canada vs. the USA.

TABLE OF CONTENTS

1. Is Canada Right for You?
2. But What Is It Really Like To Live in Canada?
3. Main Differences Between Living in Canada and the United States
4. Pros and Cons of Living in Canada
5. Lifestyle of Living in Canada vs. USA
6. Life and Culture in Canada vs. the USA
7. Weather in Canada vs. the USA
8. Healthcare Costs in Canada
9. What Is Canada's Universal Healthcare System?
10. Education System and Going to University in Canada vs. the USA
11. Career Opportunities in Canada vs. the USA
12. Housing Costs in Canada vs. the USA
13. Cost of Living in Canada vs. the USA
14. Overall Cost of Living Comparison
15. Tax Differences Between the USA and Canada
16. Why Canada Might Be the Right Choice for You
17. Comparing Canadian Permanent Residency Visa and U.S. H1B Visas
18. Financial Planning for Professionals and Retirees Moving Across the Border
19. Common Questions About Living in Canada vs. the USA

Is Canada Right for You?

Which of these two countries is right for you?

Choosing a country to call home is a significant decision, and weighing the pros and cons of living in Canada versus the United States is crucial. Each nation has its unique characteristics and understanding them can help you make an informed decision about where to build your life.

Canada has many similarities to the United States and can be viewed as a mix of American and European ideals. Canada is a politically stable country with a buoyant economy that creates many well-paid jobs, and has top-notch education featuring multiple world-class universities, a diverse population, and a low crime rate. Finally, Canada's healthcare system is provided to its citizens nearly free of cost. Depending on where you live, there may be a small monthly fee. However, it’s a nominal sum compared to the lifetime benefits you gain from the system.

But What Is It Really Like To Live in Canada?

Living in Canada offers a diverse and inclusive experience. The country is known for its high quality of life, friendly and polite citizens, and stunning natural landscapes. If you’ve ever seen pictures of the Canadian Rockies, you’ll know that we have some beautiful wilderness in this country.

However, it's essential to delve into the specifics to determine if Canada aligns with your lifestyle and preferences.

Canada has one of the highest standards of living in the world and consistently ranks among the top 10 or 20 countries in the world for happiness. In 2023, it was ranked the 13th happiest country in the world.

However, Canada also has a very high cost of living, especially for those who live in major cities. Toronto and Vancouver have become particularly expensive. Also, winters can be long and harsh in most Canadian provinces, with snow and ice covering the ground in many areas for over half the year.

Taxes in Canada are much higher than those of most jurisdictions in the USA. However, these taxes do provide social benefits to Canadians who may be dealing with challenges like the loss of a job or a chronic illness.

Next, the average income is lower in Canada compared to the U.S. The monthly net salary (after tax) in Canada is C$3,915.92 while in the U.S., that number is C$6,080.22, according to Numbeo.com. More than 80 per cent of Canadians live in cities, and more than 66 per cent of the population lives within 100 kilometres of the U.S. border. This means that many people are living in cities despite the high costs.

One last consideration is the fact that while Canada does offer universal healthcare, there can be long wait times for non-urgent surgeries. In addition, finding a family doctor is nearly impossible in many big cities. That said, you’ll never have to go into debt to get essential care.

Main Differences Between Living in Canada and the United States

From cultural nuances to healthcare systems to housing, the differences between countries can significantly impact your daily life and happiness. Canada’s employment laws and customs are more closely related to the European view of work, with generous working hours and holiday time. Canada also has universal healthcare and a strong employment income program (EI). This safety net means there is less of a concern about people falling through the cracks. In addition, the wealth divide is less of an issue in Canada than in the U.S., which also means crime is lower. For example, in 2022, the homicide rate in Canada was less than half that of its neighbour.

Since Canada has few factories and a smaller population, the air tends to be much cleaner than in the U.S., and this may be part of the reason for Canadians' longer lifespans. Canada tends to be slower paced than the U.S.

However, there’s no denying that if you’re looking for a career or business opportunity, the U.S. wins out over Canada in most cases. As an economic powerhouse with many centres of innovation, the U.S. offers many professionals a chance to build careers that would be difficult to achieve in Canada.

Pros and Cons of Living in Canada

Pros

Canada is a vibrant country, economically and culturally. It has low crime rates, low poverty rates and world-class, free primary and secondary education. It has world-class universities. It has clean air and wide-open space. Canadians, on average, live longer than their U.S. counterparts.

