Author Topic: Case Study - Moving to Canada?  (Read 4677 times)

Josey_L

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Case Study - Moving to Canada?
« on: January 23, 2017, 05:11:33 PM »
My husband and I are considering a move to Kitchener-Waterloo in Ontario from an expensive west coast city in the US. We would be much closer to his family in upstate NY, so there are personal (not to mention political) considerations in addition to financial ones.  I'm wondering if anyone here has considered moving to Canada (or a similar country) as part of their FIRE plan?  Here are some specifics for your consideration:

Our current net worth is around $1.2M, with about $300,000 of that in home equity.  My husband and I are both 33 and have one child (and may have one more in the future).  Our current pre-tax salaries are around $300,000.  I would likely have to give up my career as an attorney if we moved, but my husband could transfer to another well-paying tech job.  We wouldn't be making nearly as much income in Canada (perhaps over 50% less given the weaker Canadian dollar and my joblessness), but I think we would be setting ourselves up for a more stable FIRE life in the long term.  From what I've read here, people generally have post-FIRE anxiety about healthcare expenses and university education for their children.  If we become citizens and live in Canada long term, I think we would feel more financially secure about those expenditures.

This seems like a solid strategy to me, but is there something we aren't considering?  Are there tax or policy considerations I am overlooking?  Does anyone know of any advantages or disadvantages to retiring early in Canada?
« Last Edit: January 24, 2017, 05:36:04 PM by NWJo »

mindy

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Re: Case Study - Moving to Canada?
« Reply #1 on: January 23, 2017, 05:40:05 PM »
Are you looking to give up your US citizenship? If not, then you'll still have to pay US taxes which could really hurt you financially as you're already going to be taking a pay cut and paying Canadian taxes. If you are looking to get rid of your US citizenship, be prepared. I've heard that they make you pay a hefty fee for the taxes the US could have made from you.

doneby35

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Re: Case Study - Moving to Canada?
« Reply #2 on: January 23, 2017, 06:12:40 PM »
Interested in this too... posting to follow.

dividendman

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Re: Case Study - Moving to Canada?
« Reply #3 on: January 23, 2017, 06:16:34 PM »
Let's also not forget that your 1.2M USD =~ 1.6M CAD so you can feel richer too :)

I went to school at the University of Waterloo.... it gets cold there... really cold. And the snow...

Drifterrider

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Re: Case Study - Moving to Canada?
« Reply #4 on: January 23, 2017, 06:18:01 PM »
Are you looking to give up your US citizenship? If not, then you'll still have to pay US taxes which could really hurt you financially as you're already going to be taking a pay cut and paying Canadian taxes. If you are looking to get rid of your US citizenship, be prepared. I've heard that they make you pay a hefty fee for the taxes the US could have made from you.

No.  They will still have to file but not necessarily pay taxes.  There is a dollar value that is exempt (I don't remember the amount) if earned outside the US.

The big question is:  Will Canada let you move in?

lbmustache

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Re: Case Study - Moving to Canada?
« Reply #5 on: January 23, 2017, 06:27:24 PM »
Are you looking to give up your US citizenship? If not, then you'll still have to pay US taxes which could really hurt you financially as you're already going to be taking a pay cut and paying Canadian taxes. If you are looking to get rid of your US citizenship, be prepared. I've heard that they make you pay a hefty fee for the taxes the US could have made from you.

No.  They will still have to file but not necessarily pay taxes.  There is a dollar value that is exempt (I don't remember the amount) if earned outside the US.

The big question is:  Will Canada let you move in?

This might be the biggest hurdle but it sounds like OP who has a husband who works in tech, so a job (offer is on the table?) is the path to becoming a citizen.

SimpleCycle

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Re: Case Study - Moving to Canada?
« Reply #6 on: January 23, 2017, 06:46:55 PM »
Are you looking to give up your US citizenship? If not, then you'll still have to pay US taxes which could really hurt you financially as you're already going to be taking a pay cut and paying Canadian taxes. If you are looking to get rid of your US citizenship, be prepared. I've heard that they make you pay a hefty fee for the taxes the US could have made from you.

No.  They will still have to file but not necessarily pay taxes.  There is a dollar value that is exempt (I don't remember the amount) if earned outside the US.

The big question is:  Will Canada let you move in?

It's $101,300 per person for tax year 2016.

Josey_L

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Re: Case Study - Moving to Canada?
« Reply #7 on: January 23, 2017, 08:16:22 PM »
Are you looking to give up your US citizenship? If not, then you'll still have to pay US taxes which could really hurt you financially as you're already going to be taking a pay cut and paying Canadian taxes. If you are looking to get rid of your US citizenship, be prepared. I've heard that they make you pay a hefty fee for the taxes the US could have made from you.

