For business owners, expats, digital nomads, and retirees, both Canada and the United States have a lot to offer. Each of these nations offers wonderful landscapes, exciting recreation, and diverse communities to call home.
However, the cost of living in the US vs. Canada often varies. This is especially clear when observing variations in housing, healthcare, and transportation. Across both nations, these structures are set up differently, with each system offering various tradeoffs.聽
In this guide, we鈥檒l take an in-depth look at the cost of living in Canada vs. US. We鈥檒l also dive into regional disparities, taxes, finding a job, and much more. Whether you鈥檙e a traveling remote worker or a retiree looking to settle down, we鈥檒l provide all the details you need to make an informed decision.
Is it More Expensive to Live in Canada Than the US?
The average cost of living in Canada vs. US varies depending upon a number of factors. Though in most cases, it鈥檚 about 10% more expensive to call America home. After all, cities in San Francisco and New York cost considerably more than their counterparts in Canada. This is a common theme that we鈥檒l further explore later in the guide.聽
As we get into the cost of living in US vs. Canada, we can鈥檛 forget about the variations in maternity benefits and overall healthcare spending. This plays a major role and, surprisingly, the differences are quite stark.聽
At the federal level, America does not offer any paid maternity (or paternity) leave. Some individual employers in the United States do provide paid leave for expecting families; however, it鈥檚 entirely at their discretion and not at all a federal mandate.聽
Canada, on the other hand, delivers a moderate level of income for up to six months to help expecting families. This comes on top of a guarantee to reemploy said workers if they鈥檝e been away for an extensive time period. Many people have praised Canada for this and urged the United States to improve its maternity and paternity leave policies.聽
The same dynamics are ever present when assessing healthcare as it pertains to the cost of living in the US vs. Canada. America鈥檚 medical services are considerably more expensive with the average person spending $12,914. Canadian residents, on the other hand, only pay $6,500 on average. US citizens are also more likely than their northern counterparts to pay out of pocket for healthcare.
The aforementioned price variations between both countries aren鈥檛 without notable trade offs. While healthcare in America is considerably more pricy, it also comes with shorter wait times for non-life-threatening and elective procedures. US wait times can extend all the way to 14 weeks, whereas in Canada, 27.4 weeks is closer to the norm.
Regional Cost of Living Disparities
Both America and Canada are very big countries. As such, the average cost of living in Canada vs. US can fluctuate depending on the region you settle down in. Let鈥檚 take Toronto vs. New York City, for instance.聽
Both urban cities are based in the southeast and popular powerhouses within their respective nations. They鈥檙e also home to plenty of museums, green spaces, cultural centers, and other desirable amenities. Yet, New York City鈥檚 cost of living is 81.5% higher once you factor in rent. Toronto鈥檚 rent prices, on their own, are 135% less expensive than New York City鈥檚.聽
The Canadian city鈥檚 purchasing power is 13.4% higher, while its costs for purchasing groceries and dining out are each 43% less expensive than New York City鈥檚. By this metric, if you鈥檙e looking to live on a budget, Toronto would be the preferable option.聽
Across virtually all regions, you鈥檒l notice some common themes in the cost of living in US vs. Canada. America鈥檚 taxes are lower, but so are the amount of social services readily available to the public.聽
As you learn about the regional cost of living disparities in both countries, it鈥檚 important to take these nuances into consideration.
Access to Public Transportation
While the United States heavily relies upon cars and private transit, Canada鈥檚 transportation system is much more geared towards public use. This is not to say that major American cities lack access to public transit. Nevertheless, Canada is famous for having one of the world鈥檚 most secure and safe transportation systems.聽
It鈥檚 also important to remember that fewer Americans than Canadians depend on public transportation. If having easy access to trains, bus, and other similar resources is a high priority in your day-to-day life, then Canada may prove to be a better option.
Rideshare fans will be pleased to learn that both nations have access to top apps like Lyft and Uber. This not only streamlines getting riders from point a to point b, but it also affords drivers the opportunity to supplement their incomes. If you rely heavily upon rideshare, you鈥檒l be able to find either Uber or Lyft in most US and/or Canadian cities.
Cost of Renting vs. Owning a Home
Whether you choose to rent or own a home will have significant impacts on your cost of living in Canada vs US.聽
Renting a one bedroom residence inside the city center is slightly more expensive in America than Canada. However, if you鈥檙e wanting to rent a one bedroom residence outside of the city center, it鈥檚 a little more affordable to do this in Canada than the United States. On average, your monthly rent prices for these accommodations will fluctuate between about $1,375 to $1,692.聽
For interested homebuyers, the average property in Canada is about 19% more costly than US residences. British Columbia stands out as the most expensive Canadian province to purchase a home, while California is the priciest US state for homeowners.聽
For further context, America鈥檚 median home value stands at about $346,000 and Canada鈥檚 median home value shakes out to roughly $487,540.
Taxes in the US vs. Canada
Differences in tax structures are paramount factors that influence the cost of living in US vs. Canada. America, for starters, offers a series of tax deductions that Canadian residents don鈥檛 have access to. However, Canada鈥檚 top federal tax rate stands at just 33%, while the wealthiest US citizens can pay taxes as high as 37%.
Unlike certain American states which forgo income taxes, every Canadian province and territory impose income taxes upon residents. On another interesting note, your income level will greatly impact the amount of tax you pay in either country.
More often than not, if you鈥檙e interested in paying less tax, you may prefer living in the United States. However, if you value easy access to social services, Canada could prove to be a better alternative for you.
