Is It Cheaper to Live in Canada or US?

The question of whether it is cheaper to live in Canada or the United States is complex. Living costs fluctuate significantly based on geographic location, individual lifestyle choices, and personal circumstances. A definitive cost comparison requires considering various factors that influence overall affordability.

Housing and Utilities

Housing often represents the most substantial monthly expense, and its cost varies considerably across Canada and the United States. In Canada, housing costs, especially in major metropolitan areas like Toronto and Vancouver, have been notably high, with the national average home price around CAD $691,643 (approximately USD $494,400) in June 2025. This figure can be over double that of some US cities. For instance, a median single-family home in Toronto was about $1.02 million US in July 2025, compared to Chicago’s median of $410,000 US. Vancouver’s median single-family home price was nearly $1.37 million US compared to Portland, Oregon’s $591,000 US.

Average rental costs also show regional disparities. In June 2022, the average median rent for a one-bedroom apartment in a US metropolitan area was $1,876. Canadian cities like Vancouver and Toronto had monthly rents for a one-bedroom apartment ranging from $1,600-$1,950 and $1,480-$1,800, respectively. Some Canadian cities like Edmonton and Calgary offer more affordable rental options.

Property taxes in both countries are assessed at the local level, leading to significant variations. Rates in Canada range from 0.5% to 2.5% of assessed value, while in the US, they fall between 0.3% and 3.0%. Canadian property taxes are not federally income-deductible, unlike in the US where they can be deducted up to $10,000.

Utility costs also form a portion of living expenses. Basic utilities for a 915 sq ft apartment average around $348 in Canada, compared to $429.33 in the US. Electricity costs per kilowatt-hour can be higher in Canadian cities than in US cities. Some Canadian cities with abundant hydroelectric power, like Montreal, may offer lower electricity costs.

Everyday Living Costs

Daily expenses for consumer goods and services contribute to the overall cost of living. Grocery prices in Canada are higher than in the United States. For example, a pound of chicken breast in Canada costs approximately $4.47-$5.47 USD, while in the US, it is around $4. Dining out also presents varying costs; a dinner for two in Vancouver might range from $80-$98, whereas a similar meal in the United States could cost around $75.

Transportation expenses are a key area of comparison. Gasoline prices in Canada are higher, costing 20-25% more per gallon than in the United States. A gallon of gas in Canada costs around $5.36-$6.56 USD. Public transportation is primarily available in urban centers like Vancouver and Toronto, making vehicle ownership often necessary for those outside these areas. Annual car insurance premiums are comparable, around $2,000 in both countries.

Healthcare and Education

Healthcare systems in Canada and the US operate fundamentally differently, leading to distinct financial impacts on individuals. Canada maintains a publicly funded, universal healthcare system, meaning most medical services are covered through taxes, reducing out-of-pocket costs for residents. This includes hospital visits, physical check-ups, and emergency services. While Canadians might opt for additional private insurance, Americans typically face much higher out-of-pocket expenses and average health insurance premiums of approximately $7,392 per year. The US system is primarily private or employer-sponsored, with government programs for specific groups.

Post-secondary education costs also differ. University tuition fees for domestic students are lower in Canada compared to the United States. This difference is a direct result of government subsidies in Canada, which help keep tuition affordable.

Income and Tax Considerations

Income levels and tax structures play a role in determining net disposable income and overall affordability. Average salaries in the United States are higher than in Canada. For instance, the average salary for Americans is around $56,690, while in Canada, it is about $43,867 (both in USD). The overall cost of living is also higher in the US, which can offset some of this income difference.

Both Canada and the US employ progressive income tax systems, where higher earners pay a larger percentage of their income in taxes. Specific rates and deductions vary. Canada’s federal tax rate can reach 33%, and when combined with provincial taxes, total rates range from 40-53%. In contrast, the US federal tax rate can go up to 37%, and combined federal and state rates range from 37-50%, though some states have no income tax.

Other taxes also influence disposable income. Sales taxes differ, with Canada having a 5% federal Goods and Services Tax (GST) plus provincial sales taxes (PST) or a harmonized sales tax (HST), with total sales tax rates from 5-15%. US state sales taxes range from 0-10.75%, with no federal sales tax. Payroll taxes, such as the Canada Pension Plan (CPP) and Employment Insurance (EI) in Canada, and Social Security and Medicare in the US, are additional deductions from gross income.