No.  They will still have to file but not necessarily pay taxes.  There is a dollar value that is exempt (I don't remember the amount) if earned outside the US.

The big question is:  Will Canada let you move in?

It's $101,300 per person for tax year 2016.

My husband's company has an office in Waterloo, and my understanding is that given our age, skill sets, degrees and language skills, we will score high under the Skilled Workers Program.  Nothing is certain, but we feel like we are strong candidates for permanent residency, which can lead to citizenship within 4-5 years. 

We don't intend to give up our citizenship.  I need to look into the tax issues more.  I was thinking that if you lived in a country with higher taxes, you could take a credit against any foreign taxes that you pay, thus reducing your US income taxes to zero.  And isn't this all very dependent on the treaties with each country?  Does anyone have a link to a good source on this info, or experience with these tax issues in Canada specifically?
« Last Edit: January 23, 2017, 08:27:00 PM by jennis12 »

bigalsmith101

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Re: Case Study - Moving to Canada?
« Reply #8 on: January 24, 2017, 12:45:16 AM »
Given your current income, and level of earning power, at this stage in your life, I wouldn't recommend leaving the US for Canada. Unless you are so politically motivated as to make it seem reasonable to you, the rest of the equation simply doesn't make sense to me.  At least not until you've finished your working years and are intent to retire soon thereafter.

I'm a dual citizen, and as such can work and live in the US/Canada as I see fit. I will consider trading countries when FIRE comes my way in about 10 years (around age 40), but I'm not headed north across the border just yet! Your earning potential will be much higher and tax liabilities much lower in the US than Canada.

seattlecyclone

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Re: Case Study - Moving to Canada?
« Reply #9 on: January 24, 2017, 12:54:17 AM »
With health insurance availability possibly becoming less of a predictable thing here in the US, I don't blame you for looking elsewhere for a FIRE locale. Seems like it's much easier to immigrate to Canada as a working person than as an early retiree, so if you do want to go that route it makes sense to do it before you retire. However I do agree with bigalsmith101 that since you'll be giving up so much in terms of earnings to make this move, you might want to wait until you're within just a few years of FIRE if you're not yet at that point.

former player

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Re: Case Study - Moving to Canada?
« Reply #10 on: January 24, 2017, 03:07:41 AM »
With health insurance availability possibly becoming less of a predictable thing here in the US, I don't blame you for looking elsewhere for a FIRE locale. Seems like it's much easier to immigrate to Canada as a working person than as an early retiree, so if you do want to go that route it makes sense to do it before you retire. However I do agree with bigalsmith101 that since you'll be giving up so much in terms of earnings to make this move, you might want to wait until you're within just a few years of FIRE if you're not yet at that point.
Except that the older you get the harder it is to immigrate - receiving countries want young, healthy workers, not older about to be retired ones.

alsoknownasDean

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Re: Case Study - Moving to Canada?
« Reply #11 on: January 24, 2017, 04:42:22 AM »
Yeah it sounds like you would be giving up a lot (one whole income, likely a lower other income, etc).

You'll be able to buy health insurance on a $300k income, just ;)

Stay put, Trump won't be in forever. If you want to move closer to family, surely there's somewhere in the US that'd be suitable. Plus at $1.2MM net worth, you're not that far from FIRE :)

Drifterrider

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Re: Case Study - Moving to Canada?
« Reply #12 on: January 24, 2017, 05:29:30 AM »
Are you looking to give up your US citizenship? If not, then you'll still have to pay US taxes which could really hurt you financially as you're already going to be taking a pay cut and paying Canadian taxes. If you are looking to get rid of your US citizenship, be prepared. I've heard that they make you pay a hefty fee for the taxes the US could have made from you.

No.  They will still have to file but not necessarily pay taxes.  There is a dollar value that is exempt (I don't remember the amount) if earned outside the US.

The big question is:  Will Canada let you move in?

It's $101,300 per person for tax year 2016.

You can tell it has been a few years since I looked it up.  Then it was $80,000 P/A.

