Canada received almost 500,000 immigrants in 2023 and remains one of the most attractive destinations for people who want to move to another country. But is it more expensive to live in Canada than in the US?
The answer is “No.” Canada is the more affordable choice, especially regarding healthcare and education.
To help you deal with currency and unit conversions, we will include prices in American dollars next to statistics expressed in Canadian dollars.
Housing Costs: A Major Differentiator
Real estate prices are generally higher in Canada, with the average home selling for CA $699,117 in May 2024 (US $506,010). For comparison, the average home in the US sold for US $417,000 in the same period.
Homes in Canada tend to be 19% more expensive (after currency conversion) because expensive licensing, lengthy approval processes, and urban containment policies reduce the supply, similar to what happens in California.
However, this is only part of the story.
Rent vs. Own: The Cost of Shelter
We will consider the two countries and a few major cities for home-buying vs. owning.
The average rent for an 899 sq. ft. apartment in the USA is US $1,713, with prices significantly higher in major cities.
If you want to live in an 810 sq. ft. apartment in New York, that would cost you US $5,205 per month. In Los Angeles, you’d pay US $2,921 per month for an 899 sq. ft. apartment. In Houston, the average rent for the average apartment (882 sq. ft.) is US $1,342.
Now, let’s compare that to the average rental costs in Canada. The average rent in the country is cheaper than in the US, costing the average Canadian CA $2,301 or US $1665.50 for a two-bedroom property.
In Toronto, you would pay CA $3,199 for a two-bedroom apartment (or US $2,315.48). Vancouver is the most expensive Canadian city for renting at CA $3,648 for a two-bedroom, or US $2640.48 — almost half the price in New York.
In Toronto, the qualifying income for homeownership is CA $242,872 (US $175,816.26). However, the city’s median annual income is CA $97,257 (US $70,404.83), meaning most people cannot afford a home.
The monthly mortgage payment for a condo as a percentage of income is 50.2%, and you would have to save 10% for 57 months to afford a down payment. In Vancouver, you’d have to save for 67 months.
Los Angeles, which has rental prices similar to those of the most expensive Canadian cities, has a minimum qualifying income of US $143,400, while the Housing Affordability Index for first-time buyers is only 30 out of 100.
In both countries, homes and non-condo dwellings are more expensive than condos. Regional differences are also prominent in both Canada and the US. British Columbia has Canada’s highest real estate prices, with an average home price of CA $1,001,736 (US $725,582.43).
Quebec is more affordable, with an average price of CA $502,994. In contrast, some of the most affordable regions include Newfoundland and Labrador, with CA $306,184, Manitoba with CA $371,224; New Brunswick, with CA $338,740; and Saskatchewan, with an average home price of CA $328,029.
Hawaii has the highest housing costs in the US, with the typical value of single-family homes in the 35th to 65th percentile range equaling US $967,000. Conversely, West Virginia has the lowest typical home values.
Hidden Costs of Homeownership
In the US, property taxes are a significant hidden cost. The effective average property tax rate nationwide is 1.1% of the home’s assessed value but varies widely by state. For example, New Jersey has one of the highest rates at about 2.2% or US $10,000 annually. On the other hand, Wyoming, one of the states with the lowest taxes overall, has an effective rate of 0.55%, or US $1,878.
Canadian property tax rates range from 0.28% to over 2.6%, whereas the average effective rate is around 1.12%, similar to the US. Winnipeg has the highest rate, at 2.64%, while Vancouver has the lowest rate, at 0.28%.
Therefore, comparing taxes between cities in the two countries is more helpful, given how much local taxes change the individual picture.
Home insurance also varies by state and policy. However, the US average is around US $1,678 per year for a policy with a $350,000 dwelling coverage. Across the border, the average home insurance increased by 7.66% in 2024, or $960 per year, and is more similar in prices across Canadian provinces.
Other costs include maintenance and repairs, which depend highly on location and the type of issues. In both countries, budgeting experts recommend setting aside 1% of the home’s value for annual repairs and tracking repair and maintenance needs.
