This question is part of an age-old debate between the two largest nations of North America. The societies of both Canada and the United States hold the view that their own country is the better place to live. Generally, neither country knows all the facts about what the other country has to offer. So, which is better: Canada or the United States?

Economics

Canada’s fourth-quarter 2019 gross domestic product (GDP) was less than $2 trillion, while the United States reported a GDP of $21.73 trillion. While the U.S. is a much larger superpower in terms of the economy, the incomes of citizens are much more closely aligned. The U.S. Census Bureau reports the median income for U.S. families at $63,179. In Canada, the median income ranges from $45,220 to $89,610.

Key Takeaways

  • The U.S. and Canada are two countries in North America with many similarities and quite a few important differences.
  • While the United States is much larger than its northern neighbor in terms of GDP, average income per capita is similar in both places.
  • While people generally pay more in taxes in the United States, Canada offers superior social benefits.
  • The cost of attending a university and expenses for health care are typically less in Canada.

Taxes can also be a key differentiator for the two countries. Canada has a higher average practical tax rate than the United States at 28%. Business Insider reports that, after taxes Canadians bring home is roughly $35,500 annually on average. In the United States, the practical tax rate is lower at 18%. As such, the average post-tax annual salary in the U.S. is slightly above $52,000.

According to the website "numbeo.com", the cost of living is higher for Americans than Canadians. The Numbeo Cost of Living Index for the U.S. is 69.91 compared to 65.01 for Canada. This Index looks at rent, groceries, restaurant prices, and local purchasing, which are all higher collectively in the United States ($ in USD):

Rent for a one-bedroom apartment: $1,536.22 in Toronto, Canada vs. $3,116.43 in New York City, United States

Food: a loaf of bread 95 cents in NYC vs. 59 cents in Toronto; 0.15 kilogram of chicken breast $1.96 in NYC vs. $1.88 in Toronto; meal at an inexpensive restaurant $14.90 in Toronto vs. $20 in NYC; cappuccino $3.15 in Toronto vs. $4.47 in NYC

Transportation: one-way local transport ticket $2.42 in Toronto vs. $2.75 in NYC; taxi one mile $2.16 in Toronto vs. $2.70 in NYC

Clothing: one pair of Levi’s jeans $52.59 in Toronto vs. $53.74 NYC; one pair of Nike running shoes $79.64 in Toronto vs. $86.69 in NYC

Family Benefits

Spending time with your children as they grow up can represent a great financial need of parents. How does each country support new mothers and fathers?

Canada

Canada has mandated leave and benefits. The government supports this through provincial employment insurance. The program includes both mothers and fathers. Benefits paid could be up to $573 per week.

The U.S.

The United States is less progressive in this area. The U.S. offers some support under the Family and Medical Leave Act (FMLA). FMLA can allow for 12 weeks of unpaid leave. Individual states also have their own laws.

Health Care

The United States has the highest health care costs in the world. Per capita, individuals can expect to pay approximately $10,739 annually. This compares to an annual average of $7,068 for Canadians.

Education

University can be another large expense in a person's life and puts many students deep in debt. Student Loan Hero shows the United States tops the list for university costs, with averages falling behind only the United Kingdom. Average annual tuition at a public college in the U.S. is estimated at $8,200. For a private college, the average annual cost increases to $21,200. Canada ranks fourth for the cost of university. In Canada, the average annual tuition at a public college is estimated at roughly $5,000.

Montreal is the largest city in Quebec, Canada where many residents are bilingual, speaking both French and English. In fact, according to Census Canada 2016, 20% of Canadians claim French as their native language.

The Bottom Line

The United States is a larger global superpower and as such, Americans can expect to pay more in nearly every aspect of living. People in the U.S. and Canada generally have similar annual incomes. However, taxes are reportedly lower in the U.S., which can offer Americans a slight take-home pay advantage.

In the area of social benefits, Canadians have a somewhat stronger government-mandated family program with greater government funding for maternity leave through employment insurance programs. Canadians can also expect to pay less for health care costs. Furthermore, educational university costs are also lower (on average) in Canada, which could be a final factor that tempts many citizens across the border when considering long-term family planning.