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Old 01-22-2009, 04:01 PM
 
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Hi,

My fiancee and I are thinking of moving to Canada. I am American and she is Canadian, and we currently live in Raleigh, NC. Among the many issues to consider is money. I am trying to get a realistic estimate of how cost of living compares in the two countries. For example, if we have a household income of $100,000 USD in Raleigh, how many CD would we need to earn in Ontario (GTA but not downtown) to live similarly?

I ask this because while salaries in our field (mental health) typically seem slightly higher in Canada (not factoring in exchange rate but rather absolute USD versus absolute CD), it also seems like prices are considerably higher in Canada. For example, whenever we eat at restaurants or stay in hotels in Canada I am surprised how much it costs. And of course taxes are much higher in Canada. Our decision will certainly not only be financially based, but it is an important issue.

So this posting is a starting point to ask for people's perspectives on this. If there are specific online resources you can recommend, that would be great. Thanks so much for any help.
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Old 01-22-2009, 05:21 PM
 
4,285 posts, read 14,425,422 times
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Originally Posted by krupina View Post
Hi,

My fiancee and I are thinking of moving to Canada. I am American and she is Canadian, and we currently live in Raleigh, NC. Among the many issues to consider is money. I am trying to get a realistic estimate of how cost of living compares in the two countries. For example, if we have a household income of $100,000 USD in Raleigh, how many CD would we need to earn in Ontario (GTA but not downtown) to live similarly?

I ask this because while salaries in our field (mental health) typically seem slightly higher in Canada (not factoring in exchange rate but rather absolute USD versus absolute CD), it also seems like prices are considerably higher in Canada. For example, whenever we eat at restaurants or stay in hotels in Canada I am surprised how much it costs. And of course taxes are much higher in Canada. Our decision will certainly not only be financially based, but it is an important issue.

So this posting is a starting point to ask for people's perspectives on this. If there are specific online resources you can recommend, that would be great. Thanks so much for any help.

This is such a tough issue simply because, while it's easy to speak in generalities, each individual's circumstances and expectations are different.

A few things for sure:

Gas, booze and cigarettes are more costly in Canada.

Income tax rates may be higher. See Canada Revenue Agency Web site | Site Web de l'Agence du revenu du Canada to find specific tax information

While we're on taxes, keep in mind that American citizens are taxed based on citizenship rather than place of residence. Currently that means that any income an American citizen earns in Canada exceeding roughly $80K US will be taxed by the US gov't as well.

There may be mitigating factors in the financial picture when it comes to issues like health insurance costs and real estate prices. The latter, of course, is highly dependent on the market where you sell and the market where you buy.

I think the best method of making comparisons at the individual level is to actually spend some time in the location you're considering and evaluate it with your circumstances in mind.
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Old 01-22-2009, 05:41 PM
 
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Originally Posted by Cornerguy1 View Post
any income an American citizen earns in Canada exceeding roughly $80K US will be taxed by the US gov't as well.
There is no such thing as double taxation. Because Canadian tax rates are higher than in US, Americans who work and pay taxes in Canada will not pay to US a single cent. IRS tax credit for taxes paid in Canada will more than cover any possible US taxes due. All unused US tax credit will be carried forward and used in following years to offset tax those years.
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Old 01-22-2009, 07:21 PM
 
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Originally Posted by movingwiththewind View Post
There is no such thing as double taxation. Because Canadian tax rates are higher than in US, Americans who work and pay taxes in Canada will not pay to US a single cent. IRS tax credit for taxes paid in Canada will more than cover any possible US taxes due. All unused US tax credit will be carried forward and used in following years to offset tax those years.
All well and good if applicable to an individual's circumstance, but the fact remains that the US taxes based on citizenship rather than place of residence, and amounts of income over and above the exemption limit are considered taxable by the the IRS.

For idividuals who wish to compute their personal tax liability, they may wish to consult the following IRS publication Publication 54 (2008), Tax Guide for U.S. Citizens and Resident Aliens Abroad
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Old 01-23-2009, 05:47 AM
 
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Originally Posted by krupina View Post
prices are considerably higher in Canada. For example, whenever we eat at restaurants or stay in hotels in Canada I am surprised how much it costs. And of course taxes are much higher in Canada. Our decision will certainly not only be financially based, but it is an important issue.
Yes, life is definitely more expensive in Canada. Every time I go to Canada, I have a similar experience. And this is considering the fact that I live in the most expensive city in US. Still, I'm shocked how high goods and services are in Canada. Some time ago, I got Canadian PR. However, the more I visit the more I am unsure I want to move to Canada. I feel that if I move, I will greatly compromise the (financial) standard of living I have in US. And this is considering the potentially high costs of US healthcare system.

