Canada Vs. USA Cost Of Living: How Do They Really Compare? 'In Vancouver, They Must All Be Millionaires' To Survive

With so many Canadians heading south in search of more affordable living, this topic has sparked curiosity. The duo behind the popular YouTube channel Make That Change, Anna and Anastasia, immigrants living in the Greater Toronto Area, took on the challenge of breaking down the real differences between the two countries. They took four cities in Canada and found comparable ones in the United States. 

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Who Earns More?

First, let's talk about income. U.S. salaries tend to be higher, but there's a big catch – income inequality in the States is much bigger than in Canada. For example, in Mississippi, you could make as little as $47,000 a year, while in Massachusetts, you might bring home $130,000. In Canada, incomes are more stable and less extreme, no matter where you live.

In their video, Anna and Anastasia show that while incomes in cities like Seattle and Chicago are higher than in most Canadian cities, the gap shrinks after taxes. Canada's higher taxes fund public services, including health care, greatly affecting cost-of-living differences.

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Taxes and Take-Home Pay

Speaking of taxes, this is where the U.S. typically gives you more money in your pocket – but it's not always as simple as it sounds. Yes, Americans have lower taxes, but much of what Canadians get covered by the government, like health care, comes straight out of an American's paycheck.

In Canada, taxes are higher because they include mandatory contributions to social services, like pensions and employment insurance. So, while Canadians take home less on payday, they get benefits like free health care and unemployment protection.

The Biggest Expense: Housing Costs

Housing is always the biggest expense, no matter where you live, and this is where things get interesting. According to the data Anna and Anastasia gathered, in U.S. cities like Chicago or Seattle, rent for a one-bedroom apartment ranges from $1,995 to $2,195 per month, depending on the neighborhood.

But Vancouver takes the cake. The average rent for a one-bedroom apartment in Vancouver has skyrocketed to around $3,000 monthly, with some central areas even higher. Rent prices there are so extreme that it's hard to imagine how people afford them—hence the two jokes: “They must all be millionaires!”

However, other Canadian cities like Edmonton and Calgary are much more affordable. When you compare rent prices to incomes, the U.S. and Canada are surprisingly close, with only a small difference.

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Everyday Expenses

Anna and Anastasia examined everything from groceries to gas, utilities, and car ownership. Groceries and gas are generally cheaper in the U.S., which makes sense given its larger population, bigger agricultural output, and fewer environmental regulations. Utilities and car ownership, however, can cost more in the States.

However, regarding health care, the U.S. has become significantly more expensive. Healthcare costs in the U.S. can be two to three times higher than in Canada. While Americans might have private insurance through their employer, they still face copays and deductibles. In contrast, most doctor visits in Canada are free, thanks to the public health care system.

That's one reason Canada's higher taxes don't feel quite so painful – what Canadians pay in taxes covers services Americans often pay for out-of-pocket.

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A Key Difference

When it comes to raising a family, Canada pulls ahead. The Canadian government has introduced subsidies that lower day care costs nationwide, with the goal of $10-a-day care by 2026 in many provinces. Parents in Canada also get up to 52 weeks of parental leave, making managing the early years of parenthood much easier.

In the U.S., day care is significantly more expensive, and there's no nationwide parental leave policy, so parents often have to start paying for child care much sooner. While the U.S. does offer some tax credits for families, they pale in comparison to the benefits Canadian parents receive.

In both countries, there are trade-offs. The U.S. gives you more control over your money since you don't have as many deductions, but that comes with higher health care and day care costs. 

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