Frugal Lizard

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Re: Case Study - Moving to Canada?
« Reply #13 on: January 24, 2017, 07:50:09 AM »
I live not far from the K-W area.  It does get cold - it is a real winter -except not this year.  At the moment there is no snow but it is supposed to change today with a few centimeters.
There are two universities in the City of Waterloo.  One of the best symphonies in Canada is based in Kitchener.  The food basket is incredible.  The region is surrounded by some of the best farmland in Ontario.  Within two hours you can be at Lake Huron or Lake Erie if beaches in the summer are your thing.  Downhill skiing is not easy but other sporting activities are.  The Grand River is beautiful and there are many protected natural areas around wetlands and small tributaries. The school system is good and our experience with the hospital in Cambridge was really good.
Having many newcomers to the community means it is easy to make connections and new friends. We have lived in other communities and found it really difficult to "break into" a social circle.
Housing stock is high cost compared with most of Canada.  If you remove Toronto (astonomical) prices, the area is one of the most expensive areas.  But there are great community services and a very low crime rate.  While not as ethnically diverse as Toronto, there  is a rich cultural life. 
You can live very comfortably on $100K per year in Canada.  And most importantly - if you are thinking about another child - we have a one year mat leave.  Most women in higher income brackets take the full year off - or share part of the leave with their partners.  My partner took one month of the parental leave.  It is pretty sweet.  Daycare costs are pretty darn high and we chose for me to stay home longer, with no pay until each of our children were 18 months, when the cost was a little less. 
I find that we have all the resources of a big city but not the traffic and noise. Many of my friends have found it fairly manageable to work full time once the kids were in school. A work-life balance seems easier to achieve if you don't have a monster mortgage and a crazy commute.  I meet so many people who left Toronto so that they could have a better family life.  I still work a couple of times a month in Toronto but live outside the big smoke so that we have a less stressful consumer lifestyle.
A couple of our friends are immigrants from the US.  Most of the Americans I know came here because they are academics and they found work here.  All them have become Canadian citizens.  One couple retired and moved back to the States but they chose Vermont.  I don't know anything of their finances but the Americans I know have decided to become Canadians. 

« Last Edit: January 24, 2017, 07:54:14 AM by Frugal Lizard »

Prairie Stash

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Re: Case Study - Moving to Canada?
« Reply #14 on: January 24, 2017, 08:32:31 AM »
My provincial university has tuition around $7000/year for engineering, its cheaper for liberal sciences like law ;) I'm curious why you wouldn't get a job, we have lawyers in Canada too. You might need to pass a bar but until then there's in house corporate work, or work in a law office with international law. Not knowing your specialty its hard to judge

With your net worth after purchasing a house you would have $48,000/year to spend. Your kid would get $5000/year in benefits until 18, if they live at home university should cost about $28-35k in current dollars.

Universal healthcare is pretty great, a family member is on drugs that cost $20,000/month (rough estimate, it use to be much higher) for life. My 2 children cost nothing, we had a 5 day stay in the hospital with the first for a minor reason (jaundice), standard practice is to be cautious since its free.

Where do you want your kids to grow up? You're also planning out their citizenship. However crossing the border isn't impossible, MMM is a Canadian in Colorado.

Drifterrider

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Re: Case Study - Moving to Canada?
« Reply #15 on: January 24, 2017, 11:25:05 AM »

Universal healthcare is pretty great, a family member is on drugs that cost $20,000/month (rough estimate, it use to be much higher) for life. My 2 children cost nothing, we had a 5 day stay in the hospital with the first for a minor reason (jaundice), standard practice is to be cautious since its free.


You must have wonderkinder.  You might want to rephrase.

How much do you pay in income taxes, medical coverage taxes, GST, property taxes, energy taxes?

There are no free lunches (or children).

nereo

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Re: Case Study - Moving to Canada?
« Reply #16 on: January 24, 2017, 11:44:19 AM »

It's $101,300 per person for tax year 2016.

My husband's company has an office in Waterloo, and my understanding is that given our age, skill sets, degrees and language skills, we will score high under the Skilled Workers Program.  Nothing is certain, but we feel like we are strong candidates for permanent residency, which can lead to citizenship within 4-5 years. 

We don't intend to give up our citizenship.  I need to look into the tax issues more.  I was thinking that if you lived in a country with higher taxes, you could take a credit against any foreign taxes that you pay, thus reducing your US income taxes to zero.  And isn't this all very dependent on the treaties with each country?  Does anyone have a link to a good source on this info, or experience with these tax issues in Canada specifically?

I can speak a little on this.  As indicated, taxes on income earned in Canada is not likely to be an issue for you due to the very high income exemption between CA/USA.  Be aware that it could always change with political winds, though I doubt it.
You WILL have to continue filling taxes annually, and you will continue to pay capitol gains taxes on all money held in US accounts.
Note: to qualify for the tax exeption you MUST meet either the "physical presence test (min. 330 days/year outside the US) or the "de-facto resident test" (a bit more complicated, but requires being outside the US much of the time).  If you plan on spending, say, 6mo in the US and 6mo in Canada you will not qualify for the $103k salary exemption.

Regarding immigration, the most sure-fire way of receiving work permits and then permanent resident status is for one of you to have a job offer in Canada, preferably one listed on the CIC website. With your assets Canada will likey allow you to live here anyway, but a path to citizenship is not guaranteed, and it's my understanding you are less likely to be granted permanent resident/citizen status if you have no work history in the country.