Data from the Canadian Census show that in 2021, Canadians spent CA $3,570 (US $2582.20) on household furnishings and equipment and CA $5,587 (US $4041.11) on household operations (which include cooking, cleaning, and other activities).
Some stats show Americans spend an average of $6,000 on home repairs and maintenance a year, although the costs vary depending on the home’s age, condition, and the type of repairs needed. In conclusion, Canadians and Americans spend similar amounts of money on average to maintain their homes, and the repair itself and location affect the price more.
Everyday Expenses: The Cost of Daily Life
Without rent, the average family of four would need CA $5,200 (US $3760.93) per month in Canada or US $4,168.6 in the US for groceries, food, transportation, entertainment, and utilities.
So, while not everything is cheaper in Canada, the overall cost of living is lower. The cost-of-living index in Vancouver is 66.0. In Toronto, it’s 63.9. In Montreal, it’s significantly lower at 59.5 (compared to the cost of living in New York).
The cost of living index in Los Angeles is 78.5. In San Francisco, it’s 90.5. In Houston, it’s 62.3, one of the lowest on Numbeo’s list of 35 major cities in America.
Groceries and Food
Food costs comprised an average of 11.2% of American disposable income in 2023, 5% more than in 2022 when living costs were somewhat lower. According to the Consumer Expenditure Survey, the lowest-income Americans spend 31.5%, or US $5,090, on food per year, while those with the highest income spend an average of 8%, or US $15,713, on food per year.
According to Numbeo, this is what restaurant prices and consumer prices of staple items in the US and Canada look like:
| Item | US (in USD) | Canada |
| Domestic Beer (0.5-liter draught) | $6.00 | CA $8.00 (US $4.34) |
| Cappuccino in a restaurant | $5.14 | CA $5.16 (US $3.74) |
| Meal, inexpensive restaurant | $20 | CA $25.00 (US $18.10) |
| Milk (regular) (1 liter) | $1.05 | CA $2.95 (US $2.14) |
| Loaf of fresh white bread (500g) | $3.58 | CA $3.64 (US $2.64) |
| Rice (white) (1kg) | $4.55 | CA $5.09 (US $3.68) |
| Eggs (regular) (12) | $3.67 | CA $4.77 (US $3.45) |
| Apples (1kg) | $5.29 | CA $5.74 (US $4.16) |
| Chicken filets (1kg) | $12.07 | CA $16.90 (US $12.23) |
The tipping culture in the US and Canada is relatively similar. In Canada, the tip is not obligatory as in the US, especially as servers and bartenders are more likely to earn a living wage than in the US.
However, it is still usual to pay 15% to 20% of the bill before taxes, depending on the location, service, and type of restaurant. In the US, tipping is a substantial source of income for the waiting staff, and 20% of the bill is considered a normal tip.
Transportation
Public transportation costs in Canada and the US vary by city and location. However, here are the prices for two of the most expensive cities:
Car ownership increases the cost of living thanks to maintenance, parking, insurance, and gas prices. Gasoline prices are similar in both countries, although slightly lower in the US. However, they also depend on the metro area and the type of gasoline. Prices in the table are for regular unleaded. However, car insurance and maintenance are cheaper than in the US.
| Toronto | Los Angeles | |
| Gasoline | $1.64 per liter (US $1.19) | $4.65 per gallon (3.785 liters) |
| Car insurance | $1,655 per year (US $1,196) | $2,313 per year |
| Maintenance | $500 to $700 a year | $900 a year |
Intercity travel in the two countries is well-developed. You can buy an Amtrak rail pass for US $499. While VIA Rails has no discount, the fares between Montreal and Toronto (332 miles) vary between CA $50 and CA $150.
In 2024, airfares in the US are generally cheaper than in Canada, as the distance between the cities is considerable, and smaller carriers prefer to have regional lines. Also, there is less competition and different infrastructure.
