| As an immigrant to Canada, I've spent considerable time comparing the numbers and while it is fact that numbers will simply be bigger in the US, the direct number comparison suggests that the "brain drain" issue is a mix of tax burden from Canada and better US opportunity. The first thing to consider here is that Canadians are in an unique position to move to the US. They are more likely to have family, friends, travel for leisure and business, easier work visas (TN), Canadian universities are recognized in the US, and so on. Second thing is that for the people that have the means, moving early in life to the US might be the factor between affording the life you want with ease vs having to compromise. Many of my friends in tech that moved are saving 1.5x to 2.5x compared to the ones that stayed. So I don't see a way for Canada to not be a source of talent to the US market. But I also don't believe that is the most interesting question. The question that I believe matters most here from a society/economy perspective is: is Canada's economy providing the right incentives for innovation and entrepreneurship? From that perspective the first thing that needs to be addressed is that we can't compare only taxes rates and income. Canada has a very different tax system, where being able to maximize your TFSA and RRSP will probably set you up pretty well for retirement. Cost of housing is high, but cost of borrowing can be much lower than similar US mortgages. Canadian taxes also include healthcare that is more efficient (cost wise) than the American model. So while you can get rich faster in the US, the reality is that you will need a lot less income to achieve similar quality of life depending on the cities you are comparing. My personal notes for Vancouver, BC vs Seattle, WA concluded that for a family of 2. The gross income required to live a fair life that includes:
- owning a decent property
- be able to retire with no need to reduce cost of living
- taking vacations and going out often
- hedging health costs
You are looking for around 200k CAD vs 250k USD of steady yearly income. Those incomes are very achievable in both places for people that are considered top talent and companies can provide such income locally. On the tax side, Canada could improve, but I don't believe that lowering taxes will bring much value. Where Canada seems to struggle is on the regulation side. Canada is aligned with the US, which means that when addressing the Canadian market, your business is most likely also able to easily address the US market. This means that you will probably be better of setting up your center of operations in the US and not in Canada. At the same time, big Canadian focused corporations operate mostly in an Oligopoly way. Smaller companies need to fight both regulatory requirements that didn't exist before and have a harder time getting the money they need to scale operations. Adopting European (and Asian) standards could severely improve competition as companies could more easily extend operations into Canada without having to also support the US market, while in the long term Canadian companies would be able to choose the regulations that give their products the access to the most appropriate markets. |