Health care is another factor.  You will NOT get provincial health care simply because you move to Canada.  Note there is no "Canadian Health Care System" - it's all disbursed by the individual provinces, and each one has thier own rules.  Plan on holding your own insurance for the first few years you live here until you qualify for a health care card.  Even then, many (even Canadians!) carry supplimental health care insurance to cover things like perscription drugs, dental/vision, preferential treatment for quality-of-life proceedures and private/semi-private hospital rooms.

I'd start by planning an extended vacation (2-3 weeks minimum) in the area you want to live, and talk exensively with US ex-pats who ahve moved there.  We moved to Quebec 4 years ago and it's been a mixture of frustration and joy.  Often the US and Canada seem interchangable, but then there are times when glaring differences raise their heads, and it's hard not to think "this would never happen in the US/Canada!"

seattlecyclone

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Re: Case Study - Moving to Canada?
« Reply #17 on: January 24, 2017, 11:56:19 AM »
With health insurance availability possibly becoming less of a predictable thing here in the US, I don't blame you for looking elsewhere for a FIRE locale. Seems like it's much easier to immigrate to Canada as a working person than as an early retiree, so if you do want to go that route it makes sense to do it before you retire. However I do agree with bigalsmith101 that since you'll be giving up so much in terms of earnings to make this move, you might want to wait until you're within just a few years of FIRE if you're not yet at that point.
Except that the older you get the harder it is to immigrate - receiving countries want young, healthy workers, not older about to be retired ones.

True enough. Canada's point system does have age as a factor. Ages 20-29 are most wanted, with a score of 100 points for that range. It goes down gradually from there to 0 points at age 45 or higher. The cutoff for application acceptance has usually been just under 500 points in the past year. Every point can matter, but it's just a difference of 5 points per year until age 40 so the cost of waiting isn't that huge as long as they don't completely change the point system.

Josey_L

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Re: Case Study - Moving to Canada?
« Reply #18 on: January 24, 2017, 02:39:02 PM »

Health care is another factor.  You will NOT get provincial health care simply because you move to Canada.  Note there is no "Canadian Health Care System" - it's all disbursed by the individual provinces, and each one has thier own rules.  Plan on holding your own insurance for the first few years you live here until you qualify for a health care card.  Even then, many (even Canadians!) carry supplimental health care insurance to cover things like perscription drugs, dental/vision, preferential treatment for quality-of-life proceedures and private/semi-private hospital rooms.

I'd start by planning an extended vacation (2-3 weeks minimum) in the area you want to live, and talk exensively with US ex-pats who ahve moved there.  We moved to Quebec 4 years ago and it's been a mixture of frustration and joy.  Often the US and Canada seem interchangable, but then there are times when glaring differences raise their heads, and it's hard not to think "this would never happen in the US/Canada!"

What would be typical for someone who moved to Canada for work?  Would the employer likely arrange for a private insurance policy, or arrange to get you a health care card?  We are considering the Waterloo area in Ontario and our current plan is to visit in late-June for a couple of weeks.  Reaching out to US ex-pats in the area is a good suggestion!

nereo

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Re: Case Study - Moving to Canada?
« Reply #19 on: January 24, 2017, 04:02:19 PM »

Health care is another factor.  You will NOT get provincial health care simply because you move to Canada.  Note there is no "Canadian Health Care System" - it's all disbursed by the individual provinces, and each one has thier own rules.  Plan on holding your own insurance for the first few years you live here until you qualify for a health care card.  Even then, many (even Canadians!) carry supplimental health care insurance to cover things like perscription drugs, dental/vision, preferential treatment for quality-of-life proceedures and private/semi-private hospital rooms.

I'd start by planning an extended vacation (2-3 weeks minimum) in the area you want to live, and talk exensively with US ex-pats who ahve moved there.  We moved to Quebec 4 years ago and it's been a mixture of frustration and joy.  Often the US and Canada seem interchangable, but then there are times when glaring differences raise their heads, and it's hard not to think "this would never happen in the US/Canada!"

What would be typical for someone who moved to Canada for work?  Would the employer likely arrange for a private insurance policy, or arrange to get you a health care card?  We are considering the Waterloo area in Ontario and our current plan is to visit in late-June for a couple of weeks.  Reaching out to US ex-pats in the area is a good suggestion!

As I said (and despite the popular notion) there is no Canadian Health Care.  Each province has their own system, and each has different rules about how/when non-citizens are eligible, as well as what level of care is provided to everyone.  I can speak for Quebec but only make generalizations about what Ontario is like.
From our experience, anyone who is seen as a 'temporary worker' or 'student' won't qualify for the single-payer health care.  Once you get permanent residence status you'll most likely have access to the health care system, though there are often additional hoops to jump through. Check out the requirements to become a permanent resident here.