Utilities
Regarding utilities, Canada has higher resource costs, such as natural gas. However, as utilities are largely publicly funded and owned, Canadians have lower utility costs than the United States.
| Canada | US | |
| Basic utilities (electricity, water, heating, cooling, water, garbage) for an 85m2 (915 sq.ft.) apartment | CA $207.78 (US $150.22) | US $207.91 |
| Mobile Phone Monthly Plan with Calls and 10GB+ Data | CA $64.60 (US $46.71) | US $54.50 |
| Internet (60 Mbps or More, Unlimited Data, Cable/ADSL) | CA $85.09 (US $61.52) | US $71.07 |
Healthcare and Education: Major Expenses
Canada and the United States have starkly different healthcare systems. Canada’s universal healthcare offers comprehensive coverage at lower per capita costs, ensuring better access to essential services. In contrast, the US system, a mix of public and private insurance, ranks lower in quality and equity despite higher spending.
Healthcare
The US spends about twice as much per capita on healthcare as Canada. In 2022, the average healthcare costs per person were $12,555, compared to Canada’s approximately $6,500.
Also, while Canada spends less, it provides its citizens with a single-payer universal basic healthcare for all Canadian citizens and permanent residents. This system covers necessary hospital and physician services, free at the point of use.
Meanwhile, the US has a multi-payer system dominated by private health insurance, with public programs like Medicare and Medicaid covering specific populations.
While some Canadians use additional private health insurance, they pay around $4,000 in premiums annually, while Americans pay around $7,392.
Due to industry regulations, Canadian prescription drugs tend to be up to three times cheaper than US prescription drugs. For example, Tradjenta, a diabetes medication, costs $73 in Ontario and $186 in the US.
However, dental and vision care are out-of-pocket expenses in Canada, so most Canadians rely on employer-provided insurance. In the US, most insurance policies do not cover these expensive treatments.
Education
Public primary and secondary education in Canada and the US are free for residents. However, international students in Canada pay tuition fees ranging from CA $9,500 to CA $17,000 per year. Private education in both countries can be costly and depends on the school.
Regarding university tuition fees, tuition for Canadian undergraduate students costs CA $7,076 per year. In the US, it ranges between $10,740 for in-state students and $27,560 for out-of-state students in public universities.
Statistics on student debt show that the average Canadian student debt for a BA is CA $30,600 at graduation, slightly less than $29,400 in the US. Both countries offer some relief. However, Canadian universities tend to offer more scholarships to international students.
Taxes and Social Benefits: Hidden Costs and Savings
An overview of the average cost of living cannot be complete without considering taxation and other hidden costs and savings. While everyone’s tax rate will be the same, regional and local taxes and tax deductions affect how much an individual will pay.
We will compare tax rates in these two countries below:
Income Taxes
Both countries have tax rates that increase with income, although they have vastly different ranges. The US rates range from 10% to 37%, while Canadians pay between 15% and 33%.
- In Canada, the first tax bracket covers income up to CA $55,867 as of 2024, with a tax rate of 15%.
- The lower tax brackets in the US pay between 10% and 22%. The lowest-income individuals earn up to $11,600 and pay 10% in income tax. They pay 12% on up to $47,150.
Now let’s look at middle-income earners:
- Middle-class Americans (those earning between US $47,150 and US $100,525) pay a rate of 22% federal tax plus additional state taxes.
- Middle-class Canadians pay 20.5% on the portion between CA $55,867 and CA $111,733, plus provincial taxes. In Ontario, the rate for this tax bracket is 9.15%.
Higher-income earners pay increasingly higher taxes:
- In 2024, the highest-income earners in the US will have an income over $609,351, and everyone who earns more than this pays 37%. In other words, higher-income earners technically have more tax liability in the United States.
- The uppermost limit of the federal tax brackets in Canada is significantly lower than in the US at CA $246,752.
Finally, one can’t fully compare the provincial and state tax rates, as some states do not have an income tax. Each state decides its taxes independently.
