US Vs. Canada – Powerful Economies

The two most prominent nations in North America have had peaceful relations for over two centuries. 

The countries trade with each other, their people take vacations in the other country and many more. 

The counties share the world’s longest international border, with excellent benefits. The comparison between US and Canada, the two most prominent nations in North America, is an old age debate. 

People of both the United States and Canada argue that their own country is the best in the economy, living, education, etc. 

Generally, most do not know the facts about either country or what the other country offers. So let’s find out which one is better. 

US Vs. Canada

The two neighbors enjoy each other; however, there are notably critical differences between US and Canada. 

Each nation has its distinct cultures, accents, and behaviors. Here are more details on the differences and similarities between US and Canada that you didn’t know. 

1. Economy 

The United States and Canada economies have similarities because both are developed countries. Plus, they are the most significant trading partners. 

Key things that affect and differentiate their economies are government policies, geography, population makeup, and citizens’ productivity. The United States and Canada rank in the best ten world economies. 

However, the US economy is the largest while Canada is at 10th. You need to know that the United States population is much bigger than Canada. 

According to reports, the Canadians personal income tax is lower than Americans. The United States debt to GDP ratio is higher than Canada. 

Canada ranks higher than the US, 7th and 48th respectively out of 80 nations in open business. In economic competitiveness, the US has a higher ranking than Canada, 2nd, and 14th respectively out of 135 countries. 

2. Education For International Students 

Most study abroad students dream of the United States and Canada. The two countries rank as the top study destination that students aspire to learn from. 

The United States boasts of having some of the best higher learning institutions globally, such as Harvard, etc. However, in recent times most students prefer Canada over the United States. 

It is because Canada offers speedy processing of study times, its low cost, and has easy immigration. 

Eligibility Criteria 

The eligibility criteria and the admission for international students are similar in US and Canada. However, there are specific reasons why it’s easier for international students to join Canadian Universities. 

An international applicant must do ACT or SAT exams to study for a bachelor’s in the United States, while both are not mandatory in Canada. 

For a master’s course in the United States, you must appear for the GRE. However, not all United States institutions of higher learning need a GRE score, but most ask for it. 

You can do a master’s course in Canada without the GRE scores. Plus, very few courses in Canadian universities ask for this qualification. 

Cost and Expenses

To cost of studying in the United States is relatively higher than in Canada. The primary expenses are living expenses and tuition fees. 

The living expenses in US and Canada are emergencies, social activities, and grocery shopping. Students can work up to 20 hours weekly in both nations when in session and full-time during holidays or vacations.

Employment Opportunities 

People choose to study abroad because of vast carrier opportunities. In the United States, the popular professions with impressive salaries are medicine, management executives, software engineers, advertising, finance, etc. 

In Canada, the coveted occupations are construction manager, teacher, nurse practitioner, etc. Canadian international students are more advantageous than US international students since they get the Post-Graduation Work Permit (PGWP). 

Therefore the overseas students can work in Canada for a maximum of three years after graduation. Plus, they can use it as they seek permanent residency and citizenship. 

Health Care

Certain Canadian provinces give excellent medical cover to temporary residents such as international students. If you are in a state that doesn’t provide medical cover, you can use private insurance or a school’s insurance plan. 

Private healthcare in Canada offers drastically low premium rates than in Canada the United States. Low premium rates mean low overall financial budgets for international students in Canada. While those nurses who have NCLEX passing score will get paid better in both countries.

3. Cost of Living 

Comparing the cost of living between two major nations that share borders and have substantial economic similarities can be pretty tricky. 

Luckily extensive research has been done; here are more details on living costs in the US and Canada. 

United States 

The country ranks among the expensive places to stay. However, the United States has a higher median income than Canada, $85,500. 

Remember that the statistics can be because the United States has many millionaires and billionaires globally. 

You need to know that the living cost in America is not cheap. Take a look at several average costs of the essential expenses. 

  • Household foods costs – $9,958 annually
  • Apartment rental – $1,655 monthly 
  • Liter of gas – approximately $1.01
  • Private health insurance -$7,392 annually
  • Basic utilities – $205 monthly


The United States and Canada also rank among the most expensive places to reside. Its median economy is also one of the largest at approximately $37,800. 