Unlike in the US, very few employers will offer insurance programs because everyone has basic health care. However, there are multiple companies that insure foreign workers and their families, many of which are also the large banks (CIBC, Desjardins, etc).  You can find out what a health-care plan will cost for your family in Canada.  My impression is that it's slightly cheaper than similar plans in teh US because (again) the majority of the population is already covered.

RetiredAt63

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Re: Case Study - Moving to Canada?
« Reply #20 on: January 25, 2017, 10:11:48 AM »

Universal healthcare is pretty great, a family member is on drugs that cost $20,000/month (rough estimate, it use to be much higher) for life. My 2 children cost nothing, we had a 5 day stay in the hospital with the first for a minor reason (jaundice), standard practice is to be cautious since its free.


You must have wonderkinder.  You might want to rephrase.
There are no free lunches (or children).

Prairie Stash was talking health care costs.  Having a baby does not incur hospital/medical costs. The sentence My 2 children cost nothing followed in the same paragraph as Universal healthcare is pretty great.  Obviously there are other costs, that was not the topic.

meghan88

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Re: Case Study - Moving to Canada?
« Reply #21 on: January 25, 2017, 10:49:04 AM »
Hi NWJo,

We're not expats but we live in KW and know a few expats.  Please feel free to contact me directly if you have any questions about the area.  Do you practice tech law, or some other area of law?  The tech law scene around here is already very good, and still growing.

Josey_L

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Re: Case Study - Moving to Canada?
« Reply #22 on: January 25, 2017, 09:23:39 PM »
This has been such a helpful and interesting discussion and I am truly grateful to all who have participated and especially those generous enough to help us in our process.    We have plans to visit Kitchener, Waterloo, Toronto, and the surrounding area in early summer to make sure this is a good fit.  In the meantime, I thought it would be useful to summarize some of the things I've learned through this process, in case others are thinking of making a similar choice.

Positives:
  • KW is a thriving tech town with good jobs, close proximity to upstate NY, Michigan, and a large cosmopolitan city (Toronto).  KW has good recreational opportunities (though not much downhill skiing). The people are friendly and open, the region punches above its weight in turns of cultural and intellectual opportunities, there are good schools and a low hassle factor (low traffic, has everything you need nearby).  While not cheap, KW is much more affordable than Toronto and other big american tech cities.
  • The US dollar is worth ~1.3 Canadian dollars currently, meaning assets sold in the US go much further in Canada.  Selling our home in the US, which has appreciated significantly, could give us the cash needed to buy a home outright in KW.
  • Canada has affordable universities and universal healthcare (which varies by Province), though this does not include dental and certain other non-emergency coverage.  Many Canadians purchase supplemental health insurance (one person quoted a plan that costs about $500/month for a family) and some employers offer these benefits.  Healthcare is available to permanent residents and citizens alike, though there may be a delay in getting a health card.  The security of affordable healthcare and education means the ability to achieve FI/RE may be more sustainable and less nerve wracking.
  • Parental leave benefits are excellent (one full year of leave--though maybe at partial pay?) and childbirth and related complications are covered
  • For young professionals with advanced degrees and fluency in English and/or French, Canada may offer you permanent residency with an eventual path to citizenship.  This site has a good overview of the various paths and options for entry: http://www.canadavisa.com/moving-to-canada-from-the-u-s.html

Negatives:
  • KW is COLD. Real winters, real cold.
  • Tech jobs in the US pay substantially more, especially considering the stronger US dollar.  Moving to Canada would mean working and saving for longer to achieve FIRE, even if our cost of living is lower. We would also lose some saving and investing potential since I would need to get licensed to practice law in Ontario and get some additional education (I practice in an area of law that is an odd creature of the US tax code and doesn't really exist in Canada).  I may lose a couple of years of earning potential.  However, I am excited by the idea of learning Canadian tax law or other areas of law and even advanced law degrees are relatively affordable in Canada compared to the US.  I see this as an intellectual challenge and opportunity; not necessarily as a negative.
  • If you or a family member have a health issue, you may be prohibited from becoming a permanent resident.  Furthermore, if you become a citizen and later want to sponsor a family member, you may need to agree to cover their health expenses for up to 20 years.
  • Moving is expensive and international moves are especially complicated.  Many Americans think that Canada will be just like the US, but there are real cultural differences and you will be openly, "but politely", despised if you flaunt your American superiority complex.
  • You must be able to interpret the following in order to communicate with the locals: "So, last night while sipping on my double double I realized that I was down to my last toonie when picking up a mickey of vodka and a twofer for the weekend. That 'bout nearly caused a kerfuffle at the liquor store, let me tell you! It was my girlfriend's fault, eh? She's such a keener to party, but made me pick up the stuff for her stagette . . . or I'da never been out there freezing my feet off. The Chinook hadn't blown in yet so I was wearing my toque, but I should have put on something warmer than just runners. I ended up getting a soaker outside the store, good thing it's only two klicks from home, eh?"
  • Finally, you must deal with a whole world of tax and accounting hurt as an American citizen living abroad.  If you are not careful, you can experience double taxation and other punitive tax rules especially from the IRS.  Fortunately, the US and Canada have some treaties and tax rules that make this a little easier, but living in compliance with the US tax code while abroad can be a real challenge and may be expensive if you hire an accountant every year.  Some suggest hiring one in the first year and then copying their work in following years if not much has changed.  See my next list for more details.

