Is Canada or the USA more Expensive?

Living Standards in Canada and the US

When it comes to the living standards in each country, the reality is that both countries have good standards of living. That being said, there are differences between the two. The first one is healthcare. The USA is one of the most expensive countries in the world when it comes to healthcare costs, even if you have health insurance. In Canada, healthcare is structured a bit differently. If you are a Canadian citizen or permanent resident, then healthcare is paid for with your taxes and do not have to pay for individual visits.

Taxes and Tax Brackets in the US Vs Canada

Whether you pay taxes in the US or Canada, how much you pay is based on your tax brackets. While each state and province has its own rates, both countries also have federal rates. These are the Canadian Federal rates for tax deductions in Canadian dollars:

Here are the US Federal rates:

That said, these amounts change in the US when you file jointly or are considered the head of the household. They’re also in USD, which looks a bit different in the Canadian market based on the value of the Canadian dollar. 

These rates are only for income. Property taxes are decided by each state or province based on the value of your home. Both US residents and Canadians pay these amounts where they live. 

Finding a Job in the USA vs Canada

The difficulty in finding a job in the USA or Canada really depends on your status. It is much harder for an immigrant than it is for someone who was born in that country. For this reason, it is much more difficult to get a job in Canada than it is in the USA. This is because a lot of Canadian companies want Canadian work experience. If you are an immigrant who did not emigrate with a Canadian job offer, it is likely that you don't have that. This is not the case as often in the US, which makes it much easier to obtain a job there.

As a citizen, the average Canadian or American, in their own country, doesn’t have too much difficulty finding a job and there is equal job security in either country, as long as you have some experience, are a skilled worker or have some education under your belt. The economies are relatively equal so there isn’t a huge difference in this regard.

Jobs in the US vs Canada

When it comes to getting a job in Canada or the US, both offer great positions with a good quality of life. That said, there are some downsides to working in both countries.

The difference between working in the US and Canada is there are more overtime hours. In Canada, there’s less of a focus on working overtime, and some parts of the country are even starting to introduce 4-day work weeks. You can still get great health benefits in the US, but you’re likely to get more vacation time, paid travel, and paid maternal and paternal leave. In the US, though, tax rates do tend to be a bit cheaper. Ultimately, though, both countries have a great job market.

Which Country is More Beautiful?

In this category, Canada is ranked as number 2 in the world whereas the US is ranked at number 9. The reason for this is that Canada has so many diverse landscapes. There is so much natural beauty that is home to so many different animals. It really doesn’t matter where you go, there will be someplace to see. Like Lake Louise in Alberta, Whistler Blackcomb in BC, or even just the landscapes in the Maritimes. There is so much to be seen when you’re paying attention. 

Salaries in the US vs Canada

While the differences aren’t large between earning amounts in Canada and the US, Americans actually have higher average salaries than Canadians. The average salary for Americans is $56,690, and it is about $43,867 in Canada. These are both in USD. The main difference, though, is that you do rely on post-secondary education to get a higher-paid position in the US. In Canada, there are more Canadians earning above the average income that do not have any post-secondary education.

There are a few reasons why salaries are higher in the US. These are;

• higher operating costs
• supply and demand
• cost of living
• venture capital culture

All of these factors give the US an advantage in having a higher salary average. The operating costs in Canada are much higher than those of the states. This is mostly due to the fact that there are different taxes and regulations in each country. That being said, the cost of living is lower in Canada, which does account for some of the salary. The US’s higher salary will make up for some of that. The US is also much larger, so it has a broader range of supply and demand. Lastly, the US has a much higher VC culture, mostly because there is a much larger population. This means there are more startups hiring more employees.

Housing Costs in Canada Compared to the US

Currently the price of housing in Canada is over double than that of in the US. It has steadily increased since 2020 more than 30%. Interest rates in Canada have now spiked to help combat the housing prices, it is going to take a while leaving the housing prices much less affordable than anywhere else.

In the US, housing prices have gone up around 27%, ultimately forced by inflation, in the same time period that housing prices in Canada increased a lot. They are not nearly as expensive as the Canadian housing market, but they are still higher than normal.

The reason for these increases has a lot to do with the pandemic. This resulted in a lot of people working from home or needing more space. This caused a lot of buying and selling in the market. Pair that with lack of housing and the result is a major spike in housing prices.

The rental market is also more expensive in Canada than it is in the US. It is roughly an average difference in rent of $100 per month between Canada and the US. This is relative though. It ultimately depends on where you are in each country.

Cost of Living: Canada Vs the US

While the US does tend to have higher salaries, it’s actually cheaper to live in Canada. Here are some examples of how the cost of living is lower.

As you can see, it’s slightly cheaper to live in Canada than in the US, but ultimately, the total cost will depend on where you live in each country.

Areas of the USA that are more Expensive

Just like any other Country, there are some places that are more expensive to live in than others. In the US, some of these places are:

• New York
• San Francisco
• Honolulu
• California

The main reasons for this is the cost of housing and other things like transportation or food. Where you live really affects these things. Places with denser populations, closer to city centers, and popular travel destinations tend to be much more expensive than smaller less popular cities. Usually the farther from the city center you are, the cheaper it is.

