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Pivoting North: A Guide for U.S. Residents Looking to Move to Canada

Author: Vimal Sivakumar

By CIC News

On Aug 30, 2023


To attract more global tech talent to Canada, Immigration, Refugees and Citizenship Canada (IRCC) recently opened a new three-year Open Work Permit stream for H-1B holders living in the United States (U.S.).


After opening the stream for applications on July 16, the federal government announced that it was closing the program after reaching the intended cap of 10,000 applicants just two days later.


Covering the six topics in the bulleted list below, this article offers an introduction to key facets of Canadian life and the differences between the two countries in these pivotal areas.


Work: Employment, Rights and Salaries

Healthcare

Cost of Living: Housing and Transportation

Childcare/Education for Children

Safety

Taxes

If you are a U.S. resident who has already applied for a Canadian visa, if you have decided to move to Canada but have yet to apply for a visa or even if you are simply beginning your exploration of a move to this country, this article may be helpful with ensuring a smooth and well-informed transition for you and your family/loved ones.


Work: Employment, Rights, and Salaries

Notice of Employment: In the U.S., so-called "at-will" employment laws, allow employers (and employees) to terminate the working relationship “at any time [and] for any reason.” On the other hand, Canadian employers must give employees two weeks' notice or equivalent severance pay upon termination, depending on their length of service.


Minimum Wage and Salary Structures: While minimum wages vary by state across the U.S. and by province/territory in Canada, they are generally higher north of the border. Still, in 2021, the median net compensation in the U.S. – after taxes and deductions – was higher ($38,586.03) than the median after-tax income in Canada** ($36,100) during the same year.


*Data taken from the U.S. Social Security Administration


**Data taken from Statistics Canada, referencing “persons not in an economic family”, defined as “a person living either alone or with others to whom he or she is unrelated, such as roommates or a lodger”


Vacation Time: Canadian employment law guarantees full-time employees a minimum of two weeks of vacation per year. There is no similar benefit mandated by federal U.S. law.


Workplace Rights and Protections: Canada offers broader protections against workplace discrimination. Also, unions are more potent in Canada, with more legal rights to organize and strike.


Healthcare

Access: In Canada, healthcare is available universally through provincial health insurance programs, the U.S. primarily depends on employer-provided health coverage. As a new immigrant to Canada, most provinces impose a three-month-or-less waiting period before newcomers can access public health insurance, making it vital that people secure private health insurance until they are eligible for provincial coverage.


U.S. Government Programs: Medicare and Medicaid are key federal health insurance programs in the U.S. catering to senior citizens, those with specific health conditions, and low-income individuals.


Healthcare in Canada: Canada's public health insurance, offered by the government and administered by individual provinces, covers necessary medical services. For additional benefits like outpatient prescription drugs and dental care, Canadians often hold private insurance plans.


Cost and Wait Times: Canada extends health insurance to all citizens and PRs, but people may have longer wait times due to specialist limitations. Conversely, the U.S. might offer shorter waits, but out-of-pocket expenses can be higher.


Cost of Living: Housing and Transportation

Housing: Rental housing in the U.S. is generally cheaper overall than rentals in Canada.


This is according to data from a rentals.ca National Rent Report for January 2023. which calculated the national average rent for a one-bedroom apartment at $1,665 CAD. Conversely, the U.S. national average rent for an apartment of the same size, also in January 2023, was $1,149 USD*. For a two-bedroom apartment, the national average rent was $2,024 in Jan. 2023 (Canada) and $1,317 USD in the U.S., respectively, during the same timeframe. Generally, the price of housing in Canada is more than double that of the U.S., with a steady increase of 20% between 2021 and 2022.


*Data courtesy of Statista


Transportation: While fuel tends to be less costly in the U.S., Canada offers more affordable public transportation options such as buses and taxis. For those planning to drive after their move to Canada, U.S. state-issued driving licenses can be swapped for a Canadian provincial license in most cases as long as you possess adequate driving experience In addition, American drivers will usually be permitted to operate a vehicle in Canada with their U.S. license for between 90 and 180 days before they must complete a Driver’s License Exchange. The specifics and timelines related to this process often vary between provinces.


Childcare/Education for Children

Ranks for Child-Raising: According to the 2022 Best Countries rankings from U.S. News, Canada ranked fifth in the world for “child raising”, while the U.S. ranked 23rd. U.S. News indicates that this ranking is based on the perceptions of a country based on eight attributes: caring about human rights, being considered family-friendly, its environment for gender equality, being seen as happy, having income equality, being safe, and having well-developed public education and public health systems.


Parental Leave Rights: Canada offers more generous parental leave policies than the U.S., providing options for paid maternity leave of up to 15 weeks and even longer periods of parental leave for eligible members of Canada’s Employment Insurance (EI) program. Canada also has unpaid maternity and parental leave options ranging from 17 to 71 weeks (combined for both parents) depending on the childcare situation. In the U.S., qualified employees are provided up to 12 weeks of unpaid maternity leave.


Education: The educational experience varies by state and province in the U.S. and Canada respectively, but the 2022 Best Countries ranking from U.S. News ranks the U.S. in the number one spot and Canada in the fourth spot for education. Visit this page to learn more about the Canadian education system.


Safety

Global Peace Index: In 2023, Canada ranked 11th out of 163 independent states and territories according to the Global Peace Index (GPI) by the Institute for Economics and Peace (IEP). This represents a rise of two spots from the previous year and places Canada significantly ahead of the U.S., which currently ranks 131st. Accounting for factors such as external conflicts fought, perceptions of criminality, homicide rate and violent demonstrations (among 19 other indicators), the 2023 GPI data suggests that Canada is viewed as a significantly safer country than the U.S.


Taxes

U.S. Tax Obligations: As a U.S. citizen or Green Card holder, even after you become a tax resident in Canada, you must continue to file annual tax returns with the IRS, besides your Canadian tax return. This obligation is due to treaties between both countries preventing double taxation and fiscal evasion.


Tax Rates: Generally, Canadians face higher taxes than Americans, with revenue largely going towards social services such as universal healthcare and education. U.S. federal income tax for 2023 ranges between 10% to 37%, whereas Canadian federal income tax is between 15% to 33%.


Provincial vs State Taxation: Every Canadian province and territory levies an income tax, which is coordinated with the federal tax system. In contrast, U.S. state taxation varies, with some states like Florida and Alaska charging no state income tax at all.


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