Other Tax and Retirement Issues:
  • Pensions: You can get credit towards social security or the Canadian Pension Plan for time worked in both Canada and the US thanks to the US-Canada Totalization agreement: https://www.ssa.gov/international/Agreement_Pamphlets/canada.html
  • Tax-deferred retirement accounts:  As of 2014, the US now recognizes certain Canadian retirement vehicles including RRSPs and doesn't require annual reporting.  Previously, many Americans lost the ability to legally defer taxes on income in those popular retirement accounts.
  • Here is a good article on consequences of moving IRAs/401ks into an RRSP, which was made easier in 2012 by a Canadian statutory change: http://www.advisor.ca/tax/tax-news/good-news-for-clients-with-401k-77397
  • Some suggest keeping 401ks and IRAs in accounts in the US.  If you have a permanent address (through a parent, sibling, etc.), you can likely keep your US bank accounts and wire money to Canada as needed.  Various US laws make it difficult for anyone living outside of the US to hold US mutual funds and other investment accounts, but ETFs are usually ok and don't have the same restrictions.  In general, don't buy non-us investment funds.  I found some great articles on these topics here: https://thunfinancial.com/american-expat-financial-advice-research-articles/

What did I miss? :D
« Last Edit: January 25, 2017, 09:33:11 PM by NWJo »

brycedoula

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Re: Case Study - Moving to Canada?
« Reply #23 on: January 26, 2017, 08:41:44 AM »
Many things are generally more expensive here than in the US. Domestic flights, fuel (gas/diesel), food, clothing - to name a few.

We also haven't had the housing prices correction. Housing prices in the GTA are STOOPID $$$.

Re: maternity/paternity leave (basic version): it's a maximum of 52 weeks of benefits, some of which MUST be taken by the birthing parent & the remainder can be split between parents (or not, your preference). I just finished a one-year mat leave & received the maximum benefit amount of $1,012 bi-weekly. Depending on your employer you may also receive a "top-up" payment to essentially earn a full salary during leave. More info found here: https://www.canada.ca/en/services/benefits/ei/ei-maternity-parental.html

Gun laws are VERY different. If you need to be carrying at all times to feel "safe"...best stay in the US, then ;)

nereo

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Re: Case Study - Moving to Canada?
« Reply #24 on: January 26, 2017, 09:20:48 AM »
regarding this:
Quote
Finally, you must deal with a whole world of tax and accounting hurt as an American citizen living abroad.  If you are not careful, you can experience double taxation and other punitive tax rules especially from the IRS.  Fortunately, the US and Canada have some treaties and tax rules that make this a little easier, but living in compliance with the US tax code while abroad can be a real challenge and may be expensive if you hire an accountant every year.

I wouldn't say that keeping in compliance of tax laws is terribly difficult - you just have to file taxes once per year. For most this will be filing IRS form 2555 in addition to their normal US tax return (likely a 1040).
If you don't want to do it yourself, Canada has HR Block offices and agents that specialize in Canada + US taxes, and my memory is it costs ~$200 to file both through them.

The rest seems fairly accurate, but do be aware of brycedoula's comment that many everyday items tend to be more expensive here in Canada than the US, and the sales tax (HST) in Ontario is 13%, higher than anywhere in the US. This rapidly eats away at the current "advantage" of the currency exchange.  Also, broadly speaking there is less consumer choice here (as in fewer brands to choose from) - this seems to be due to the smaller population along with many companies in the US not finding the Canadian market compelling enough to jump through international hoops. We've come to embrace this quirk, and now these everyday items become 'treats' when we go back to the US.

SoftwareGoddess

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Re: Case Study - Moving to Canada?
« Reply #25 on: January 26, 2017, 11:51:21 AM »
I wouldn't say that keeping in compliance of tax laws is terribly difficult - you just have to file taxes once per year. For most this will be filing IRS form 2555 in addition to their normal US tax return (likely a 1040).

While these are not technically tax forms, you will also be required to file Form FINCEN 114 and Form 8938 to the Department of the Treasury each year. These forms list all accounts in which you have financial interest or control. They aren't hard to file, but the penalties for not filing can be significant.

