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9 Things to Know About the Cost of Living in Canada vs US

Neighbors, allies, and sometimes competitors, the US and Canada, have a lot in common. That's part of why the age-old debate over which country is better continues to thrive — and may never go away. When comparing these two countries, there's a lot to consider, from food to fashion to housing. 

If you're considering making a change and building a new life in Canada or the US, one of the first things to do is examine how much money the average Canadian and American earn and spend on necessities. This list covers the most important factors to consider when comparing the US and Canada's cost of living. 

Cost of Living in Canada vs US

The cost of living in Canada is between 15% and 20% lower than in the US, but that doesn't necessarily mean you'd save money by moving there. Before making any major decisions, consider each of these elements of the cost of living, remembering that the exchange rate between Canadian and US dollars will also influence your ability to save. 

9. Wages and Salaries 

  • Average monthly salary in Canada: $53,181
  • Average annual salary in the US: $59,428
  • National minimum wage in Canada: $16.65 per hour
  • National minimum wage in the US: $7.25 per hour

Broadly speaking, US workers earn more money than those in Canada. The average income is around $6,000 more because many American companies pay higher salaries, particularly in industries such as technology and finance. However, some of this difference is offset by the benefits that the Canadian government requires employers to provide. This includes mandated leave for illness and vacation, parental and maternity leave, and pension plan contributions.

The US government, in contrast, doesn't require organizations to provide a specific type or amount of leave for their employees. For example, many new mothers have to take unpaid leave because their employers don't offer paid time off for maternity. In addition, the national minimum wage in the US is less than half of what Canadian employers have to pay. Although some states choose to offer a higher minimum wage, many use the federal rate of $7.25. This can make it more difficult for hourly workers to cover their monthly basic living costs. 

8. Food 

  • Average monthly grocery bill in Canada: $300 per person
  • Average monthly grocery bill in the US: $350 per person
  • Spending at restaurants in Canada: $10 to $40 per person
  • Spending at restaurants in the US: $11 to $40 per person

Directly comparing consumer prices in Canadian and American grocery stores reveals a lot of overlap. The most expensive groceries in Canada, including meat, seafood, dairy, and coffee, are also among the priciest products in the US. Monthly food costs for the average buyer in both countries are around $300 or $350, underscoring the similarities in pricing. 

The same pattern holds when you go out to eat. Americans and their Canadian counterparts are both likely to spend around $10 per person on a casual meal, with more upscale dining experiences costing anywhere from $40 to more than $100 per plate. 

7. Entertainment

  • Average cost of a cinema ticket in Canada: $10.79
  • Average cost of a cinema ticket in the US: $11.75
  • Average cost of a concert ticket in Canada: $147
  • Average cost of a concert ticket in the US: $252

When you spend an evening out on the town, however, the cost of your meal isn't the only thing to consider. Taking in a movie will cost you slightly less in Canada, with the average ticket price ringing up at $10.79 versus $11.75 in the US. 

Concert tickets in the two countries have a more dramatic price disparity. The average cost in Canada is $147, while American concert-goers pay an average of $252. That difference will likely disappear if you're seeing a big-name artist, such as Taylor Swift, but smaller shows or performances by less popular bands are generally more affordable for Canadians.

Cities and towns in both countries also offer free or low-cost activities and destinations, such as music festivals, parks, and fairs. This allows residents of Canada and the US to have fun without putting too much of a burden on their bank accounts. 

6. Utilities

  • Average electricity bill in Canada: $115
  • Average electricity bill in the US: $149
  • Average water bill in Canada: $60.50
  • Average water bill in the US: $73

Another area where you'll find a lot of similarities in Canada compared to the US is utility bills. Although you won't pay quite as much to keep your lights on in Canada, the cost of electricity in both countries is high. The same is true for the average water bill, which is only around $10 lower for Canadians than for Americans.  

On the flip side, the cost of internet service in the US is slightly lower than its northern neighbors. Americans pay an average of $65 a month for an internet plan, whereas Canadians pay around $95. There's a similar price difference for cell phone plans, in part because there are such a limited number of providers in Canada. Your total bill, however, ultimately depends on the amount of data you use and whether you finance your phone or own it outright. 

5. Clothing

  • Average annual spending on clothing in Canada: $1,700
  • Average annual spending on clothing in the US: $1,800
  • Average cost of Nike shoes in Costa Rica: $88.93
  • Average cost of Nike shoes in the US: $66.75

Canadian and American clothing stores typically charge comparable prices. However, American fashion brands, such as J. Crew, will have significantly higher prices in Canada. That's because imported consumer goods are subject to taxes that drive up prices on popular items.  

Overall, Canadians devote less of their money to clothing each year, but not by much. The difference might seem somewhat confusing given that items such as Nike shoes are more expensive in Canada. However, like the US, Canadian stores offer clothing items at a wide range of price points, so buyers can stick to the shoes, pants, and formal wear that fit their budgets and fashion preferences. 

