Moving to Canada for Americans

In the U.S., Canada is generally regarded as the neighbour to the North. You may have heard about the healthcare, the friendliness, and the love of hockey that we have in Canada, but have you ever considered moving here? Perhaps you have considered immigrating, but you do not know where to start. This article will be talking about the benefits of moving to Canada, and the potential pathways that will allow you to immigrate here.

History of American Immigration to Canada

Sorry if this sounds too much like High School but I am quite a history buff myself and always appreciate some of the nuances that we see today from history, specifically the history of American Immigration to Canada. It dates back to the Revolutionary War in the 1700s when approximately 100,000 Americans, or United Empire Loyalists who wanted to stay loyal to Britain moved north. This was the first big push for American immigration to Canada. After that, many black Americans left the U.S. for Canada to flee the slave trade which saw a high amount of people come North and then again in the 20^th century, when almost 240,000 Americans fled to Canada to escape being drafted into the Vietnam War. Compared to the previous numbers, since 2017 there have been approximately 10,000 U.S. citizens moving into Canada each year and this number and interest has been increasing.

Reasons to Immigrate

Compared to all the countries in the world, why should you choose to move to Canada? Well, the U.S. and Canada are neighbours and share the longest land border in the world at 8,890 km. But that is not the only thing the two countries share. They are similar in terms of language and culture, so it is not a big cultural shock for U.S. immigrants to Canada. Although Canada does have English and French as an official language, the language barrier is pretty low compared to immigrating to other countries.

Canada is commonly referred to as a cultural mosaic compared to the U.S.’ cultural melting pot. Many Canadians were not born in Canada as they were born in another country and later naturalized in Canada. This means Canada has rich diversity in languages and cultures to experience, and there are people from all over the world that have chosen to make Canada their home.

You may have also heard of Canada’s healthcare system when comparisons are made between the two countries. Healthcare in the U.S. must be paid for out-of-pocket or through a health insurance plan. In contrast, the income taxes that Canadians pay partially fund the country’s health plan. This allows everyone to have equal access to healthcare at no additional cost. The concept that everyone should have access to healthcare is commonplace in Canada and something that Canadians are passionate in maintaining. 

We have decided to highlight healthcare as one of the biggest benefits and frankly this is the number one piece of feedback that we receive from people who are interested to move to Canada.

Immigration Pathways

Now that you have decided to move to Canada, how are you going to immigrate here? Here are some of the immigration paths that you can take coming from the U.S.

We have talked about the Express Entry in previous posts and have some great videos on this as well, but we will recap the general concept here. Express Entry is a points-based system based on age, work experience, and education. Your profile in Express Entry will be scored using the Canadian Comprehensive System (CRS), and you will be given a total score. For Express Entry, you need to be sent an invitation to apply to move forward with your permanent residency application. Permanent residence in Canada is similar to a green card in the U.S. Within Express Entry, there is the Federal Skilled Worker Program (FSWP), Federal Skilled Trades Program (FSTP), and Canadian Experience Class (CEC). The FSWP and CEC are the most popular pathways for Americans immigrating to Canada. One of the requirements for Express Entry is an English test, which most Americans are able to pass relatively easily because the U.S. and Canada are English-speaking countries. A benefit of applying through Express Entry is that there is a quick turnaround time for processing applications.

Provincial Nominee Programs are another pathway that is included under Express Entry, but the difference with this program is that provinces and territories can choose to nominate you. The criteria for each province or territory are different, so you will need to take a look at their requirements. In addition to the Express Entry streams there are also direct application systems via the provinces where you can apply and be nominated directly by the province.

Another pathway to permanent residence in Canada is through free-trade agreements. These include the Canada-United States-Mexico Agreement  (CUSMA), replacing the former NAFTA specifically when we are speaking about Americans who are wishing to come to Canada. According to the Immigration and Refugee Protection Regulations, a foreign national may be issued a work permit without requiring an LMIA to do work in Canada according to an international agreement between Canada and one or more countries.

An intra-company transfer is another way under CUSMA that allows individuals employed by an American or Mexican company in a managerial or executive capacity, or in one which involves specialized knowledge, to be transferred to the Canadian enterprise, parent, branch, subsidiary, or affiliate, to provide services in the same capacity. In order to fall within this category, you must be a citizen from the U.S. or Mexico employed continuously in a similar position outside of Canada for at least one year in the previous three-year period from the date of application as a basic tenet of being able to qualify under this type of program.

Advantages for Americans

Regarding the immigration pathways, there are advantages that Americans have compared to people from other countries when applying to Canada. Like we mentioned earlier, Canada and the U.S. are both English-speaking countries, meaning the difficulty in taking the English tests for Express Entry should be fairly low. In addition to this, U.S. citizens are allowed to carry two passports, meaning that if you apply for permanent residency in Canada and decide to become a Canadian citizen in the future, you can keep your U.S. citizenship.

An advantage given only to Americans relates to applying for study permits. The U.S. is the only country given this benefit, which is that they may apply for their study permit at the port of entry. Citizens of other countries must apply for their study permit before traveling to Canada, but a U.S. citizen or permanent resident can apply for one when they enter Canada at the border with a carefully crafted application package. This cuts down on the wait time for a study permit.  

