Is Canada Cheaper Than America?

Are you thinking of moving to Canada from the US, or you’re trying to consider which of the two countries you should move to? There are a lot of things you’ll want to know about the two places. One of the most important would be how affordable the two countries are. So, is Canada cheaper than America?

There’s no clear answer to whether Canada is cheaper than the US. While certain goods and services such as healthcare, rent, utilities, and education cost less in Canada than in the US, others such as food and homeownership are cheaper in America. However, Canada is cheaper than America on average.

Regardless of the overall higher cost of living in the US, what determines which of the two countries is cheaper would be where you’re staying. For instance, a city like Toronto in Canada is more expensive than Sioux Falls in the United States. This article discusses whether Canada examines Canada is cheaper by looking at the basic needs that make up the cost of living.

1.  Healthcare

If you’re considering the cost of living, one of the things you’ll need to look at is a basic necessity like healthcare. The cost of healthcare is cheaper in Canada than in the US, largely due to Canada’s universal health insurance program. This program ensures free basic healthcare services for citizens and permanent residents of Canada. This way, about 70% of all healthcare needs are covered by insurance. The universal health insurance program is provincial and territorial. But it’s generally applicable to all Canadians. The cost of healthcare for a Canadian is CA$7,064 while an American spend $11,000 annually.

It’s not only cheaper healthcare in Canada, but other related medical expenses cost less. For example, medicine in Canada costs lesser than in the US. Prescription drugs, in particular, are so low that Americans even import them from Canada. Thus, Canada is cheaper than America in terms of healthcare.

2.  Housing and Accommodation

Another important thing to consider when picking where to live in the cost of accommodation. It goes a long way in determining whether a place is cheap or not. In this area, the United States is a cheaper place to live than Canada. The average price of homes in the US has been historically lower than Canada’s for many years. As far back as 2016, the average cost of homes in Canada was US$352,076 while that of the US was US$234,200. That represented about a 50% difference.

So far, there’s no difference in the value of a home in both countries. According to a report, the average price of homes in Canada is 40% higher than the US average. However, despite the high average price of houses in Canada compared to the US, America has the higher of the two when it comes to rents. Toronto and Vancouver are the most expensive cities for renting in Canada, but they’re still well below many American cities. Thus, while homeownership is cheaper in the US, renting a place is cheaper in Canada.

However, you should note that the cost of housing and accommodation will depend largely on where you’re staying. In major cities such as Toronto, Vancouver, Montréal, Victoria, etc., housing is very high. This is due to the population concentration and high demand for homes in this area. However, if you’re considering owning your place, there are other small towns and communities where you’ll find homes at lesser prices.

3.  Education

Another fundamental thing to consider in determining the affordability of a country is the cost of education. When it comes to K-12 education, there isn’t much difference between the two countries. Both offer free public education. The real disparity is in the cost of tertiary education between the two countries. Colleges and universities in Canada are substantially cheaper than their US counterparts. Education in Canada is so cheap that several American students enrolled in Canadian universities despite the higher cost for international students compared to domestic students.

The low cost of education and healthcare makes Canada a cheaper place to raise a family than the US. As a resident, you can be sure that 70% of your child’s healthcare is covered, and tertiary education is quite cheap too.

4.  Food

The cost of food in Canada costs more than what obtains in the US and continues to go higher. The high cost of food in the country is largely due to the cost of transportation. Canada is a large country with several remote areas. Transporting food to these areas costs a lot more which explains why the average price of groceries in some places is very high. In places such as the Northwest Territories and Nunavut, where roads link the territories to the rest of Canada, the cost of food is very high. Canada’s Food Price Report predicts that a family of 4 will spend CA$13,907 on groceries alone in 2021. This doesn’t include the cost of eating out and other related expenses. Compared to this, the average American family spent US$4,643 on groceries in 2019. So, there’s a wide disparity in this area.

5.  Utilities

There are times when utilities are part of the rent. But in cases where they aren’t, and you have to pay them, it helps to know how much they cost in both countries. In Canada, the cost of utilities will vary based on your province. For example, those living in Northwest Territories pay the most for electricity, while Quebec has the lowest price. Generally, the cost of water, garbage, and sewer can be around US$1,390 for a family. Basic utilities, which are gas, electricity, and internet, cost around US$50 – US$180, internet costs $35 – $70, and cellphone bills could cost between $18 – $150.

On the other hand, the cost of utilities for an average US family is $2,060 annually, including water, gas, electricity, internet, phone, and other basics.

In Conclusion

Even though America is cheaper than Canada in some areas, Canada is a cheaper place to live than the US when it comes to the overall cost of living. According to living costs, Canada is 13% cheaper to live in than the US. Canada ranks 21st on the list of most expensive countries to live in compared to the US on 10th.

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