Novik

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Re: Case Study - Moving to Canada?
« Reply #26 on: January 26, 2017, 12:01:13 PM »
regarding this:
Quote
Finally, you must deal with a whole world of tax and accounting hurt as an American citizen living abroad.  If you are not careful, you can experience double taxation and other punitive tax rules especially from the IRS.  Fortunately, the US and Canada have some treaties and tax rules that make this a little easier, but living in compliance with the US tax code while abroad can be a real challenge and may be expensive if you hire an accountant every year.

I wouldn't say that keeping in compliance of tax laws is terribly difficult - you just have to file taxes once per year. For most this will be filing IRS form 2555 in addition to their normal US tax return (likely a 1040).
If you don't want to do it yourself, Canada has HR Block offices and agents that specialize in Canada + US taxes, and my memory is it costs ~$200 to file both through them.

I think the tax hassle depends hugely on what kind of roots you have/put down in Canada. My mom has all her investments in the US... she used to do her own taxes no problem.

I consider myself more Canadian than American (and Vanguard etc won't give me an account anyways) so trying to invest in Canada (outside of RRSPs) is a nightmare, in large part because of onerous IRS tax compliance rules surrounding PFICs, TFSAs, RESPs etc.

RichMoose

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Re: Case Study - Moving to Canada?
« Reply #27 on: January 26, 2017, 01:04:45 PM »
Negatives:
  • You must be able to interpret the following in order to communicate with the locals: "So, last night while sipping on my double double I realized that I was down to my last toonie when picking up a mickey of vodka and a twofer for the weekend. That 'bout nearly caused a kerfuffle at the liquor store, let me tell you! It was my girlfriend's fault, eh? She's such a keener to party, but made me pick up the stuff for her stagette . . . or I'da never been out there freezing my feet off. The Chinook hadn't blown in yet so I was wearing my toque, but I should have put on something warmer than just runners. I ended up getting a soaker outside the store, good thing it's only two klicks from home, eh?"

What did I miss? :D

Sensitivity training. ;)  We Canadians as a whole tend to be quite politically correct and get our backs up about mildly offensive things pretty quick.

Josey_L

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Re: Case Study - Moving to Canada?
« Reply #28 on: January 26, 2017, 04:19:22 PM »

Quote
Sensitivity training. ;)  We Canadians as a whole tend to be quite politically correct and get our backs up about mildly offensive things pretty quick.

I must admit that I cannot tell if you are being sarcastic, but if not, I did not mean to offend! A Canadian posted that quote as a joke and I can barely even follow.
« Last Edit: January 26, 2017, 05:03:30 PM by NWJo »

tweezers

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Re: Case Study - Moving to Canada?
« Reply #29 on: January 26, 2017, 04:33:13 PM »


Sensitivity training. ;)  We Canadians as a whole tend to be quite politically correct and get our backs up about mildly offensive things pretty quick.


I must admit that I cannot tell if you are being sarcastic, but if not, I did not mean to offend! A Canadian posted that quote as a joke and I can barely even follow.

I'm Canadian and thought that was hilarious, although perhaps I'm just pleased I could fully interpret the passage despite being an ex-pat for nearly 20 years (cry!).  To add to that: you should understand the reference (and implied risk) of smelling burnt toast*

*in the absence of burning bread, you may be about to have a seizure. 
https://www.youtube.com/watch?v=mSN86kphL68

obstinate

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Re: Case Study - Moving to Canada?
« Reply #30 on: January 26, 2017, 04:37:20 PM »
Are you looking to give up your US citizenship? If not, then you'll still have to pay US taxes which could really hurt you financially as you're already going to be taking a pay cut and paying Canadian taxes. If you are looking to get rid of your US citizenship, be prepared. I've heard that they make you pay a hefty fee for the taxes the US could have made from you.
This is not true. You have to pay the positive difference of the US tax and the foreign tax. In other words, you pay:

max(0, US tax-foreign tax)

You still have to file US taxes. That's different.

Josey_L

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Re: Case Study - Moving to Canada?
« Reply #31 on: January 26, 2017, 05:16:00 PM »
Quote

I'm Canadian and thought that was hilarious, although perhaps I'm just pleased I could fully interpret the passage despite being an ex-pat for nearly 20 years (cry!).  To add to that: you should understand the reference (and implied risk) of smelling burnt toast*

*in the absence of burning bread, you may be about to have a seizure. 
https://www.youtube.com/watch?v=mSN86kphL68

This is great! Thanks for the tip. :D

RichMoose

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Re: Case Study - Moving to Canada?
« Reply #32 on: January 26, 2017, 10:43:55 PM »

Quote
Sensitivity training. ;)  We Canadians as a whole tend to be quite politically correct and get our backs up about mildly offensive things pretty quick.

I must admit that I cannot tell if you are being sarcastic, but if not, I did not mean to offend! A Canadian posted that quote as a joke and I can barely even follow.