Another thing that bothers me is how Canadians treat newcomer's education and working experience outside of Canada. Very often, it is unrecognized to say the least. Thousands of immigrants are either underemployed or never again work in areas of their specialization. On the other hand, Canadians also often do not (completely) recognize education and working experience among their own provinces! The country is highly decentralized. That in itself is not a bad thing. It goes so far, however, that, in many cases, it is often more advantageous for a Canadian province to do business with US than with a neighboring province! Now, this thing may seem to be off-topic in this thread. However, the opportunity to regain employment in the area of one's expertise directly relate to comparison of living standards between US and Canada. US offers more (career) opportunity, in my opinion.

Other than financial aspect though, I like Canada. In my opinion, Canada offers a lot. I still consider Canada as a move. This consideration, though, may soon expire together with my Canadian PR card!
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Old 01-23-2009, 09:14 AM
 
13 posts, read 34,634 times
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Default helpful feedback so far

I am not glad to hear your opinion, movingwiththewind, but it does agree with my fears regarding cost of living. If a New Yorker agrees that goods and services seem extremely expensive in Canada relative to the USA, that says something. Whether I'm talking about eating or drinking at a restaurant, taking the GO train, the price of telecommunications, or playing golf, Canada always is considerably higher than what I pay here.

I estimate it as on average 20% higher in Canada for goods and services. This is comparing how much something costs in USD dollars in the USA versus how much something costs in CD in Canada. I do not factor in the exchange rate because I will be earning and spending my money in the same country, so that is mostly not relevant. It is relevant for things like repayment of student loans in USD, but that is a minor proportion of my expenses in the overall scheme of things.

I've really got to do some serious research to figure out how we would fare financially in Canada. We would prefer many things about Canada, but money is of course a biggie.

I continue to welcome any thoughts on this issue.
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Old 01-23-2009, 12:47 PM
 
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Originally Posted by movingwiththewind View Post
Yes, life is definitely more expensive in Canada. Every time I go to Canada, I have a similar experience. And this is considering the fact that I live in the most expensive city in US. Still, I'm shocked how high goods and services are in Canada. Some time ago, I got Canadian PR. However, the more I visit the more I am unsure I want to move to Canada. I feel that if I move, I will greatly compromise the (financial) standard of living I have in US. And this is considering the potentially high costs of US healthcare system.
With the lower CAD I don't find things as expensive as when I first moved here when the CAD > USD. Car insurance is now cheaper than when I lived in NY, food is the same.

Quote:
Originally Posted by movingwiththewind View Post
Another thing that bothers me is how Canadians treat newcomer's education and working experience outside of Canada. Very often, it is unrecognized to say the least.
Other than financial aspect though, I like Canada. In my opinion, Canada offers a lot. I still consider Canada as a move. This consideration, though, may soon expire together with my Canadian PR card!
What I am finding is US credentials are pretty much recognized, work experience in the US is not really foreign. I worked in NYC prior to coming here. Not sure if careers are better in the US at the moment given the current economic climate in the US. Canada is expected to go into recession this year but they are predicting it will not be a long recession. Keep in mind the national debt in Canada is roughly $30-40 per person while in the US it is more $30,000 -- at least these were the numbers given to me. And if Canada was so much worse than the US you would see all these Americans returning home and Canadians joining them..
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Old 01-23-2009, 12:50 PM
 
9,334 posts, read 19,463,489 times
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Originally Posted by krupina View Post
I am not glad to hear your opinion, movingwiththewind, but it does agree with my fears regarding cost of living. If a New Yorker agrees that goods and services seem extremely expensive in Canada relative to the USA, that says something. Whether I'm talking about eating or drinking at a restaurant, taking the GO train, the price of telecommunications, or playing golf, Canada always is considerably higher than what I pay here.
You really need to come here and check it out for yourself, this way you have seen the facts for yourself. Take a few weeks holiday. BTW, to get the best rates on car insurance be surue to comehere with all your DMV driving records and letters of being insured from your insurance companies. When I was able to provide this information my insurance went from 2000 to 1450 CAD which is actually less than what I paid in NY.
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Old 01-23-2009, 01:11 PM
 
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Originally Posted by krupina View Post
I do not factor in the exchange rate because I will be earning and spending my money in the same country, so that is mostly not relevant.
I fully agree with you on that. Many people start comparing exchange rates when they compare cost of living. It does not make any sense to me. Other than being in export business, how is it relevant? As you said, you earn and spend your money in the same country. In this case, who cares what exchange rate is?

Last edited by movingwiththewind; 01-23-2009 at 01:22 PM..
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Old 01-24-2009, 06:31 AM
 
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Originally Posted by Cornerguy1 View Post
the fact remains that the US taxes based on citizenship rather than place of residence, and amounts of income over and above the exemption limit are considered taxable by the the IRS.
And how does this fact practically impact financial situation of Americans living and working in Canada? As I mentioned before, they don't pay a penny to the IRS in addition to what they pay to the CRA. I'd rather worry about the fact that Americans working in Canada pay more taxes to the Canada Revenue on the same amount of money they would otherwise pay if they would earn the same amount in US. This negatively impacts their financial situation. Therefore, the real problem here is not the IRS but the Canadian Revenue.
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