Canadians are moving to the U.S. at record levels, amid economic strain, tax pressures

The number of Canadians living in the United States has had its greatest increase in over 10 years, reaching a new record that both emigrants and experts say reflect Canada’s high tax rates and slow economy.

In 2022, the number of people born in Canada but living in the United States grew by more than 42,000 to a total of 821,322, according to data collected by the U.S. Census Bureau’s American Community Survey. This represents the largest growth in Canadians living in the U.S. since 2013. It is the first year since 2018 that there was a net increase of Canadians in the U.S. Canada does not publish how many citizens leave the country to move to the U.S.

Gary Hansen, a Canada and U.S. immigration lawyer of 30 years based in Calgary, says that the spike in Canadians now living south of their border is a sign of worsening Canadian quality of life.

“We know about the countries we deal with, and Canada’s really going backwards. Compared even with European countries,” he said. Canada’s typical “brain drain” is accelerating today, he added.

Most Canadians in the U.S. are living in California (the state with the greatest overall foreign-born population), followed by the states of New York and Florida.

Tax-friendly states such as Florida and Texas saw the largest surge of incoming Canadians. In 2022, the Sunshine State saw the biggest influx of Canadians at 21,935—followed by California (8,709), Texas (4,017), North Carolina (3,593), and New York (3,533).

Canadians' exodus to the U.S. is typically cyclical, at or near either country’s national election, said U.S. immigration lawyer Benjamin Green based in Toronto.

“We’re now in the third term of Trudeau. If you rewind back to 2016 [after he was first elected], our business almost doubled in the States,” he said.

The current exasperations of several new clients with the Trudeau government is similar, said Green, to several American clients who feared the outcome of then-president-elect Donald Trump in 2016.

The Facebook page “Canadians Moving to Florida & USA” has grown to 61,500 members. A father and entrepreneur from Oakville, Ont., who recently posted to the page and spoke to The Hub corroborated Green’s professional observation.

“All these freebie programs are turning Canada into an unaffordable place to live and raise children,” he said, referring to the Liberal government’s deficit spending. “We don’t need a nanny government.”

Likewise, Canada’s strict COVID-19 lockdown measures relative to the U.S. were a motivator for many Canadian citizens to depart.

Francois Bouvrette, a building painter in Montreal for 32 years who moved himself and his business to Florida last month however, agreed that a principal cause of the spike of Canadians in the U.S. is economic.

Bouvrette moved to Orland, Fla., last month to pursue exterior painting full-time with no previous connections to the state.

Transitioning from a “well-known” professional in Quebec to the Florida market has been hard work. But he said Florida’s growing economy has eased some of that pain. He’s excited about hiring a raft of employees to grow his team.

“Where we are, in the Orlando area, I think there is no recession. Not like the rest of the world,” said Bouvrette.

Low taxes are attractive for entrepreneurs and businesses and a factor behind the move to the U.S., he added. In Canada, the federal corporate tax rate is 15 percent. Provincial rates vary from 11.5 percent in Ontario and as high as 16 percent on Prince Edward Island.

The corporate tax rate in the U.S, meanwhile, is 21 percent. Texas has no state-level corporate tax rate. Florida has a 5.5 percent rate. The gap between these rates and the combined federal-Quebec corporate tax rate is a “very big difference” for his business, said Bourvrette.

Considering personal tax for someone earning $55,000 to $110,000 a year, Quebecers pay roughly 39 percent, Albertans 30 percent, and Ontarians 29 percent, according to the government of Canada. Compare this to Texas and Florida’s 22 percent, which is made up entirely of federal tax and contributions to the Federal Insurance Contributions Act.

Similarly, the strength of salaries and the U.S. dollar are increasingly attractive to immigration lawyer Hansen’s clientele of skilled Canadian workers heading for the U.S., namely IT specialists.

“The same person working in Canada in IT, and a lot of other occupations, can make at least 50 percent more in the U.S., in U.S. dollars,” said Hansen.

Green said he’s witnessed a similar drain on Canadian legal professionals.

“During the pandemic, a lot of people working in law in Toronto, Calgary, or Vancouver were saying to themselves, ‘The salary is so much more in the states. What am I doing [in Canada]?’”

The size of the U.S. market has historically drawn Canadians south of the border to expand businesses. Oil and gas companies currently seeing growth in Houston, Texas, in particular, are drawing many Western Canadian oil and gas workers, said Hansen.

The E-2 Treaty Investors Visa, established in 1994, has made this U.S. business expansion—and Canadian repulsion—significantly easier. It allows Canadians to live and work in the U.S. after investing in a U.S. business (with no minimum amount), or as an executive or essential employer to an E-2 Visa business.

More than 90 percent of E-2 Visa applications submitted in fiscal year 2022 (6,923) were approved according to Visa information website Visagrader. That’s 15 points more than the 75 percent approved in 2018. Six months after filing his E-2 Visa application and business plan that specified hiring Americans, Bouvrette said he was offered a compulsory in-person meeting at Toronto’s U.S. consulate.

“It took us about 15 minutes with maybe six questions, and we were approved,” he said.

“It’s a great loss to Canada,” said Hansen regarding increasing flows of Canadian business investment south of the border thanks to the E-2 Treaty Investor Visa.

Looking back to Canada, most emigration has recently occurred from the most populous provinces. From 2022 to 2023, for instance, Ontario lost 42,454, B.C. lost 18,553, and Quebec lost 13, 818. However, this level of emigration was more than offset by the rise in incoming immigration.

After adjusting for population, in 2023 British Columbia surpassed Ontario as the greatest exporter of Canadians per capita, and Alberta replaced Quebec as the third.

Between 2016 and 2019 across the provinces, emigration trended downward only to pick up in a large way in 2020.