Total sarcasm, I'm not easily offended unlike many others up here. :)

But the prompt and possibly unnecessary apology tells me you'll fit right in up here. ;) We say sorry a lot haha.

gerardc

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Re: Case Study - Moving to Canada?
« Reply #33 on: January 26, 2017, 11:23:43 PM »
I think you're underestimating the pay cut from Bay area or Seattle to Canada, it's more like 50% for a tech job considering the exchange rate, so more like 60-80% if you also go jobless (I'm Canadian living in the US).

The way I see it, it's not worth sacrificing $100k worth of salary per year to save $15k on health care, obviously :)

The best money-wise would be to save up here in a high salary HCOL, then move to Canada right before FIRE, or maybe 1-2 years before if you want to get employment-based permanent residency.

pyyj

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Re: Case Study - Moving to Canada?
« Reply #34 on: January 31, 2017, 05:20:38 PM »
Every case is different of course, but in the tech world the very best Canada/US situation is working remote. Collect a (slightly) smaller US dollar contract, and see it stretch to the moon in Canadian dollars. If your husband has a good relationship with his company and can swing a remote gig, you can have all that good USD cake and eat it too.

former player

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Re: Case Study - Moving to Canada?
« Reply #35 on: January 31, 2017, 05:32:19 PM »
Every case is different of course, but in the tech world the very best Canada/US situation is working remote. Collect a (slightly) smaller US dollar contract, and see it stretch to the moon in Canadian dollars. If your husband has a good relationship with his company and can swing a remote gig, you can have all that good USD cake and eat it too.
Wouldn't most people immigrating to Canada need the job to be in Canada in order to qualify for immigration?

letsdoit

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Re: Case Study - Moving to Canada?
« Reply #36 on: July 25, 2018, 10:54:48 AM »
Every case is different of course, but in the tech world the very best Canada/US situation is working remote. Collect a (slightly) smaller US dollar contract, and see it stretch to the moon in Canadian dollars. If your husband has a good relationship with his company and can swing a remote gig, you can have all that good USD cake and eat it too.
Wouldn't most people immigrating to Canada need the job to be in Canada in order to qualify for immigration?

if you look up Canada visa there is a very clear explanation of the requirements.  many of us would qualify as skilled workers bc of education and occupation, without a job offer

Josey_L

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Re: Case Study - Moving to Canada?
« Reply #37 on: July 25, 2018, 12:54:57 PM »
The recent post by letsdoit has inspired me to update this thread and say that we decided to make the move.

We've been in Canada for five months now and I think it's been a good decision. Yes, we took a pay cut; yes, the taxes are higher; and we are surprised to find that consumer goods are pretty pricey--especially dairy, which we apparently eat a lot of, gas, and phone/internet. Also, there is no end to the headaches associated with investing, moving our money between countries, and tax compliance.

But, overall we are enjoying taking a step away from US politics and finding people here to be very friendly. Our life is much more convenient, mostly due to our living in a much smaller city and closer to family. For raising a family and having a simpler life, I do think this is a better place for us. The jury is still out on whether we will stay. We miss our friends and the Pacific Northwest weather and beauty.

letsdoit

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Re: Case Study - Moving to Canada?
« Reply #38 on: July 25, 2018, 01:05:30 PM »
The recent post by letsdoit has inspired me to update this thread and say that we decided to make the move.

We've been in Canada for five months now and I think it's been a good decision. Yes, we took a pay cut; yes, the taxes are higher; and we are surprised to find that consumer goods are pretty pricey--especially dairy, which we apparently eat a lot of, gas, and phone/internet. Also, there is no end to the headaches associated with investing, moving our money between countries, and tax compliance.

But, overall we are enjoying taking a step away from US politics and finding people here to be very friendly. Our life is much more convenient, mostly due to our living in a much smaller city and closer to family. For raising a family and having a simpler life, I do think this is a better place for us. The jury is still out on whether we will stay. We miss our friends and the Pacific Northwest weather and beauty.

do you have family in canada?

letsdoit

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Re: Case Study - Moving to Canada?
« Reply #39 on: July 25, 2018, 01:06:25 PM »
i ask bc canada has been an interest of mine.  i know that we could pull it off, but we have no people in canada.


Josey_L

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Re: Case Study - Moving to Canada?
« Reply #40 on: July 27, 2018, 09:35:07 AM »


do you have family in canada?
[/quote]

No, we have family in Upstate NY, which is about 5 hours from us. We've seen them on a monthly basis rather than quarterly, which is a big improvement for us. We moved to a town where we knew not a soul and that can be challenging. I'm quite outgoing and we have a toddler who helps us meet people, so it hasn't been overly lonely. But we do certainly have pangs for our friends and family in the states.