I’ve heard a lot of conflicting information on what to expect of life in Canada in terms of salary and general cost of living. Rather than trust the anecdotes, I dove into the data. Here’s what I found.
Average salaries are about the same between Canada ($49,000 per year) and the US ($46,482 per year). Taxes are higher in Canada, but they’re used to fund awesome social benefits like the single-payer healthcare system. That means that while your taxes will be higher, you pay very little for healthcare and won’t see weekly paycheck deductions for health insurance. At the end of the day, you’ll take home about the same amount of pay in Canada as you did in the US.
The cost of living in Canada is less than the cost of living in America. This will vary depending on exact location and certain things will cost a lot more than you’re used to paying for in the US, but in general you’re pay less overall for most things. So even if you make a little less, you’ll spend a little less. If you’re moving from a large city with a ton of jobs like New York or San Francisco, you’ll probably find that you’ll pay less wherever you move to in Canada. On the other hand, if you were living in a small town or city and move to Toronto or Vancouver, you’ll definitely notice everything costs more because large cities tend to be more expensive.
Are you a member of the middle class? If so, living in Canada means you are now a part of the richest middle class in the world, a title formerly held by middle-class Americans until 2014. Canadians have seen wages increase faster by growing 22% since 2007. In the US, incomes have not been keeping up with inflation and economic growth so people pay more each year but often earn the same as they the year before. On top of all that, the Canadian government has been more actively involved in the redistribution of income, preventing the kind of larger than life discrepancies found in the US.
At 331-to-1, the ratio of CEO-to-worker pay is double in the US as compared to any other country, Canada included. So, if you’re a top executive you’ll probably make less in Canada than in the US. If this applies to you then you’re probably not trying to immigrate to Canada anyway.
The federal minimum wage in the US is $7.25 per hour. For professions that receive tips, such as wait staff and bartenders, the minimum wage is just $2.13. These amounts might go up as high as $10 in some states (California and Massachusetts) and some individual cities have plans to increase their minimum wage to $15/hour (San Francisco by 2018).
Canada doesn’t have a federal minimum wage. Instead each province/territory sets the minimum amounts which range from $10.50 to $13 per hour. Some provinces have separate minimum wage amounts for people that receive tips, which range from $9.20 to $10.70 per hour (plus tips!). Some professions are further defined by special minimum rates per hour, day, week, or month. For example, a car salesperson in Alberta would make a minimum of $446 per week.
If you’re coming from a city with a large job market like New York, you may earn less when you move to Canada, but not a lot less. Different types of jobs might have higher or lower average salaries in Canada versus the US. You can use tools like payscale.com to find out what sort of salaries you can expect to find in Canada for your own profession.