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. When considering establishing your principal residence, it is a good idea to take a deeper look at both countries. So, which is better: Canada or the United States?
Key Takeaways
- The United States and Canada are two countries in North America with many similarities and quite a few important differences.
- While the U.S. is much larger than its northern neighbor in terms of gross domestic product (GDP), the average income per capita is closer in both places.
- While people generally pay more in taxes in the U.S., Canada offers superior social benefits.
- The cost of attending a university and expenses for healthcare are typically less in Canada.
Economics
Canada’s 2022 gross domestic product (GDP) was $2.14 trillion, while the United States reported a GDP of $25.44 trillion. While the U.S. is a much larger superpower in terms of the economy, the incomes of citizens are closer. The U.S. Census Bureau reports the median income for U.S. families at $74,580. In Canada, the median income was $68,400 (almost $49,600 USD), according to the latest report.
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 15% to 33%. However, in the U.S., singles making over $44,725 annually pay 22% in taxes, whereas Canadian singles making less than $53,359 only have to pay 15% in taxes.
According to the websitenumbeo.com, the cost of living is higher for Americans than for Canadians. The Numbeo Cost of Living Index estimates that consumer prices in Toronto are about 26.6% lower than in New York City, and Toronto’s rent price is approximately half the price of renting an apartment in New York. The index below looks at rent, groceries, restaurant prices, and local purchasing, which are all higher collectively in the United States ($ in USD).
| U.S. vs. Canada: Cost of Living (all prices in US$) | ||
|---|---|---|
| United States (New York City) | Canada (Toronto) | |
| Rent (monthly) for a 1-bedroom apartment | $4,058.15 | $1,971.33 |
| Monthly utilities (electricity, heating, cooling, water, garbage) | $171.35 | $160.49 |
| Bread (1 lb.) | $4.14 | $2.59 |
| Chicken (1 lb.) | $7.56 | $6.19 |
| Cappuccino | $5.62 | $3.89 |
| Meal, Inexpensive Restaurant | $25.00 | $18.87 |
| One-way Ticket (Local Transport) | $2.90 | $2.53 |
| Taxi (1 mile) | $3.25 | $2.13 |
| Pair of Levi’s Jeans | $66.67 | $59.17 |
| Pair of Nike Running Shoes | $98.36 | $91.32 |
Family Benefits
Spending time with children represents enormous financial needs 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 $638 per week.
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.
Healthcare
The United States has the highest healthcare costs in the world. Per capita, individuals can expect to pay approximately $11,582 annually. This compares to an annual average of $8,740 for Canadians.
Education
University can be another large expense in a person’s life and putsmany students deep in debt. The United States tops the list for countries with the most expensive university costs, with Canada coming in sixth. The average annual tuition at a ranked, in-state public college in the U.S. is estimated at $11,260, while the average annual tuition at a private college was $41,540. The average annual tuition at an in-state public college in Canada is estimated at $6,500, while annual tuition at a private college can range from $10,000 to $30,000.
Montreal is the largest city in Quebec, Canada, where many residents are bilingual, speaking both French and English. In fact, according to Census Canada, 22% 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.
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.
Article Sources
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U.S. Census Bureau. “Income in the United States: 2022.”
Statistics Canada. “Canadian Income Survey, 2021.”
Tax Foundation. “2023 Tax Brackets.”
Government of Canada. “Income Tax Rates for Individuals.”
Numbeo. “Cost of Living Comparison BetweenNew York, NYandToronto.”
Government of Canada. “Employment Insurance Maternity and Parental Benefits.”
U.S. Department of Labor. “Family and Medical Leave Act (FMLA).”
Paycor. “Maternity Leave Laws by State.”
U.S. Centers for Disease Control and Prevention. “Health Expenditures.”
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Organisation for Economic Cooperation and Development, iLibrary. “Annual Average Tuition Fees Charged by Public Institutions to National Students, by Level of Education (Academic Year 2019/20).” Download Excel.
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The World Bank, World Bank Open Data. “Population Density (People per Sq. Km of Land Area)—United States, Canada.”
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