It ranks among the 20 best nations regarding the economy. Note that high median economies always affect the cost of living by raising it. Here are some of the average costs of essential expenses. 

  • Household food costs – $10,311 annually 
  • Apartment rental – $1,334 monthly
  • Liter of gas – approximately $1.34
  • Private health insurance – $4,000 annually
  • Basic utilities – $164 monthly

According to all the data, the United States has a higher living cost than Canada. 

4. Innovation 

The United States and Canada are among the wealthy countries with considerable investments in innovation. It includes sophisticated economies, extra skilled workers, fair regulatory environments, and top-notch higher learning and research institutions. 

Still, there are differences worth noting between the United States and Canada. The overall United States has a higher quality of innovation. 

The factors that make US innovations top-notch are high-income group, exceptional university performance, etc. 

The factors rank gives the US a better score than Canada. It’s because they allow better technology outputs and unique knowledge.

The other thing that makes the United States rank higher in innovation is its market sophistication. Things like solid institutions make Canada have a higher ranking. 

However, Canada’s market sophistication is also okay because it has strong institutions and a great business environment. The last weakness of Canada’s innovative score is the research category and human capital. 

5. Education 

United States Of America

The American education system is extra competitive and includes school sports and standardized tests. 

The American schools usually focused on team sports such as volleyball, basketball, and football. 

However, it’s not the case in Canada. Sports have different benefits such as maintaining healthy student lives, plus it pays. 

Sports participation improves motivation, goal setting, and self-esteem in most schools, leading to better school results, mental health, and healthier relationships. 

American education system features more schools than the Canadian system. The types of schools in the United States are private schools that students pay for and are usually harder to get into. 

The schools that strive to produce better results can take students from different towns or states. Public schools are free under the federal government; they take students who live around the school. 

The last popular school type in the United States is the charter schools, which are public but have private owners. 

Rules in charter schools might be slightly different from those of public schools. However, they upload standards in the charter, plus they are free to attend. 


Canadian education supports critical thinking and doesn’t have a grading system. 

The grading system is across all aspects, which means the students do not succeed through high grades alone. More weight is on essays and projects and not the standardized end-year tests. 

Canada pays its teachers better than the United States on average, and it ranks among nations with good teachers’ salaries. 

Plus, their schools are safer; in the US, the school shooting cases are more than 288, while in Canada, they are less than five.

 It’s because Americans have easier access to guns than Canadians. Regulations of the Canadian education system are done provincially and not nationally. 

Therefore this limits the student qualification more depending on their geographic location. Plus, it creates educational differences between provinces. 

After secondary school, it’s impossible to transfer courses between trans-nation schools, unlike in the US, where the education system has standardized testing, such as SAT, across the nation.

Overall, the United States and Canada approach education differently. United States system is standardized, and students have the freedom to select their preferred schools. 

On the other hand, Canada offers safer and less competitive education, and it is the specific province that manages its education system. 

The difference between the United States and Canada education systems is so noticeable. However, Canada has a higher education quality, school safety, and better teachers’ salaries. 

6. Military

The military is an integral part of a nation, and nations heavily invest in them. To join the US military, one must be 18 years of age. 

However, a 17-year old can also join but with parental consent. In Canada, 17-year old males or females can voluntarily join the military. 

American army ranks as the most influential world’s army. Its score is 0.0718. Canada is in the 23rd position with a score of 0.3601. 

7. Taxes 

The Canadians strongly believe that their income tax is higher than Americans’. It’s common to hear Canadian politicians asking the government to lower taxes. So how true is this? Let’s find out.

Personal Income Tax 

Different statics gathering agencies in the United States and Canada publish their people’s averages or personal income taxes. The numbers are usually different because of different factors. 

Extreme wealth inequality is another factor that affects taxes in the two countries. In Canada, the low-incomers pay less tax for different services. 

You need to know that wealthy Americans are better off when it comes to taxes than Canadians. Here are more breakdowns on the tax issue.

Federal Income Taxes

Citizens in both the United States and Canada are obligated to pay federal income taxes. United States individuals have a federal income tax from 10 – 37 %, while 15 – 33% in Canada. The tax bracket in the United States has vast variation depending on one’s salary.

An individual earning $9,700 tax at the end of the year is approximately 10%, while another earning $39,476 will pay up 22%. 