Areas of Canada that are more Expensive

In Canada, this is the same premise. More populated cities like Toronto and Vancouver are much more expensive to live in than smaller places in more rural areas. Luxury activities cost slightly more in major cities. An example of this is going to a restaurant. In Canada, restaurants can be quite expensive no matter where they are located, but even more so in high-traffic areas. The common thing for all of these places is that the cost of housing is high. This is because there is a large demand for housing, so the prices keep increasing. Since housing prices in Canada are already extremely high, many Canadians are starting to avoid these expensive cities for more rural areas. Because of this, the prices in these areas are increasing as well, but they are still not as expensive as in major Canadian cities.

Ultimately, the cost and living standards aren’t only going to vary in the country that you live in, but also where you live in that country. Things like monthly gym membership costs, the education system, living costs, housing costs, social benefits and even consumer prices are all impacted by this.

Employment Insurance Benefits: US Vs Canada

Another thing to consider when comparing the cost of living in the US and Canada is Employment Insurance benefits and how they work in each country. 

EI Canada

In Canada, Employment Insurance is available when you’re unable to work due to no fault of your own. It’s also a federal program, so you don’t need to apply to your province. Instead, you apply with the federal government, and the rates are the same for everyone. 

If you’re on sickness benefits in Canada, you can get up to 26 weeks of pay. For regular benefits, you can get up to 45 weeks based on the province that you live in. However, these aren’t the only benefits you can get through federal EI. You can also get benefits for:

• Caregiving
• Maternity leave
• Parental leave

With the EI Caregiver benefits, you can still receive up to the maximum amount of EI which is $668 per week. You can get up to 35 weeks when you’re caring for a critically ill child under the age of 18 and up to 15 weeks for adults. When you’re caring for someone in end of life care, you can get up to 26 weeks.

When it comes to maternity benefits, you can get up to 15 weeks, with the amount maxing out at $668 per week. That said, you can also choose to go on parental benefits. With these benefits, you have two choices. You can choose 12 months, or 18 months. With the 12-month parental benefit, you still get the maximum. However, with the 18-month benefit, the maximum you can get is $401 per week. 

That said, when you apply, it’s important to remember that what you can get for benefits is based on your annual income. Benefits are 55% of your annual income, up to the maximum of $63,200 per year. If you make more than this, then you’ll receive the maximum benefit. 

Employment Insurance United States

If you’re unemployed due to no fault of your own in the US, then you could be entitled to some benefits through Unemployment Insurance through the United States Department of Labor. This program works differently than the Canadian EI program. 

In the US, the Unemployment Insurance program is a joint state-federal program that provides benefits to workers. That said, each state has their own separate program with their own eligibility requirements. They all follow the same federal guidelines, though. 

The general requirements include:

• Being unemployed by no fault of your own, lack of available work
• Meeting your state work and wage requirements
• Meeting any additional state requirements

Unlike Canada, the US doesn’t offer any sickness, caregiving or maternity benefits through their unemployment program. You can get up to 12 weeks through the Family and Medical Leave Act for certain sickness situations. Any maternity leave benefits are done through the employer if they offer them. 

Other Differences Between the US and Canada

While we’ve already discussed which is the most expensive country to live in, there are othe differences between the countries that we haven’t discussed yet. These include things like sales tax, carbon tax, social programs, consumer goods, and even extra taxes. You also have to consider the cost of higher education, which includes the difference between US education and Canadian education like McGill University. 

Even though we’ve already looked at the living comparisons between the two countries, we haven’t considered the federal rebates that Canadian consumers get. In most provinces, like Nova Scotia, Canadians can save money on natural gas with carbon tax rebates. 

One of the largest differences between Canada and other countries are presidential elections. The United States has a President unlike their Canadian counterparts that have a Prime Minister. The election process intself is very different due to the fact that the US is considered to be one of many large countries, so there are more voters. 

Moving to the US From Canada

If you’re considering moving to the US, it’s hard to say if that’s the right thing to do or not. It really just depends on your reasons for moving and what you gain by moving there. While there are still plenty of opportunities in Canada and most countries, there are plenty of great opportunities in the US as well. The cost of living there is just slightly higher, but they have lower taxes. All in all, there are pros and cons to living in both countries, so you just have to figure out which is best for you.

Conclusion

Overall, both Canada and the US are fairly expensive to live in. Canada has much higher housing costs, but healthcare costs are much higher in the US. While US salaries are slightly higher, Canadians have a much easier time making a higher salary with less education. Honestly, both countries have positive and negative aspects when it comes to affordability. Overall, though, the Canada cost parameters are lower. This means overall, the cost of living and consumer prices are higher in the US, which justifies the higher wages. The affordability of these places is hard to base on an average because it all depends on the career that you choose as well. While the US has more startup companies and educated positions, a lot of Canadian careers are in other fields like trades. These things also make a big difference in which country is better.