Canada vs. U.S. Cost of Living: The Real Numbers After You Move

Housing is typically the largest expense, and the most volatile difference, after a cross-border move.

In Canada, major cities such as Toronto and Vancouver consistently rank among the most expensive housing markets in North America. High demand, limited supply, and regulatory constraints keep both rents and purchase prices elevated. Even smaller cities can feel expensive relative to local incomes.

In the U.S., housing costs vary dramatically by state and city. While markets like New York, San Francisco, and Boston rival Canadian prices, many U.S. cities offer substantially lower housing costs, particularly in suburban or secondary markets.

For newcomers, the key difference is predictability. Canadian housing markets tend to be more stable but expensive, while U.S. housing offers more variability, and more opportunity to optimize based on location.

Most newcomers notice grocery prices almost immediately.

Canada generally has:

• Higher food prices

• Less product variety

• Fewer discount retailers
  
  

These differences are driven by supply chains, tariffs, climate, and market concentration. While prices vary by province, grocery costs in Canada are typically higher than in most parts of the U.S.

In the U.S., competition, scale, and domestic production help keep food prices lower overall, particularly outside major urban centers.

Healthcare is often misunderstood in cost-of-living comparisons.

In Canada, public healthcare covers core medical services, meaning there are no direct bills for doctor visits or hospital stays. This reduces financial uncertainty, especially for families and long-term residents. However, private insurance is still commonly needed for dental care, vision, prescriptions, and mental health services.

In the U.S., healthcare costs are more visible and often higher. Premiums, deductibles, and out-of-pocket expenses can be significant, particularly without employer-sponsored coverage. However, access is often faster, and plan flexibility is greater.

Over time, many expats find Canada’s healthcare system reduces long-term financial stress, even if it doesn’t eliminate healthcare spending entirely.

One of the most important, and least intuitive, differences lies in how costs are paid.

Canada generally has:

• Higher income tax rates

• Higher sales taxes (often 13–15%)

• Fewer direct user fees
  
  

The U.S. often has:

• Lower income taxes (depending on state)

• Lower sales taxes

• Higher direct costs for healthcare, education, and services
  
  

As a result, Canada’s cost of living feels more tax-heavy but predictable, while the U.S. feels more flexible but variable.

The total cost can be similar, the difference is how and when you pay.

Transportation costs vary widely in both countries, but patterns differ.

In Canada:

• Public transit is more heavily used in major cities

• Auto insurance rates are often higher

• Fuel prices are generally higher
  
  

In the U.S.:

• Car ownership is more common and often necessary

• Insurance costs vary widely by state

• Fuel prices are typically lower
  
  

Urban expats in Canada may find they can reduce transportation costs by relying less on vehicles, while suburban or rural residents often face higher costs.

For families, education and childcare costs are often decisive.

Canada generally offers:

• More affordable post-secondary education

• Increasingly subsidized childcare programs

• Predictable long-term costs
  
  

The U.S. often has:

• Higher university tuition

• Expensive childcare in many regions

• Greater cost variation by state
  
  

Over time, these differences can materially affect household budgets, particularly for families planning long-term residency.

A common surprise for Americans moving to Canada is that salaries may be lower, particularly in certain industries. However, this does not always translate to lower quality of life.

Purchasing power depends on:

• Net income after tax

• Healthcare and education costs

• Housing choices

• Lifestyle expectations
  
  

Many expats find that while headline income is lower in Canada, reduced financial risk and greater stability offset part of the difference.

The first year after a move often masks the true cost of living. Temporary housing, employer benefits, and currency fluctuations can distort early impressions.

After the first year, expenses stabilize, and this is when the real comparison emerges. For many, Canada feels more expensive day-to-day but less financially stressful long-term. The U.S. often feels more flexible but requires more active financial management.

There is no single answer to whether Canada or the U.S. is “more expensive.” The real difference lies in how costs are structured, not just how much they are.

Canada offers predictability, public services, and stability, at the cost of higher taxes and everyday expenses. The U.S. offers flexibility, income potential, and consumer choice, paired with greater financial responsibility and risk.

Understanding these trade-offs before and after a move allows individuals and families to budget realistically and plan confidently for the long term.