Moving to Canada? 5 Things You Should Know First

Whether you’re considering a move because of the recent election or for other reasons, Canada is a fabulous place to call home. Need proof? Look no further than ice hockey (invented in Canada), Celine Dion (born in Canada), Martin Short (because: Three Amigos!) and finally, that poutine – all courtesy of the Canucks.

How to move to Canada

Given the country’s highlights, it’s understandable why thousands of Americans pack their bags and move to this maple syrup mecca every year. But don’t reach for your passport and luggage quite yet. I recommend looking into these finer details before planning your relocation to Canada.

Canada Immigration Program

Before moving to Canada, you’ll need to determine your eligibility and assess which immigration program is right for you (i.e. work, visit, study, citizenship). Looking to live in Canada long-term? You must be a permanent resident of Canada for several years before you are eligible to apply for Canadian citizenship and begin the process of naturalization. According to the Government of Canada website, permanent residents of Canada have the right to most social benefits (like health care coverage); can live, work, or study anywhere in Canada; and have protection under Canadian law.

There are several ways you can become a permanent resident, but the Canadian government’s website recommends applying through the Express Entry immigration selection system, which can typically be processed within six months time. In addition, there are also Provincial Nominee Programs and Sponsorship Programs. To read more about the permanent resident process, go to www.cicnews.com.

Cost of living

According to CNBC.com, $1 in the United States will currently buy you $1.34 in Canada. Per Numbeo.com, the world’s largest database of user contributed data about cities and countries worldwide, the overall cost of living in Canada is 8.71 percent lower than of that of the overall cost of living in the United States. The website notes that, on average, the rent in Canada is 27.94 percent lower than in the United States. Consumer prices, restaurants prices and grocery prices are all lower in Canada as well, according to Numbeo.

But remember – it’s all relative. Numbeo also points out that the average monthly disposable income (after tax) in the United States is $2,884.09 compared to Canada’s $2,138.67. At the time that this article was written, the unemployment rate in the United States was only 4.9 percent, while the unemployment rate in Canada was 6.8 percent. So while Canada may have a lower cost of living overall, it’s important to keep other factors like average income and unemployment rates in mind.

Canadian Health Care

Citizens and permanent residents of Canada are provided with free health care. However, new and temporary residents will most likely need to purchase a private health insurance plan until they are able to receive a public health insurance card. Note: each province and territory of Canada has their own health insurance plan. For more information on Canada’s health insurance, visit the Government of Canada website.

Taxes

When it comes to taxes – you can run, you can hide, but you can’t escape them (sorry). According to the IRS, U.S. citizens living as permanent residents of Canada will still have to file their taxes with the United States government. The good news though: Canada and the U.S. have a Tax Treaty that prevents double taxation. This way you won’t have to pay duplicate taxes to both Canada and the United States.

Permanent residents of Canada, however, must also pay required federal, provincial and municipal taxes. Canada’s income tax brackets differ slightly from the United States’ brackets. Per the Canada Revenue Agency, here are the 2016 federal income tax brackets:

• 15% on the first $45,282 of taxable income, +
• 5% on the next $45,281 of taxable income (on the portion of taxable income over $45,282 up to $90,563), +
• 26% on the next $49,825 of taxable income (on the portion of taxable income over $90,563 up to $140,388), +
• 29% on the next $59,612 of taxable income (on the portion of taxable income over $140,388 up to $200,000), +
• 33% of taxable income over $200,000

The federal income tax brackets in Canada tend to be lower than those in the U.S. This is complicated by our many deductions and expenses, so your mileage may vary.

Relocation resources for those moving to Canada

Finally, I highly recommend exploring these Canadian relocation services and resources before packing your bags. The links below should provide you with a good starting point for making the move across our northern border. To learn more about Canadian immigration, jobs, business, benefits, health, and taxes, check out The Government of Canada‘s website information. For more specific information on Canadian immigration, visit Canada Visa. To learn about the tax treaty and Canadian finance, read the United States-Canada Income Tax Treaty and explore the Department of Finance Canada website. For specific information on tax requirements for U.S. citizens living abroad, check this IRS web page. Need a moving company? Complete a short form and get free moving quotes from international movers. For those moving with children, read about the Canadian education system. Finally, to learn about the Canadian real estate market, visit Realtor.com’s guide to Canada.