Cons

Canada is a high-tax country. It also has a high cost of living in many areas. Moreover, many Canadians suffer through long and harsh winters (you’ll definitely need lots of Vitamin D if you move up here!). However, places like Vancouver and Victoria have a much milder climate.

Lifestyle of Living in Canada vs. USA

The lifestyle in Canada is influenced by cultural diversity, outdoor activities, and a strong sense of community. Contrast this with the lifestyle in the USA, where regional differences and a fast-paced life often prevail.

There’s also a very big difference between the prevailing culture in Alberta, the West Coast, and the East Coast. In addition, while both Toronto and Montreal are in the East, they do not have the same culture.

In the East, there is a greater emphasis on the arts and business. Alberta has strong traditional values and is similar to the states with which it shares southern borders. Meanwhile, the West Coast is focused strongly on recreation and outdoor activities. However, no matter where you live in Canada, most citizens have a strong interest in doing outdoor activities.

Canadians are generally more reserved than people in the USA and tend to be polite and less outgoing. If you’d like to be left alone, then Canada may be the place for you. The West Coast, in particular, is a very reserved place where people tend to live and let live. The East Coast and Prairies are typically more friendly and social.

Life and Culture in Canada vs. USA

Canada has a reputation for being polite and reserved, while the U.S. has a reputation for being confident and outspoken. Canada has a small population and is dependent upon immigration for economic prosperity. This has created a patchwork of cultures in Canada as opposed to the American melting pot. This patchwork is dynamic, as new immigrants arrive and plant roots in Canada, adding to the amazing cultural mix north of the border. However, the majority of Canadians consider themselves Canadian above all else.

Canada’s immigration system is well-organized and many provinces provide free language classes to new immigrants. Younger immigrants often enroll in these classes and become fluent in English or French after moving to Canada. There is an incentive to become fluent in English or French as a basic language test is required if one wishes to become a Canadian citizen.

Weather in Canada vs. USA

Canada's climate varies significantly from region to region. Areas on the West Coast, like Vancouver and Victoria, have temperate climates with little snow and few hot summer days. The interior of the country is much colder and can experience very hot summers.

The U.S. has a much broader array of options. The north is cold and snowy in the winter and can be very hot in the summer. The south experiences heat in the summer and little cold weather. Alaska is much like northern Canada, while Hawaii has an ecosystem unique to itself.

Healthcare Costs in Canada

Canada boasts a universal healthcare system, but it's essential to explore the associated costs and coverage. Canadian healthcare is structured so that citizens and landed immigrants have free access to what is needed. There is no cost for inpatient or outpatient care, and prescription drug prices are inexpensive.

In 2022, Canada paid around $300 billion annually on healthcare. This represents around 13 per cent of gross domestic product (GDP). This is part of the reason for Canada’s high tax rates.

When you move to Canada, it typically takes three months for your healthcare to kick in, depending on the province. So, you will need health insurance for the first while.

One more interesting fact about Canada that relates to health is monthly gym membership costs. According to a recent analysis of gym membership fees around the world, Canada has some of the most affordable gyms. Canada’s membership fees were an average of $15.91 per month. Of course, Canada also has high-end gyms in all the major cities with higher costs and luxury amenities. With a large focus on health, you can find many health-promoting facilities in all major Canadian cities.

What Is Canada's Universal Healthcare System?

The Canadian universal healthcare system is funded through Medicare. Medicare was created by the Canada Health Act. The Canada Health Act has five pillars. The system must be universal, administered publicly, have comprehensive coverage, be portable across provinces and be accessible to the population. Medical care in Canada cannot be refused to anyone, including foreign nationals, even if they are non-citizens or undocumented immigrants.

Education System and Going to University in Canada vs. USA

Both the USA and Canada have excellent universities. While U.S. public schools have come under fire in recent years, Canadian public schools are still considered excellent. Canadian primary and secondary schools have been consistently ranked as world-class, as have Canadian universities. In addition, post-secondary costs in Canada tend to be much lower than in the U.S. For those living in Quebec, full-time post-secondary education is free.

Career Opportunities in Canada vs. USA

Canada has modelled much of its employment standards on European models. This means that employees have many protections, long vacations and a more relaxed view toward work. The U.S. can offer more opportunities, higher pay and lower taxes.