4. Taxes

  • Standard sales tax in Canada: 5% to 15%, depending on location
  • Standard sales tax in the US: Differs by state 
  • Income tax rate in Canada: 15% to 33%, depending on income
  • Income tax rate in the US: 10% to 37%, depending on income

Tax rates in Canada and the US are largely dependent on the state, province, or territory, and there are substantial differences between one place and the next. In Canada, sales tax in Alberta and British Columbia is only 5%, while New Brunswick and Newfoundland have a tax rate of 15%. 

Likewise, American states such as Oregon and Delaware don't charge any sales tax. Meanwhile, California charges a 7.25% tax rate. Some states also combine their sales tax with local taxes, which can increase the rate significantly. On the whole, however, sales tax in the US is lower than in Canada. 

When it comes to income taxes, you'll have to pay taxes on your earnings regardless of whether you're a permanent resident or non-resident in America or Canada. The lowest rate in Canada is slightly higher than in the US, which suggests that they pay more taxes overall. However, the richest Canadians pay up to 37% in taxes, whereas the maximum rate for Americans is 33%. 

3. Healthcare

  • Public health coverage in Canada: 100% of the population
  • Public health coverage in the US: None 
  • Average cost of private insurance in Canada: $63 per month
  • Average cost of private insurance in US: $450 per month

Healthcare is one of the most important social benefits that Canada offers its citizens. The government provides coverage through a series of 13 provincial and territorial insurance plans. They cover medical expenses for necessary services, including hospitalizations, eye exams, and regular doctor visits. This publicly funded system, known as Canadian Medicare, keeps out-of-pocket healthcare costs low for the average Canadian. 

There are some services that don't fall under Canada's public insurance, such as dental care and private hospital rooms. As a result, many Canadians choose to purchase supplementary coverage to meet those needs. The cost of private health insurance is typically low, with an average monthly premium of $63. 

Health insurance in the US is very different from Canada. Rather than providing a public system for everyone, the government only provides coverage for low-income individuals and seniors through Medicare and Medicaid. People who don't qualify for those plans have to purchase insurance through the government marketplace or private companies. The premiums for these policies are quite high, costing some Americans $500 or more a month. Many of them also don't include coverage for eye exams or dental care, so Americans have to purchase coverage for those services separately. 

In addition to the difference in health insurance, the price of many healthcare costs in Canada are lower than in the US. As a result, American medical tourists sometimes travel across the border to receive care at a lower price than they can receive in their own country. 

2. Transportation

  • Cost to run a family car in Canada: $1,077 per month
  • Cost to run a family car in the US: $894 per month
  • Monthly public transport pass in Toronto: $156
  • Monthly MetroCard in New York City: $132

Transportation costs are another important factor to consider, especially if you love to explore or expect to have a long commute to work. Toronto and New York City, the largest cities in their respective countries, offer monthly passes to make it cheaper and easier for residents to get around town. A pass in Toronto is slightly more expensive than in New York, with a difference of around $25. 

Outside the big cities, public transportation can be difficult to find. In more rural areas, Americans and Canadians rely heavily on cars to travel to work, go to the store, or visit family. Car ownership in Canada and the US is similar, with around 84% of Canadians owning at least one car compared to 91% of Americans. 

When it comes to owning and taking care of those vehicles, Canadians spend about $100 more each month. These higher costs may be, in part, because fuel costs are higher in Canada. Increased gas taxes keep gas prices up, though they differ between provinces. 

1. Housing

  • Average mortgage interest rate in Canada: 6.89%
  • Average mortgage interest rate in the US: 6.94%
  • Average rent for two-bedroom apartment in Toronto: $2,608
  • Average rent for two-bedroom apartment in New York City: $5,045

Housing costs are often the make-or-break factor when deciding where to live. Unfortunately, housing costs a lot in Canada and the United States, no matter whether you plan to rent or buy your home. 

If you're planning to purchase a house, you'll pay a similar interest rate in both countries. However, the average price of a home in Canada is $657,145, which far surpasses the $431,000 price tag for the average home in the US. 

The cost of rent is also daunting, particularly when you look at the largest cities in each country. In Toronto, Canadians pay over $2,600 for a two-bedroom apartment, and the average rent in Vancouver is a whopping $3,000. The rent in smaller cities and rural areas is significantly lower. For instance, the average rent in Quebec City is $1,546. 

The rent for an apartment in Toronto might be extreme, but it's far below the average cost of a similar apartment in New York City. Living there will take a $5,000 bite out of your budget. In another of the most expensive cities in the country, Los Angeles, you'll pay an average of $2,225 for a two-bedroom apartment. As in Canada, rural parts of the US are far less costly, averaging $1,317 a month.  

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Liz Flynn

Written by Liz Flynn

Liz Flynn has worked as a full-time writer since 2010 after leaving a career in education. She finds almost all topics she writes about interesting, but her favorite subjects are travel and food. Liz loves the process of researching information, learning new things, and putting into words what others who share her interests might like to read. Although she spends most of her time writing, she also enjoys spending time with her husband and four children, watching films, cooking, dining out, reading, motorsports, gaming, and walking along the beach next to her house with her dog.

Read more posts by Liz Flynn

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