Which Country Is More Expensive for Skilled Workers: Canada or the US?

Long-time neighbors and allies, Canada and the United States are both vast countries, ranking No. 2 and No. 4, respectively, among world nations by area. Both span the North American continent, from the Atlantic Ocean to the Pacific Ocean to the Arctic Ocean. And in both countries, sweeping geographic diversity is outstripped perhaps only by demographic diversity — not just within cities, but also from region to region.

For that reason, it can be hard to make generalizations about benchmarks like the cost of living. However, immigrants don’t tend to settle in the full spectrum of regions in either country. By and large, immigrants come to economically prosperous areas with plenty of job opportunities. And even among that subset of regions, they tend to settle in cities that already host a sizeable community of people from their home country.

That concentration of immigrants means skilled workers can actually reasonably predict how much it’ll cost them to live in either country. Comparing two popular destinations — the Toronto urban area and the San Francisco Bay Area — on factors like rent, wages and transportation can thus prove worthwhile for those looking to join the North American tech scene. So read on to find out how Toronto, the center of Canada’s innovation ecosystem, stacks up against Silicon Valley on these three key metrics.

Rent

The Bay Area’s rental market is infamous for a reason: With the going-rate for a one-bedroom in San Francisco hovering at about US$3,600, the affordability crisis is a real burden on the area’s residents. That’s a lot of cash, to be sure, but the real problem with the Bay Area housing market is that leaving San Francisco city limits doesn’t save workers as much as you might think.

Average rent in historically working-class Hayward, an increasingly popular community for commuters, still exceeds US$2,000. And average rent in Fremont, the center of the Bay Area’s Indian community, is even higher, at over US$2,500. To see a meaningful drop in rent prices in the Bay Area, workers often have to go more than 30 miles out of urban centers. And with the Bay Area’s transportation issues becoming increasingly dire, more and more people are finding themselves questioning whether employment in the Bay Area is really worth it.

Toronto’s rental market, by comparison, comes at a major discount, at just US$1063 for an average one-bedroom. Though prices do increase as you get closer to the city center, the fact that you can rent a one-bedroom within Toronto’s city limits, connected to the city’s modern, multi-modal transportation network, for one-third to one-half of what you’ll get in the Bay Area, is still a major point in Toronto’s favor.

Transportation

Transportation in the Bay Area isn’t just slow: It’s expensive. If you do choose to face the horrendous commuter traffic, be ready to pay as much as $8 to cross one of the area’s many bridges. But don’t expect public transportation to come cheap, either. The most expansive of the region’s rapid transportation networks, BART, offers no monthly unlimited passes. Additionally, instead of a flat, per-ride fare, BART fares increase with distance to as much as US$8.75.

In Toronto, by comparison, most public transportation — including buses, streetcars, a light-rail line, and three heavy-rail subway lines — is handled by a single agency: the Toronto Transit Commission. Together, these transit lines provide a cost-effective option for residents to get to all corners of the city, with single-fare purchases for adults costing a flat amount of $3.25, while monthly passes make commuting costs even more reasonable. And because they’re all operated by the same agency, free transfers between subway and bus routes are also offered.

In short, TTC represents the unified, comprehensive transportation system you’d expect from a modern city, while the Bay Area continues to lag — to the constant frustration of its residents.

Wages

The cost of daily expenses only becomes relevant when weighed against how much money people in that area are earning. The cost of living might be very cheap in the Midwest region of the U.S., for instance, but if the salaries are too depressed — as they often are in that region — then residents in more expensive, coastal cities are still better off.

But higher salaries aren’t always better, either. In Toronto, the average annual household income is US$59,209, while the average annual income in San Francisco is US$96,265 — about 50% higher. But because rent, among many other factors, is so much more expensive (about 3.5 times as much!) in San Francisco, the salary bump you might get doesn’t necessarily make up for the higher costs you’ll take on. Also, note that San Francisco’s average income includes only the highest earners in the area — those who can afford to pay the city’s steep rents.

The upshot is that if you want your money to go further, living in a Toronto suburb will very likely furnish you with more money to put into savings and spend on entertainment than living anywhere in the Bay Area will.

A Bay Area Exodus

While people from around the world still flock to the Bay Area every year, banking on tech jobs opening up a path to a better life, an entire cottage industry is growing up around the relocation of Bay Area natives and those disillusioned with the region. It’s such a phenomenon that the San Francisco Chronicle even hired a beat reporter who — you guessed it — ended up leaving the Bay Area herself.

Among the places these former Bay Area residents ended up? Canada, according to a Chronicle profile of these Bay Area émigrés. Attracted by Canadian perks like free national healthcare, high-quality education and a lower cost of living, these former Bay Area residents experienced for themselves how the Bay Area housing market can squeeze even hard-working natives out. Skilled migrants actually have the advantage here, then, in that, they can skip the whole ordeal, and go straight to joining these former Bay Area residents who are living and thriving in Canada.

If you’re interested in learning whether Canada is a good fit for you, join our free immigration portal to learn more about the different options here.