Housing Costs in Canada vs. USA

In general, house prices are much higher in Canada than in the U.S., though pockets in the U.S. have prices at the same level as Canada’s major cities or even higher. Both Canada and the U.S. have high immigration levels, though immigration in Canada tends to be focused on already high-density areas such as Toronto or Vancouver. This rapid population increase has pushed values up sharply in Canada. Those who live outside the major population areas in both Canada and the U.S. can secure less expensive housing but may not have the same work or cultural opportunities.

While both Canada and the U.S. are fairly expensive to live in, there's no denying that housing costs in Canada have increased dramatically over the past few years. At this point, Canada is the more expensive of the two. In fact, housing prices have been higher in Canada than the U.S. since the 90s.

Cost of Living in Canada vs. USA

The cost of living appears to be somewhat higher in Canada than in the U.S. Canada, across the board, is expensive. However, so is the U.S. In Canada, housing costs are high, taxes are high, and the cost of groceries is high. In return for the high taxes, Canadians receive safe cities, universal healthcare and an employment system that protects them from wrongful termination and other abuses.

The U.S. is generally cheaper for some consumer goods; however, healthcare and health insurance are much higher than in Canada.

To find out the actual cost of living as well as information about inflation, you can find consumer prices on the Government of Canada’s Consumer Price Index page. According to Numbeo.com consumer prices are 6.5 per cent higher in the U.S. than in Canada without rent. However, local purchasing power is 38.4 per cent higher in the U.S.

Also, keep in mind that luxury activities cost slightly more in Canadian cities than in small towns. For example, golfing, going out to a nice restaurant, or visiting a spa would cost less in a smaller town than in Vancouver or Toronto.

USA and Canada cost parameters include:

• Housing Costs
• Utilities
• Food and Groceries
• Transportation
• Healthcare
• Education
• Taxes
• Childcare
• Entertainment and Leisure
• Consumer Goods
• Insurance

To get the full picture, you’ll want to check the average cost for each of these categories in the place you plan on moving to.

Overall Cost of Living Comparison

The overall cost of living can vary significantly depending on the specific regions or cities being compared within each country. Major urban centres in both countries, such as New York City in the U.S. and Toronto or Vancouver in Canada, tend to have higher living costs compared to smaller cities or rural areas.

• United States: The U.S. offers a wide range of living costs depending on the state and city. States like Mississippi, Alabama, and Arkansas are known for their low cost of living, while California, New York, and Hawaii are on the high end. The U.S. also typically has lower consumer goods and fuel prices compared to Canada.
• Canada: Canada's cost of living can also vary widely. While cities like Toronto and Vancouver have high living costs, other areas like Quebec City and Halifax have more moderate costs. Taxes and overall healthcare costs are generally higher in Canada, but the country offers a broader range of social services.

When including the cost of housing in the calculation, the answer to whether Canada or the U.S. is more expensive to live in 2023 depends significantly on the specific locations compared. On average, certain areas in the U.S. might offer a lower cost of living than Canada, mainly due to lower housing costs outside of the major metropolitan areas.

However, the overall cost of living also includes healthcare, education, taxes, and other factors, where Canada's social policies may reduce out-of-pocket expenses for its residents.

To get a precise comparison, one would need to look at specific cities or regions within each country, considering the full range of living expenses, including housing. Additionally, exchange rates and economic conditions can also impact the cost of living for individuals moving between the two countries.

Tax Differences Between the USA and Canada

As cross-border advisors, we are constantly running the tax numbers for our clients on both sides of the border. Federal taxes in the U.S. are much lower than taxes on capital gains. Some states, like California, have tax regimes similar to Canada. Also, property tax in many parts of the U.S. is higher than in Canadian cities.

The U.S. does not have a tax-free principal residence exemption and only offers USD$250,000 per individual as tax-free for a principal residence sale. Also, the U.S. has inheritance taxes, though the threshold to hit this tax is presently quite high. However, it is expected to be reduced shortly.

Why Canada Might Be the Right Choice for You

Many people who choose Canada love the more relaxed and safer environment Canada offers. They enjoy knowing that their healthcare is taken care of, as well as the polite, easygoing nature for which Canadians are famous. They enjoy the crisp, clean air in the winter and the cooler nights in the summer. They enjoy the great outdoor spaces for camping and skiing.

