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Budgeting Across Borders: The Cost Of Living In The United States Vs. Canada

Despite sharing a border, there are numerous differences between the United States and Canada - namely the cost of living. Both nations consistently rank within the top five countries in the world to live in, but when it comes to getting more bang for your buck, which region reigns supreme?

Author:Frazer Pugh
Reviewer:Emmanuella Shea
Oct 25, 2023
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Despite sharing a border, there are numerous differences between the United States and Canada - namely the cost of living. Both nations consistently rank within the top five countries in the world to live in, but when it comes to getting more bang for your buck, which region reigns supreme?
This article from https://www.debtreliefcanada.com/will analyze the cost of living in the United States and Canada, focusing on the reasons behind some of the largest price gaps. So whether you’re considering a cross-border move or are just plain curious, continue reading to find out how both countries’ living costs compare.

Housing

For most people, housing costs make up a significant - if not the largest - chunk of their monthly budget. According to Numbeo, the world’s largest cost of living database, the average cost of renting a one-bedroom apartment in a city center location is USD 1,835.84 (CAD 2,503.48) in the United States and USD 1,254.42 (CAD 1,710.61) in Canada. The average price per square meter to buy a home in a city center location, however, is USD 4,810.79 (CAD 6,560.33) in the United States and USD 6,752.80 (CAD 9,208.59) in Canada. So while it may cost you less to rent in Canada than it does in the United States, lower interest rates and a higher demand for housing make Canada an expensive place to buy a home.

Transport

Another key cost of living consideration is the price of public transport. The latest figures from Numbeo list the cost of a one-way ticket on a local transport route at USD 2.50 (CAD 3.41) in the United States and USD 2.38 (CAD 3.25) in Canada. Similarly, the cost of a monthly pass is USD 70 (CAD 95.46) in the United States and USD 73.73 (CAD 100) in Canada. Both countries are home to excellent rail, road, sea, and air links, and with similar costs across the board, you can be confident that public transport will be an efficient and cost-effective option in whichever North American nation you call home.

Food

When it comes to comparing living costs between countries, food can be a key determining factor. So how does the cost of basic food items compare between the United States and Canada? Numbeo claims that the cost of a one-liter carton of milk is USD 1.04 (CAD 1.42) in the United States and USD 2.07 (CAD 2.82) in Canada - an almost 50% difference. The price of a 500g loaf of white bread, however, is around USD 3.57 (CAD 4.86) in the United States and USD 2.45 (CAD 3.34) in Canada. The cost of dining out is also more expensive in the United States with the price of a meal at an inexpensive restaurant coming in at USD 20 (CAD 27.27) in the United States compared to just USD 16.41 (CAD 22.37) in Canada.

Utilities

Another key cost of living factor is the price of running a home. According to Numbeo, basic utilities (electricity, heating, cooling, water, and garbage) for an 85m2 apartment costs an average of USD 192.21 (CAD 262.11) in the United States and USD 150.76 (CAD 205.59) in Canada. The cost of a monthly mobile phone and internet plan is also steeper in the United States with the online database citing an 11.9% and 11.8% respective increase. So while the cost of purchasing a home is usually cheaper in the United States, these savings will likely be offset by higher utility costs.

Childcare

Childcare costs are a crucial consideration for most parents - even those earning more than the average annual salary - and are one of the biggest price disparities between the United States and Canada. For example, the monthly cost of sending your child to a private, full-day preschool is USD 1,218.93 (CAD 1,662.22) in the United States and USD 797.76 (CAD 1,087.88) in Canada - that’s a staggering 52.8% difference. Similarly, the cost of sending your child to an international primary school for a year would cost you an average of USD 17,669.28 (CAD 24,095.06) in the United States compared to just USD 14,026.85 (CAD 19,128) in Canada.

Salary

One of the biggest differences between the cost of living in the United States and Canada is the average monthly net salary (after tax). The average employee can expect to take home USD 4,684.15 (CAD 6,387.64) in the United States and USD 2,903.40 (CAD 3,959.29) in Canada. This makes the United States a much more attractive place for young professionals looking to earn a comfortable living. However, with the United States home to higher living costs across most spending categories, this is likely to counterbalance any financial advantage.

Healthcare

Healthcare is publicly funded in Canada, making it much more affordable than in the United States, where it is largely privatized. According to Statista, the average Canadian paid USD 6,235.62 (CAD 8,563) for healthcare in 2022. The American Medical Association (AMA), on the other hand, reports that the average American spends around USD 9,503.02 (CAD 13,051) a year. The United States is also home to the highest healthcare expenditure in the world - a figure that surpassed USD 4 trillion in 2021. The ability to afford basic healthcare is a growing concern on a global scale and with the gap widening in the past decade, it’s a major contributing factor in the difference in the cost of living between Canada and the United States.

Education

For most families, education is a fundamental cost of living consideration. According to Study International, tuition fees are, on average, 58% more expensive in the United States than they are in Canada. This is largely due to the fact that primary, secondary, and tertiary education is heavily subsidized by provincial governments, meaning universities can afford to keep tuition fees low. Similarly, while costs differ between states, provinces, and schools, the average application fee is around USD 131.45 (CAD 180) in the United States and USD 21.91 (CAD 30) to USD 146.05 (CAD 200) in Canada.

Conclusion

Despite their close proximity, the cost of living is higher in the United States than in Canada across most spending categories, including utilities, childcare, healthcare, and education. The United States may offer greater earning potential and a wider range of economic opportunities, but these advantages come with a trade-off of higher living expenses and fewer employment benefits. Familiarizing yourself with the differences in the cost of living between the United States and Canada is key to making an informed decision about where to live, work, and build a future. Both countries have their own unique advantages and disadvantages and the right destination for you will depend on your personal circumstances and priorities.
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Frazer Pugh

Frazer Pugh

Author
Frazer Pugh is a distinguished expert in finance and business, boasting over 6 years of experience. Holding an MBA in Finance from Stanford University, Frazer's credentials underscore his authority and expertise in the field. With a successful track record in executive roles and as a published author of influential articles on financial strategy, his insights are both deep and practical. Beyond his professional life, Frazer is an avid traveler and culinary enthusiast, drawing inspiration from diverse cultures and cuisines. His commitment in delivering trustworthy analysis and actionable advice reflects his dedication to shaping the world of finance and business, making a significant impact through his work.
Emmanuella Shea

Emmanuella Shea

Reviewer
Emmanuella Shea is a distinguished finance and economics expert with over a decade of experience. She holds a Master's degree in Finance and Economics from Harvard University, specializing in financial analysis, investment management, and economic forecasting. Her authoritative insights and trustworthy advice have made her a highly sought-after advisor in the business world. Outside of her professional life, she enjoys exploring diverse cuisines, reading non-fiction literature, and embarking on invigorating hikes. Her passion for insightful analysis and reliable guidance is matched by her dedication to continuous learning and personal growth.
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