Sales Taxes (GST/HST vs. Sales Tax)
The Goods and Services Tax (GST) is a 5% federal value-added tax in Canada. In provinces such as British Columbia, Saskatchewan, Québec, and Manitoba, the tax is combined with provincial sales taxes (PST) into a Harmonized Sales Tax (HST), which varies from 13% to 15%.
In contrast, US sales taxes are only state-level and vary widely, with rates ranging from 0% in states like Delaware and Oregon to over 9% in states like Tennessee and Louisiana.
Generally, higher sales taxes increase the price of consumer goods and services. The degree to which this impacts your bottom line depends on your location in either country.
Hidden Costs and Savings
Public services are a major source of savings in Canada, given that education, healthcare, and prescription drugs in Canada cost much less in the US. Medical expenses, free in Canada, can burden even high-income earners in the US and force them into medical debt.
Another major hidden cost is childcare. In 2023, Canadians paid an average of CA $544 per month (or US $393.36) for a full-time arrangement, while the average weekly daycare cost in the US was US $321. That is more than three times as much as in Canada.
Finally, regarding their impact on poverty, retirement savings and pension plans differ notably between the two countries. In Canada, the poverty rate among people over 65 is 4.7%, half of the 10.3% rate among US seniors, partly due to much higher individual healthcare costs.
While the two countries have similar savings accounts and tax advantages, what sets Canada apart is government pensions. So, while Canadians pay more in taxes, these taxes also fund the Old Age Security (OAS) Program, the Canada Pension Plan (CPP), and the Guaranteed Income Supplement (GIS) for those with the lowest income.
In contrast, US retirement savings are primarily managed through employer-sponsored 401(k) plans and Individual Retirement Accounts (IRAs), which are not as flexible as Canadian retirement savings vehicles.
Quality of Life and Lifestyle Choices
While American residents have higher salaries on average than their Canadian counterparts, they spend more on healthcare, education, and other essential services that are publicly funded in Canada.
So, let’s look at how the cost of living affects people in Canada compared to the US.
Salaries and Wages
The average income is higher in the US than in Canada. The median total income in Canada was CA $43,090 (US $31,158.03) in 2022. However, most Americans bought a home for a median value of US $37,585 in the same period.
Let’s see how salaries compare by profession. If you’re a primary school teacher, you’ll earn CA $41.21 per hour (median), while in the US, you will earn US $34 per hour (mean, calculated for the standard of 2,080 hours).
If you’re a family physician, you’ll earn CA $233,726 (US $169,005) annually in Canada or US $240,790 in the US.
Finally, when considering purchasing power and cost of living adjustments, Canadians generally face a lower cost of living due to public funding. In contrast, Americans may have higher disposable incomes but face higher healthcare and education costs.
Lifestyle Preferences
The cost of living in urban areas is significantly higher in both countries compared to rural areas. Eighty percent of the US population is urban, and the percentage of Canadians is slightly higher (81.9%).
In Canada, life is not as fast-paced as in the US. Employees have two weeks of mandatory vacation after the first year of work in a company and three weeks after year five. In the US, workers are not guaranteed paid vacation time.
Living in Canada is more relaxed, especially due to lower healthcare costs. According to the World Bank, the country has a longer life expectancy than the US: 82.60 years in Canada versus 76.33 years in the US in 2021.
Personal spending habits greatly influence the quality of life. Canadians might save more due to lower healthcare and education costs, allowing for more spending on housing, entertainment, and leisure. Conversely, Americans may have higher incomes but face higher expenses in essential services, affecting their overall disposable income and savings rates.
Comparing the Cost of Living in Canada vs. the USA
Living in Canada costs less than living in the US, even though residents in the US have a higher median salary. While the two large countries have some of the best living standards in the world, they still have considerable differences.
Canada has a more affordable cost of living, especially in education, childcare, healthcare, prescription medication, and living in retirement.
On the other hand, the US has lower housing costs and real estate prices, airfare, gasoline, and transportation costs.
Therefore, choosing between living in Canada versus the USA depends on your preferences and stage of life.