Lastly, another advantage is the similarities in education between the U.S. and Canada. For Express Entry, you will be required to do an Educational Credential Assessment (ECA) if your education was not in a Canadian institution. However, this is not a large concern because the education levels between the U.S. and Canada generally tend to work out to be the same in comparison to other countries, more often than not.

Moving to Canada from a U.S. H-1B visa

The U.S. H-1B visa has allowed many young professionals to be employed in specialized fields, like IT, finance, accounting, architecture, engineering, mathematics, science, medicine, etc. The visa itself has been a great asset to boost the number of workers in the U.S.’ Silicon Valley. But what is a H-1B visa? A H-1B visa is a work permit that allows foreign workers to move to the U.S. and work for American specialty companies. When these specialized companies cannot find specialized workers in the U.S. to fill their in-demand jobs, companies look for foreign workers to fill these occupations. The visa requirements include a high level of education, licences if required, and highly skilled knowledge.

The U.S. is not the only country in search of individuals that can work in these fields. If you were able to enter the U.S. on an H-1B visa or are a current H-1B visa holder, it is likely that you would be a great applicant to immigrate to Canada. H-1B visa holders are the prime applicants for Canadian immigration. Since these workers are typically young, educated, have skilled work experience with fluent English skills, they are prime candidates for the Canadian economy. H1-B visa holders excel in all areas of the CRS points system for Express Entry, and these types of workers are always in-demand in the Canadian labour market.

Canada also has programs that specifically attract H1-B visa holders, like the Global Talent Stream or Express Entry. The Global Talent Stream allows Canadian employers to hire international talent to fill positions in in-demand occupations on the Global Talent Occupations List. A particular benefit of the Global Talent Stream is that employers can expect faster processing of their application, and the work permits of the workers can be processed in two weeks by Immigration, Refugees and Citizenship Canada.

If you are an H1-B visa holder and looking to immigrate to Canada, you should know that you are a great applicant. Your talents are most likely in demand here in Canada as well and you might find that you will have a faster path to permanence. You will still be able to secure a passport than head back to the U.S. through a treaty agreement in the future.

Tax Considerations

An important factor to think about for immigration is the differences in tax systems between the U.S. and Canada. The U.S. taxes on a citizenship basis, meaning that if you are a U.S. citizen or a green card holder, your income is taxed on a worldwide basis according to U.S. law no matter where you reside. If you are a U.S citizen, you must file taxes even if you are living in Canada or anywhere else in the world. They are one of the few countries to tax in this way.

In comparison, Canada taxes on a residency basis. If you are a resident of Canada, you are taxed on your worldwide income. The term “residency” is not defined in the Canadian Income Tax Act, so we look to common law, or case law, to help us define the term. In order to determine if you are a resident, a fact and circumstance test is applied. As a general rule, anyone who resides in Canada for over 183 days of the year is considered a resident for tax purposes. The Canada Revenue Agency also considers residential ties and other significant ties when determining an individual’s residency status. For example, significant ties include owning a home and having a spouse, partner, or dependents in Canada. Residential ties include owning personal Canadian property, social or economic ties to Canada (having a job or owning a business), and possessing Canadian documents such as a driver’s license, passport, or heath card.

After examining how the U.S. and Canada tax systems operate, it may seem that an American citizen would be subject to double taxation in Canada and the U.S. This can be avoided because of the Canada-USA Income Tax Treaty in place. Both countries allow credits to be taken on income tax returns for taxes paid to the other country. The treaty exempts a U.S. citizen living in Canada from being taxed by the U.S. on any income earned in and taxed in Canada. When obligated to pay taxes on the same income, double taxation is eliminated on an individual’s tax returns. A U.S. citizen can then claim foreign tax credit for taxes they pay in the U.S. on their Canadian tax return. As Canada generally has higher tax rates than the U.S., the tax owed in the U.S. can be used to offset some Canadian taxes.

Another difference between the U.S. and Canadian tax systems is that in the U.S., state taxation is out of the federal tax system, and each state has its own tax laws. Some states have no state income tax, whereas all Canadian provinces and territories charge an income tax. In Canada, provincial income taxes, except for Quebec, are coordinated with the federal tax system and are based on a percentage of federal tax.

Again, as Canada generally has higher taxes than the U.S., the question is often, why and where do my taxes even go? It is safe to say that Canadian tax dollars are largely put back into society to benefit the people who pay taxes. Canadian tax dollars go toward high-quality education, free universal healthcare, public facilities, social programs, economic development, and much more. In comparison, U.S. tax dollars mainly go towards social security, defence and international security, safety net programs, and Medicare.

Final Thoughts

We hope that this article has assisted in providing you more information about moving to Canada and the pathways that you can take. A move to a new country is never easy, but it would be easier to move to a country that would feel familiar yet provide a fresh experience for your next chapter in life. If you do decide to make Canada your next home, we will happily welcome you here!

Should you have any questions about moving to Canada from the U.S., feel free to reach out to us and we will surely get you started to understand the options that are available to you!

Ready to get started? Here are three ways we can help: 
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3. Ready to begin your journey? Join our 5-Day Immigration Blueprint Challenge. By the end of the 5 days, you will have an Immigration Blueprint™ outlining your pathway to Canada.