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?
- 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, the 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 healthcare are typically less in Canada.
Canada’s 2019 gross domestic product (GDP) was $1.73 trillion, while the United States reported a GDP of $21.4 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 $68,703. In Canada, the median income for 2019 was $62,900.
Taxes can also be a key differentiator for the two countries. While U.S. federal income tax brackets span from 10% to 37% for individuals, in Canada, tax rates are between 15% and 33%. However, in the U.S., singles making over $40,526 annually pay 22% in taxes, whereas Canadian singles making less than $49,020 only have to pay 15% in taxes.
According to the website numbeo.com, the cost of living is higher for Americans than for Canadians. The Numbeo Cost of Living Index estimates that consumer prices in Toronto are about 24.05% lower than in New York City, and Toronto's rent price is approximately half the price of renting an apartment in New York. This Index looks at rent, groceries, restaurant prices, and local purchasing, which are all higher collectively in the United States ($ in USD).
|U.S. vs. Canada: Cost of Living (all prices in US$)|
(New York City)
|Rent (monthly) for a 1-bedroom apartment||$3,070.29||$1632.49|
|Monthly utilities (electricity, heating, cooling, water, garbage)||$156.04||$141.85|
|Bread (1 lb)||$3.65||$2.08|
|Chicken (1 lb)||$6.01||$4.87|
|Meal, Inexpensive Restaurant||$20.00||$16.27|
|One-way Ticket (Local Transport)||$2.75||$2.64|
|Taxi (1 mile)||$3.00||$2.62|
|Pair of Levi’s Jeans||$62.97||$60.18|
|Pair of Nike Running Shoes||$90.18||$87.78|
Spending time with children represents enormous financial needs of parents. How does each country support new mothers and fathers?
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 $595 per week.
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.
The United States has the highest healthcare costs in the world. Per capita, individuals can expect to pay approximately $11,172 annually. This compares to an annual average of $7,064 for Canadians.
University can be another large expense in a person's life and puts many students deep in debt. The United States tops the list for countries with the most expensive university costs, with Canada coming in fourth. The average annual tuition at a ranked, in-state public college in the U.S. is estimated at $9,687, while the average annual tuition at a private college was $35,087.
According to the National Center for Education Statistics, undergraduate tuition, fees, room, and board were estimated to be $17,797 at public institutions, $46,014 at private nonprofit institutions, and $26,261 at private for-profit institutions. In Canada, the average annual tuition at a public college in 2020-2021 was $6,580 Canadian dollars.
Montreal is the largest city in Quebec, Canada where many residents are bilingual, speaking both French and English. In fact, according to Census Canada 2016, 20% of Canadians claim French as their native language.
Climate and Culture
Both the United States and Canada are large countries spanning from the Pacific Ocean to the Atlantic Ocean coasts, meaning their climate and culture vary greatly by state or province. As a whole, the United States is more densely populated and warmer than Canada, being nearer to the equator.
Can I Live in Canada If I Am a U.S. Citizen?
As long as you apply for the right kind of citizenship—whether as a skilled worker, student, or unskilled worker—you can keep your U.S. passport while living up north.
Is It Cheaper to Live in Canada or the U.S.?
Overall, it is cheaper to live in a metropolitan city in Canada than in the United States. Of course, this depends on the city you are looking at and your income tax bracket.
The Bottom Line
The United States is a larger global superpower and as such, Americans can expect to pay more in nearly every aspect of living. People in the U.S. and Canada generally have similar annual incomes. However, taxes are reportedly lower in the U.S., which can offer Americans a slight take-home pay advantage.
In the area of social benefits, Canadians have a somewhat stronger government-mandated family program with greater government funding for maternity leave through employment insurance programs. Canadians can also expect to pay less for healthcare costs. Furthermore, educational university costs are also lower (on average) in Canada, which could be a final factor that tempts many citizens across the border when considering long-term family planning.
World Bank. "GDP (current US$) - Canada, United States." Accessed May 4, 2021.
U.S. Census Bureau. "Income and Poverty in the United States: 2019." Accessed May 4, 2021.
Statistics Canada. "Canadian Income Survey, 2019." Accessed May 4, 2021.
Government of Canada. "Canadian income tax rates for individuals - current and previous years." Accessed May 4, 2021.
Tax Foundation. "2021 Tax Brackets." Accessed May 4, 2021.
Numbeo. "Cost of Living Comparison Between New York, NY and Toronto." Accessed May 4, 2021.
Government of Canada. "Employment Insurance Maternity and Parental Benefits." Accessed May 4, 2021.
Department of Labor. "Family and Medical Leave Act (FMLA)." Accessed May 4, 2021.
Centers for Disease Control and Prevention. "Health Expenditures." Accessed May 4, 2021.
Canadian Institute for Health Information. "Health Spending." Accessed May 4, 2021.
Organisation for Economic Cooperation and Development. "Annual average tuition fees charged by public tertiary educational institutions to national and foreign students at bachelor's or equivalent level (2015/16)." Accessed May 4, 2021.
U.S. News & World Report. "See the Average College Tuition in 2020-2021." Accessed May 4, 2021.
National Center for Education Statistics. "Tuition costs of colleges and universities." Accessed May 4, 2021.
Statistics Canada. "Tuition fees for degree programs increase in 2020/2021." Accessed May 4, 2021.