Many people who are on fixed incomes and don鈥檛 want to pay out of pocket for healthcare and other services find Canada鈥檚 structure to be more to their liking. Though others who are interested in higher levels of take home pay view the United States鈥� structure as more preferable.聽聽
With few exceptions, poorer Americans generally pay more tax to the government than poorer Canadians. Though for folks with considerable means and resources, they鈥檙e likelier to pay less tax in the United States than in Canada.聽
This is such a point of contention in America that certain lawmakers have been rallying to raise taxes on the wealthy. Though as it stands today, Canada鈥檚 tax system is more favorable to the poor, while the United States鈥� tax system affords the rich notable perks and benefits.
Living Costs in Canada vs. the US
By all accounts, both the United States and Canada have high standards of living. These are wealthy, western nations with ample infrastructure, job opportunities, and innovation. With that in mind, each of these countries come with notable tradeoffs that impact the average cost of living in Canada vs US.
From an objective standpoint, America holds a higher median income than Canada, yet Canada is more affordable. Taxes and social services each play a direct role in the affordability and average costs across both nation鈥檚 regions and communities.聽
On the world stage, America is, by far, a much bigger superpower. This is a factor in it typically carrying a higher cost of living than Canada. Though in both countries, average annual incomes for varying demographics are quite similar.聽
Healthcare and education cost less in Canada, but remains subsidized via higher tax rates. Despite Americans paying less in taxes, some still find their neighboring nation鈥檚 lower healthcare and education prices to be attractive.
Finding a Job in the USA vs. Canada
By all accounts, America boasts a bigger job market than Canada, which inherently offers more economic and career opportunities. This is reflected via the 84% of Canadian Waterloo Software Engineering undergraduate students who end up moving to the United States after completing their education.聽
The type of job you鈥檙e looking for will also impact your prospects, along with your cost of living in Canada vs. US. Remote work, freelance jobs, and other similar positions have increased over the years. This can play a pivotal role in not just work-life balance, but also receiving more competitive salaries.聽
Many digital nomads, based in the United States and Canada alike, partake in remote work and enjoy the flexibility it offers. For digital nomads who are freelancing or otherwise self-employed, they have the luxury of setting their own rates for services that can actually surpass the average salaries in both countries.
If you鈥檙e seeking more traditional employment, however, America may prove to be a better location, just owing to its substantial job market. Even big tech companies in the United States are known to pay way more than their Canadian counterparts.聽
All in all, Canada is simply home to fewer people, which leads to less major companies and fewer job opportunities. This doesn鈥檛 mean America is the only reliable place to find work. Nonetheless, depending on your occupation, finding a job in Canada may take longer and lead to a lower salary, especially when you factor in the nation鈥檚 higher tax rates.
Safety in the USA vs. Canada
America carries a higher crime rate than Canada by all accounts. While this may seem removed from the fiscal cost of living in the US vs. Canada, it鈥檚 an important detail to remember before booking any flights.聽
Various officials have differing opinions on why America suffers from more crime than Canada. Some have attributed it to the United States鈥� 17% poverty rate. Canada鈥檚 poverty rate, on the other hand, stands at 12%. Many experts also feel that poverty motivates people to commit certain crimes out of desperation.聽
Access to firearms is another factor. While Canada is known for having strict gun regulations, the same cannot be said about America. Certain US states are stricter on firearms than others. However, in the big picture, it鈥檚 much easier to procure a gun in the United States than in Canada.聽
This has paved the way to various mass shootings in malls, schools, and other public spaces. Casualties of this nature indirectly impact the cost of living in the US vs. Canada, as the demand for healthcare services, local repairs, and other accommodations increases after mass shootings.
The Bottom Line
In this guide, we鈥檝e had an in depth look at the cost of living in US vs. Canada. This includes not only exploring regional disparities, but also reviewing the two nations鈥� varying dynamics as they pertain to taxes, home ownership, and jobs.
Along with discovering the differences between these two countries, we鈥檝e had a thorough look at their similarities as well. Both Canada and the United States are wealthy, western nations with access to high-quality infrastructure, educational opportunities, and rideshare services.聽
Whether you鈥檙e a digital nomad, retiree, or just someone looking for a new change of pace, both America and Canada have a lot to offer. Some people are drawn to the United States鈥� bustling innovation and opportunities, whereas others appreciate Canada鈥檚 built-in social safety nets.聽
Whatever decision you make, this guide is an essential part to knowing what鈥檚 most important to you. Feel free to share with anyone else you know who may be considering a move or wondering about the average cost of living in Canada vs. US.
Frequently Asked Questions
Is it more expensive to live in Canada or the US?
It is not easy to generalize the cost of living expenses in Canada compared to the U.S., as every region and city may have different results. However, there are some factors that may affect which country is more expensive in terms of living, such as considering the Canadian dollars exchange rate that can have an impact on the cost of living.
Are healthcare costs higher in the US vs Canada?
The US has significantly higher healthcare costs than Canada. It is common in the US for individuals to purchase health insurance through their employers. However, in Canada, it is a publicly funded healthcare system.
Are salaries lower in Canada?
It can change depending on the industry you are working in, your job position, or your location in both the US and Canada. The US salaries may be higher on average. However, there are some other factors to consider, such as housing costs and consumer prices. Major Canadian cities may have higher living expenses. If you are moving to Canada from the US, it is also better to consider Canada cost parameters like average income in the country. The expenses also depend on your living preferences, and you may need extra budget considerations like monthly gym membership costs.聽
Do you get taxed more in Canada or USA?
Both Canada and the US have progressive income tax systems. It means that higher earners pay a higher percentage of their income in taxes. However, the specific tax rates and deductions can vary between the two countries. However, when comparing federal tax brackets, the US generally has higher marginal tax rates for higher income levels.
