Each year I help over 500 clients file their Canadian and US tax returns as well as plan for both their Canadian and US investment accounts. I also regularly help new US clients plan for their move to Canada.
As Mark Twain once famously noted: “Age is an issue of mind over matter. If you don’t mind, it doesn’t matter.” Wonderful words to live by and at no time more relevant than when considering the much-anticipated move into retirement.
And with the average retirement age for Americans sitting relatively stable around 63, where you retire is an increasingly important decision. In 2018, for instance, over 930,000 Americans over the age of 60 moved across state lines to retire. The top destinations: Mesa, Arizona; Spring Valley, Nevada; Scottsdale, Arizona; Lakeland, Florida; and Corpus Christi, Texas.
But with the most recent U.S. Census reporting almost 48 million Americans age 65, the rush for retirement real estate is increasing every year, which translates into increased competition for properties, higher prices, and a diminishing inventory of retirement options with the amenities that retirees want and need.
So, it is not that much of a surprise to find out that more and more Americans are looking north of the border into Canada for retirement options. With a population of only 38 million (about 89 percent smaller than the U.S.), the friendly neighbor to the north offers some amazing opportunities for retirees to live comfortably, safely, and affordably while remaining within easy reach of friends and loved ones.
According to Investopedia, there are several great reasons for Americans to look north of the border to Canada when considering retirement destinations. Besides the comparatively low crime rate and affordable housing, there are some powerful incentives that might look to the Great White North as a potential landing spot for your golden years. These include:
Eligibility for Universal Healthcare and Pharmacare Benefits
Once you receive permanent resident status (much different than citizenship), you are eligible to enjoy the benefits of Canada’s progressive healthcare and pharmacare programs. These are designed to ensure that every citizen has access to the medical care they require and that prescription medicines are accessible and affordable. The facts are compelling:
- Unpaid medical bills lead to more bankruptcies in the U.S. than any other form of debt, including mortgages and credit cards
- More than 66 percent of American seniors who file for bankruptcy cite health problems and medical expenses as the primary reason.
In other words, a move north means less concern about whether your health-care insurance is robust enough to protect you from unexpected issues.
Given that the two countries share the longest unguarded border in the world, it is not surprising that Canadians and Americans are similar in many ways. Given that 75 percent of Canadians live within 100 miles of the border, the culture shock of moving north is much less than it will be than moving to a sun-and-surf destination where so many things (including the language) might be different.
Except for the major urban centers, real estate remains reasonably priced across the country. And with the exchange rate historically favoring the U.S., your dollar goes further when you make the conversion to the brightly-colored Canadian currency.
Friendly Warning About Taxation
Many are not aware of this before they enter Canada, however Americans moving to Canada will have additional tax filing requirements as a Canadian tax resident. As US citizens are required to file US tax returns regardless of whether they live in the US they will be required to file both Canadian and US income tax returns each and every year. Moving investments up to Canada can also result in significant tax consequence if not properly planned for. Make sure to speak to a competent cross border tax advisor before making the move up North.
Often, retiring to Canada can simply mean a short drive back to visit friends and family. At worst, it can mean a quick trip to the nearest American city to take advantage of low domestic fares for major and regional airlines.
When considering which of the Canadian provinces might best suit your retirement, remember that there are three types of sales taxes in Canada: Provincial Sales Tax (PST), Goods and Services Tax (GST), and Harmonized Sales Tax (HST). These rates do vary by province, so here is a quick overview of what to expect:
Province PST GST HST Total Tax Rate
Alberta 5% 5%
British Columbia 7% 5% 12%
Saskatchewan 6% 5% 11%
Manitoba 7% 5% 12%
Ontario 13% 13%
Quebec 9.9% 5% 14.9%
New Brunswick 15% 15%
Nova Scotia 15% 15%
Newfoundland 15% 15%
The Best Places and Why
Leaving aside the money-is-no-object options like Toronto and Montreal, here are the best places to consider when pondering a northward retirement. From west to east they are:
Victoria, British Columbia
With a population of under 400,000, Victoria is the southernmost major city in western Canada and only about 60 miles (via ferry) from Vancouver. Known as “The Garden City,” it ranked in the top 20 world cities for Quality of Life and boasts a temperate, usually snow-free climate, relatively affordable housing, and low property taxes. It is also the driest location on Canada’s west coast thanks to what is known as the rain shadow effect of the nearby Olympic Mountains. All of which makes it the perfect destination for retirees looking for ocean waves and mountain views, a vibrant cultural scene, year-round recreational activities, and all the city amenities with a small-town feel.
Vancouver, British Columbia
The largest (over 2.4 million in the Greater Vancouver area) and most expensive options on our list, Vancouver is, nonetheless, a favorite destination of Americans retiring north. With its constant top ten ranking on lists of the world’s most livable cities (as well as those measuring quality of life), Vancouver is the gemstone in a province with the motto Super, Natural BC. Located on the Burrard Peninsula just east of the Strait of Georgia, the city offers views of the North Shore Mountains and, on clear days, of Mount Baker in the state of Washington. Culturally and ethnically diverse, it has something for everyone: one of the largest urban parks in North America (Stanley Park), a vibrant arts scene, and dining that rivals cities anywhere in the world. Recreational activities encompass everything from ocean boating and kayaking to world-class skiing and snowboarding at Whistler Blackcomb (about a 2-hour drive).
