Sep 11, 2019 – The message for potential immigrants is clear: Members of Canada’s middle class are better off than their American counterparts, according to a new report.
The Centre for the Study of Living Standards report casts doubt on the long-held belief that Americans earn more than Canadians.
While the report finds this remains true for the top earners, it also concludes that Canada is ahead of the U.S. on median household income, by $59,438 to $58,849.
Source: Centre for the Study of Living Standards
Canada has also pulled ahead on income distribution, the report finds. It reads: “The main finding is that 56 per cent of Canadian households are better off than American households at the same point of the income distribution.”
This means that, on average, the bottom 56 per cent of Canadian household incomes are higher than the bottom 56 per cent of U.S. households.
The report uses Purchasing Power Parities (PPPs) from Statistics Canada to convert Canadian incomes into U.S. dollars.
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“This result illustrates how the usual comparison of incomes between Canada and the United States using GDP per capita or average household income hides a critical part of the story,” the report reads.
“Indeed, American society has greater income inequality, such that the higher average is driven by incomes at the top of the distribution.
“For poorer or middle-class Canadians, their incomes actually compare favourably to those of their American counterparts.”
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The report highlights its own limitations, including that the analysis is one income before tax. However, while income tax is higher in Canada, access to public services is also better, most notably through universal healthcare.
The report suggests that, were all of these factors considered, the gap would be even greater in favour of Canada.
Perhaps the starkest finding of the report is how much better off the poorest Canadians are than their American peers. Income inequality in the U.S. is vast compared to Canada.
Americans Want To Leave For Canada
Meanwhile, a poll released in January 2019 revealed more than a quarter of Americans looking to leave the U.S. want to move to Canada.
The Gallup survey says 26 per cent of Americans who wish to leave put Canada as their favoured destination, up from 12 per cent in 2016.