Others come to Canada from around the world for the many educational institutions or for work opportunities.

Comparing Canadian Permanent Residency Visa and U.S. H1B Visas

The path to citizenship in Canada is much faster and simpler than in the U.S. Permanent residents in Canada can apply to be citizens after only three years of being in Canada. In the U.S., for H-1B holders, it can take years to obtain their citizenship. They would initially have to wait for their green card and then wait even longer to obtain citizenship.

Financial Planning for Professionals and Retirees Moving Across the Border

The rules and regulations around people moving across the border have tightened up a lot, recently. This is especially true for those who have investments or own property.

In most cases, U.S. investment advisors are not able to work with clients who live in Canada. Likewise, most Canadian investment advisors are unable to work with those living outside Canada. You need to find a dual-licensed financial advisor and accountant if you want to navigate cross-border financial planning effectively and without falling into tax traps.

Also, certain investments, such as mutual funds or exchange-traded funds, cannot be held by many of those who have crossed the border. The rules are complex, and we strongly advise those who are planning a move to consult a dual-licensed financial advisor in Canada before a move either way.

Common Questions About Living in Canada vs. USA

Do you need health insurance in Canada?

Though the universal healthcare system provides for many essential medical treatments, many people’s healthcare needs can extend beyond what is covered. In this case, purchasing health insurance makes a great deal of sense. For example, dental care is not covered by the Canadian government.

Understanding the healthcare system is crucial, including whether you need additional health insurance coverage.

Which country is more beautiful?

The U.S. has many amazing places to see and visit, as does Canada. This is a question of personal taste, and both countries can be experienced, no matter which is chosen for permanent residency.

Can I live in Canada if I am a U.S. citizen?

American citizens can live in Canada, though, if they plan on being in the country for more than 180 days or plan to work in Canada, a work permit or visa is necessary.

Is it cheaper to live in Canada or the U.S.?

The U.S. is generally more expensive than Canada, depending on your lifestyle and where you live. If you’re moving from a small town in the U.S. to a big city in Canada, then you’ll find that your cost of living will go up in Canada. Essentially, it depends on where you live.

Is the Canada PR better than the H-1B?

It is generally quicker and easier to use the permanent residency path to become a Canadian citizen than with the H-1B visa in the U.S.

Can I go to Canada with an H-1B?

The H-1B visa allows a person to work in the U.S. but does not automatically allow access to Canada. To visit Canada, an H-1B holder would most likely either need a visitor visa or an Electronic Travel Authorization (ETA). This is dependent on the nationality of the visitor.

How do I keep my PR and H-1B in Canada?

This can be tricky since maintaining PR means you have to live in Canada for two out of five years. In order to do both, you could live in a Canadian border town, commute to the U.S. for work, and then return within 24 hours.

Final Thoughts

Choosing between living in Canada and the USA is a significant decision that involves weighing various factors. Conduct thorough research, consider your priorities, and seek professional advice to ensure a smooth transition to your new home.

The choice of where to live is a highly personal one that involves many factors. It’s certainly important to consider living costs as well as lifestyle. Once you make a decision based on creating personal happiness, we suggest seeking out the necessary legal, accounting, and financial planning to make sure everything is lined up perfectly.

Summary of Key Points

The key reason that many people choose to move or return to Canada is lifestyle. Canada boasts clean and safe cities along with free healthcare and world-class education. It also has beautiful scenery, cultural diversity and friendly citizens. Those leaving the U.S. may miss the consistently warmer weather in the southern U.S., lower taxes and cheaper living expenses.

This is a very personal decision.

NEXT STEPS

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

READ MORE

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

Moving to Canada from the US

Cross-Border Estate Planning Guide

Certified Financial Planner in Canada - Finding a Fiduciary

ABOUT THE AUTHORS

Tiffany Woodfield is an Associate Portfolio Manager licensed in Canada and the USA, a Chartered Investment Manager (CIM), a Chartered Retirement Planning Counselor (CRPC) a STEP Associate and the co-founder of SWAN Wealth Management, along with her husband, John Woodfield. Tiffany advises clients who live in Canada and the United States and want to simplify their cross-border financial plan, move their assets across the border, and optimize their investments to minimize their tax burden. Together, Tiffany and John Woodfield help their clients simplify their cross-border finances and create long-term revenue streams that will keep their assets safe whether they live in Canada or the U.S.

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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