Nearby North Vancouver can offer a more affordable alternative without losing any of the benefits of the west coast lifestyle. Connected to Vancouver by two bridges and a sea shuttle, it is a smaller community (under 100,000) nestled in the North Shore Mountains. Life on the North Shore offers proximity to some of the area’s most attractive recreational activities, from hiking to skiing, as well as an impressive park and pathway system.
Kelowna, British Columbia
Tucked neatly in the Okanagan Valley, Kelowna has all the benefits of west coast living (lakes, lush landscape) but with 50 percent less rain than Vancouver. And if you plan for golf and wine to define your retirement, Kelowna has over 2,000 hours of sun every year, making it one of the longest and driest golf seasons in the country. Which is good, because, with 19 courses within close proximity, you will never tire of the options available. This city of just over 130,000 is also the birthplace of winemaking in the province, with over 40 wineries within a 20-minute drive. In fact, there are 5 designated wine trails for you to explore.
One word describes this hidden gem: nature. Within an easy drive of several national parks, including Banff, Yoho, Kootenay, and Jasper, Canmore is also only 50 miles west of Alberta’s largest city, Calgary. With a population of under 15,000, it is an outdoor enthusiast’s dream and boasts a plethora of festivals, outdoor events, and activities throughout the year. Summers are short and winters long but for the avid skier, these words are music to live by. Bonus: Alberta as the lowest sales tax rates in Canada (5%), which means that your dollar buys a bit more when shopping in Wild Rose Country.
The nation’s capital is home to over 1 million people but still has the atmosphere of a smaller and distinctly European city. Although housing is a bit more expensive here than in other cities on our list (property taxes are about the same), this is an option that offers an appealing blend of convenience, culture, attractions, and affordability. Within one city you can tour Parliament Hill, explore several of Canada’s national museums, cross the river into Quebec, and shop in the iconic Byward Market. Depending on the season, you can also paddle, cruise, or skate on the famous Rideau Canal (a UNESCO World Heritage Site).
Conveniently located between Toronto and Ottawa, Belleville sites on the eastern end of Lake Ontario. In short, this small town (population of around 50,000) has it all when it comes to location, location, location. With all the benefits of small-town living in a beautiful natural environment, it offers retirees plenty of lifestyle flexibility. Want the shopping and culture of Toronto? It’s only a short drive or train ride away. Looking to explore the European influences of Montreal or Quebec City? Again, only a day’s drive or hop on a train and enjoy the scenery. You will also experience all 4 very distinct seasons while you enjoy your affordable new home and low property taxes.
Collingwood is a central Canadian gem. Situated at the southern point of the majestic Georgian Bay, it is a true Canadian small town with a population under 25,000. Located in the snow-belt region of Ontario, it does receive modest amounts of rain and snow throughout the year. But snow is also part of the appeal, especially for active seniors. Collingwood is a prime destination for seasonal recreational activities, including swimming, biking, skiing (both cross-country and downhill), and watersports of all kinds. For hikers, Collingwood offers easy access to the famous Bruce Trail and conservancy areas.
Quebec City, Quebec
Although most locals speak French, Quebec City is a truly multicultural (and bilingual) retirement destination that offers all the amenities of a European city with under 1 million residents. If history and atmosphere appeal to you, your retirement destination awaits. The neighborhood of Old Quebec City alone makes this an option worth considering. The only fortified city north of Mexico and a UNESCO World Heritage site, it is the historic and cultural heart of Quebec City with its cobblestone streets, historic colonial architecture, and fine shopping and dining experiences. You will definitely enjoy 4 distinct seasons here and be sure to plan for plenty of visiting friends and family during the summer months.
If French is a language you are comfortable with (or if you want to learn it as part of your retirement plan), Saguenay might be an option to explore. Best known for the nearby, and dramatic, fjord leading into the St. Lawrence River, it boasts a population that is perpetually near the top of Canadian surveys of life satisfaction. In other words, people who live here really like living here. It is also an easy day drive or train ride from Quebec City, which allows you to balance the benefits of a rural lifestyle with the amenities of a larger, European-influenced city.
Fredericton, New Brunswick
Heading to Canada’s east coast, you find one of the most affordable retirement destinations on our list in terms of housing, property taxes, and the cost of living. Located along the banks of the Saint John River, Fredericton also celebrates its rich, multicultural history (population around 60,000) that influences the local lifestyle even today. Arts and culture are especially important in the city, so if music and painting are part of your retirement plans, this is the place for you. As a bonus, Fredericton has the highest concentration of breweries, meaderies, cideries, and distilleries in Atlantic Canada.
Charlottetown, Prince Edward Island
A small city (under 40,000 people) and the farthest east of our picks, Charlottetown has a distinctive and alluring island charm. Seaside streetscapes, classic lobster boats, and spectacular beaches within easy driving distance, it has in recent years also seen a culinary and arts renaissance for those looking for those amenities as part of retired life. Summers are mild, winters do see regular snow, though less than many cities across the country.
There is something for everyone considering retirement options in Canada. From west to east, from the seaside to mountainside, and from a focus on culture to every recreational option imaginable, you can find what you are looking for in these best places to retire in Canada.