The lowest tax bracket stays at 15% in Canada and will change individuals earning $47,630 and above. Therefore, the low-income earners in Canada are in a better position than Americans. 

Provincial Income Taxes and State Taxes 

It’s pretty tricky to compare provincial income taxes and state taxes because of various factors. Firstly, state taxes do not have any relations with the federal government. 

Each state sets its tax laws regarding credits and deductions. Certain states do not have an income tax, such as Alaska and Florida. In Canada, all provinces have an income tax. 

The federal tax system coordinates all provinces’ income tax in Canada except Quebec. It means the income rules and deductions are standard in the provinces. In addition, the provinces have incentives and additional credits.

Social Security and Canada Pension Plan (CPP)

In the US, social security is for retirement purposes. 

Canada also has the same system, Canada Pension Plan (CPP). American employees’ wages into Medicare and social security are 7.65%. The Canadian employees pay 4.95% of their gross salary to the Canada Pension Plan.

Healthcare taxes

The health care taxes are also worth talking about. This sector largely depends on the citizens’ taxes to run effectively and efficiently. 

In Canada, income taxes partially funds the health plan. The plan gives all Canadians free and equal access to practitioners, medical facilities, and procedures. 

In the United States, citizens pay for their health care, and it can be through their credit cards or insurance plan. 

The monthly health plans vary according to different factors such as the state you reside in, age, or have employer coverage or not. 

8. Language 

The primary language in the United States is English. However, there is a vast population that uses Spanish. All in all, English remains the primary language in America. 

Canada has two major languages, which are French and English. There is always a varying French, English, and Quebec in Canada. 

9. Roads/ Highways

Both Canada and the United States have hugely invested in their road networks. America boasts of having an excellent interstate highway system. 

On the other hand, Canada is a massive territory with fewer people. Its major highway is the Trans-Canada Highway that runs from east to west. 

The highway is good but not to the levels of the US interstate system. The Trans-Canada highway is usually not significant during the winter. However, it’s always open, and the government tries hard to maintain it. 

Despite the additional miles, Canadians tend to drop south and pick up a United States interstate during winter. 

10. The United States and Canada Governments 

Both United States and Canada governments are democracies and federal states. However, there are considerable differences in how the United States and Canada govern themselves. 

The significant difference is that one is a republic and a constitutional monarchy. It sounds formal but has more into it. 

The US has a presidential – congressional while Canada has a parliamentary–cabinet government. It’s the president that heads both the state and government in America. 

The prime minister heads the government in Canada, while the queen heads the state, but the governor-general represents her. Note that the United States and Canada heads of state have varying roles. 

11. Culture and Climate

The United States and Canada are pretty significant and stretch from the Atlantic to the Pacific oceans. Therefore the culture and climate of these countries have variations according to state and province. 

The overall United States is warmer and densely populated thus has varying cultures than Canada. Its warmer climate is because of its proximity to the equator. 

12. Family Benefits 

Children come with responsibilities, and spending time with them leads to enormous financial needs. Both Canada and the United States have ways to support new parents. 

A new parent has a mandatory leave in Canada and several other benefits. The federal government ensures everything is perfect by offering support through provincial employment insurance. 

Amazingly the program is inclusive of both fathers and mothers. The benefits are pretty great, and one can be up to $595 weekly. The United States is not so progressive on the family benefits like its counterpart. 

The United States federal government supports through FMLA, the Family and Medical Leave Act. 

The FMLA benefits include 12 weeks of unpaid leave. You should note that each state has its laws and benefits. 


The United States is a superpower, and thus its citizens have to pay a lot in almost all living aspects. American and Canadian have almost similar annual incomes. 

However, the taxes, more so for the rich, are lower than in Canada, giving it an advantage. Canada has better plans in the social benefit area because of good federal government funding. 

The Canadians also pay less for education and health. However, the United States has a better economy than Canada, and it ranks as the world’s largest economy. It also has excellent military roads, and its level of innovation is top-notch. 

John Taylor
John Taylor
John Taylor is a seasoned writer with more than 10 years of experience as a professional. He has written professionally for many different organizations, such as The Atlantic and the Boston Globe. John can write on any topic you need him to cover, from business writing to creative nonfiction pieces. His portfolio speaks for his skills; he's not only an experienced writer but also an excellent editor and researcher!


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