Immigrating to Canada from USA

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Subject: Immigrating to Canada from USA
  Hey all,

I was planning on settling in Canada and I needed some advice. I am currently a US resident and working as a Software Engineer with a salary of around US$ 60k / year. I want to maintain the same standard of living in Canada and was wondering what is a reasonable salary to expect in Canada to maintain my lifestyle. I have been offered 60k CAD in Toronto and was wondering if that is reasonable.

Keep in mind that I have absolutely NO idea about the cost of living in Canada and would appreciate any input / suggestions.


Bilal Khan
(in reply to: Immigrating to Canada from USA)
wait a minute, you have US green card and making 60k/yr, and you are planning to move to canada? what´s the reason Khan?
(in reply to: Immigrating to Canada from USA)
My employer is one of the top 3 IT consulting groups in the world and I requested to be relocated to the Toronto office.

Personally, I think America is becoming an unwelcome place for muslims such as myself.

Prejudice aside, is that a reasonable offer?

Bilal Khan
(in reply to: Immigrating to Canada from USA) might find this helpful

(in reply to: Immigrating to Canada from USA)
I think you need to negotiate . In Canada , u have to pay 15% sales tax , and income tax is really high here . every thing is so expensive here . I don´t know where you r now , but we were in california , one of the most expensive place of U.S.A , but we also think this place is expensive .
My husband tried for transfer and we came here as a landed immigrant.And we r here for last 9 months . But believe me ,still we r not sure if we made the right choice . But as u have your green card you can come , atleast u will have another option.

(in reply to: Immigrating to Canada from USA)
Enough with the "Canada has a 15% sales tax". In Ontario, yes, it adds up to 15%, but the federal sales tax is 7%. In places like Alberta, there is no Provincial sales tax so its just 7% total. In Quebec, I think the sales tax adds up to 16%.

It really depends on where you are in the US. We already know you picked Toronto as your end point, but what do we compare that to?

About Canadian Federal Income tax. Its not as bad as people would think.

2005 Canadian Federal Income tax rates

16% on the first $35,595 of taxable income;
22% from $35,595 to $71,190 of taxable income;
26% from $71,190 to $115, 739 of taxable income
29% of taxable income over $115,739.

You DO NOT have to pay ANY federal income tax on the first $8,148 that you make. This number is supposed to rise to about $10,000 over the next 5 years.

2005 US federal tax rate (this is for single filers... in the US it is different when you file as a household)

10% on first $7,150
15% $7,151 - $29,050
25% $29,051 - $70,350
28% $70,351 - $146,750
33% $146,751- $319,100
35% $319,101 35%

No personal exemption... you pay tax on every dollar.

As you can see, the American FEDERAL income tax is actually higher than in Canada, for most situations. There is more opportunity to claim expenses in the US however, such as the interest on the mortage of your house.

The real difference, is that Canada has higher provincial income tax. All provinces have an income tax, unlike in the US, where there are about 8 states with no state income tax (ie Florida), and most states having income taxes less than half of their provincial cousins in the US.

Ontario Provincial Income tax is:

6.05% on the first $34,010 of taxable income
9.15% from $34,010 to $68,020 of taxable income
11.16% on the amount over $68,020 of taxable income

(this is comparable, although slightly higher, than in California)

Ontario´s exemption (the amount of money you make at the beginning of the year that is NOT taxed) is almost exactly the same as the federal... about $8,200.

So, in Ontario, if you make $60,000 your combined federal and provincial taxes will be $13,703.

Now remember, in the US, there are lots of little taxes, like the education tax, which pile up on your deduction list, which are not included in the federal and state income taxes.

In Canada you have to pay Unemployment Insurance and Canada Pension plan, but you have to do this in the US too (Unemployment and Social Security)

Now as far as sales tax, yes, this does suck in Ontario, and the rest of Canada too. Although, you do not have to pay PST (the 8% provincial) on things like books, and essential food items. I think essential food items are also exempt from GST... not much else is though.

In Canada, you will pay MUCH higher taxes on gas, cigarettes, and alcohal. No more 24 packs of Bud for $15.

Also, Toronto is the either the most expensive, or second most (next to Vancouver) city in Canada. High property tax, high real estate cost, high rent, LOTS OF TRAFFIC. However, Toronto is cheaper than LA, San Fran, NYC, and other expensive US cities.

In Ontario, you are likely to pay double for your car insurance.

Anyway, there are a million things to compare, not the least of which is your QUALITY of life as apposed to standard of living. Many native born Canadians would never dream of living in the US (however, many do... I did for 2 years) even if it meant more money. Look at things like ghettos which exist in EVERY large American city, or the fact the murder rate in the US is about 10 times that of Canada.

However, when it comes down to the dirty little dollar, the US is generally the better place to be.


(in reply to: Immigrating to Canada from USA)
It all comes down to what you can buy with what you take home after tax. Its called Purchasing power parity.

Lets consider that for the same skill in US and Canada if you are paid the same salary in the local currency. (I seriously doubt that, but lets assume for argument sakes)

If you can afford more in the US even after 40% tax than what you can afford in Canada after 20% tax, then its economically prudent to choose the US and vice versa. So now, you can throw all the tax arguments outside the window.

Well, this was just about the earning and saving potentials. Like Dave mentioned, there are other intangibles. For example, if you live in an area of the US where you are scared about the security of your family, then it might be better to move to a different place (within or outside US)

There is a trend for people moving out to suburbs or smaller towns, but mostly they are people who were already well settled in life to begin with. It will be tougher (not impossible) for new immigrants to move directly to a rural area, most will want to move where they feel they can get some kinda work, so go figure !

(in reply to: Immigrating to Canada from USA)
Most people who live in smaller towns, or rural areas, drive to the cities to work. They generally do not work where they live. Have you noticed the traffic on Toronto highways over the past 10 years?

People have been doing this in Toronto for many years... moving out to smaller towns beyond the city limits. The problem was, Toronto moved just as fast, and recently swallowed up all these small towns into one city, the Greater Toronto Area. (I remember in the mid 1980s when Missasauga was around 200,000 people and Toronto was about 2,000,000). Now you have to move even farther to get away. But, cities as far away as Cambridge, or Barrie, are becoming expenisive due to the effect of Toronto. These cities are also becoming LARGE. The highways connecting these towns together are becoming very overcrowded.

When the 401 was built, it was intended to be a bypass AROUND Toronto... similar to the Interstate Loops in the USA. By the time the highway was finished, Toronto had grown past the boundary of the highway... now its just a big mess. Soon enough, the foreign owned 407 (another failed bypass) will be swallowed up by the city. An currently, its too expensive to drive on anyway. You can´t bypass in the other direction because of the lake.

Just think twice if you intend to work in Metro Toronto, and live in a location that appears to be a 45 minute drive on a map. That 45 minutes may turn into 2 hours, and the cost of living will likely rise as Toronto swallows up your home over the next 10 years.

Now there is a trend of people who are retiring outside of Toronto. They bought their Toronto area house in 1980 for $70,000 and then sell it for $500,000 in 2005, and buy a house in a rural area for $150,000. Its simply a part of their retirement plan. You can do a lot more with $350,000 cash then you can with an overpriced home in Toronto. I mean, no matter how much your house is worth, you can´t eat it, can you?



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