An estimated 4 out of every 10 Canadians talented enough to be in this country’s top 1% of earners don’t actually live here. They’ve left. That’s according to a recent Bank of Canada study.
Of Canadian citizens who permanently emigrated to wealthy nations in 2023, nearly half chose one destination: the United States. And they earn roughly double what the average American does.
At Blueprint Financial, we’ve been helping more people than ever move to the U.S. If you’re a high-income Canadian, there are three forces pulling your peers south. Today I’m going to walk you through all three, starting with…
The Salary Gap
A senior software engineer in the Greater Toronto Area earns an average total comp of about CA$138,000. Same title, same seniority, Austin, Texas? About US$205,000. At today’s exchange rate of roughly 1.38, the Austin engineer is pulling in the equivalent of about CA$283,000.
Toronto is paying 49 cents on the dollar. For the same job.
It’s like running the same race, in the same lane, at the same speed, except someone moved your finish line twice as far away.
And at the big tech companies it gets almost comical. At the FAANG level in Austin, total comp packages can push well past US$350,000. In Toronto? You’d be lucky to crack CA$300,000 at the same level. Convert those to the same currency and the Austin engineer is pulling ahead by over CA$180,000 a year.
The University of Toronto consistently ranks in the global top 25 for computer science. Yet its graduates routinely cross the border for significantly higher starting salaries. U of T is essentially a publicly funded talent pipeline for Silicon Valley.
And it’s not just tech. The same Bank of Canada research I mentioned earlier found that the income gap between Canada and the US is small for middle income earners. A Canadian teacher and an American teacher look pretty similar.
But at the top, it widens dramatically. Business owners, university-educated professionals, high-income earners across the board. If you’re watching this channel, there’s a good chance that you’re one of these high achievers.
And the people leaving are exactly who you’d expect. 67% of Canadian emigrants are between 20 and 44.Close to 70% have a university degree.
But here’s the thing that should keep you up at night. If you’re leaving $145,000 a year on the table, that’s $1.4 million over a decade. Before investment returns. Before we even get to taxes. That’s not a lifestyle difference. That could be generational wealth you’re just… not building.
Before getting into taxes, there’s something I’ve been building for those leaving Canada that I’m quite excited about.
The Tax Gap
So you’re already earning less. And then the tax code takes a bigger slice of what’s left.
Meet Ryan and Chantal. Toronto, both working professionals, combined household income of $400,000 Canadian. Their top combined rate in Ontario? 53.53%. On every dollar above roughly $258,000, the government takes more than half.
Now meet Tyler and Ashley. Combined household income of $400,000 US. That’s worth about CA$550,000 at today’s exchange rate, so they’re already earning more in real terms. They live in Austin, Texas. No state income tax. Their top federal rate? 37%. And those brackets are now permanent under the One Big Beautiful Bill Act, signed July 2025.
So what does that feel like in actual money? An extra $45,000 to $50,000 a year staying in Tyler and Ashley’s pocket. Every single year. And remember, they were already earning more in purchasing power before taxes even entered the picture.
And it’s not just employment income. Dividends, capital gains, investment income… the US taxes almost all of it at meaningfully lower rates. If you’re running a CCPC and paying yourself through dividends, the gap alone can mean tens of thousands a year.
And here’s what really compounds the damage. That extra $45,000 to $50,000 Ryan and Chantal are handing to the CRA? Tyler and Ashley are investing. Inside a system with more tax-advantaged room, too. Over a 20-year career, that’s not just a tax difference. That’s a completely different retirement.
If you’re staring at these numbers and thinking about your own situation, this is exactly what we do at Blueprint Financial. Cross-border tax planning, residency strategy, the whole picture. Book a discovery call in the description. And grab our free guide, 7 Biggest CRA Tax Traps When Leaving Canada, at 👉 https://blueprintfinancial.ca/exit-canada-tax-guide-download.
The Entrepreneur Exodus
This isn’t just employees chasing bigger paycheques. Canada is losing the people who build things.
Elon Musk started at Queen’s University in Kingston, Ontario. Two years later he transferred to Penn. Then Stanford. Then built PayPal, Tesla, SpaceX, and one of the most valuable collections of companies on earth. All in the United States. Not because he couldn’t have stayed. Because the capital, the talent pool, the regulatory environment, and the sheer scale of the American market made it a non-decision.
“Capital goes where it is welcome and stays where it is well treated.” — Walter Wriston, former CEO of Citicorp.
And Musk isn’t the anomaly. He’s the pattern.
A Leaders Fund study tracked nearly 3,000 venture-backed startups founded by Canadians over a decade. In the 2015 to 2019 cohorts, over 67% headquartered in Canada. By 2024?Just 32.4%. Nearly half had moved to the US. And the gap in output is staggering. The US went from producing 11 times more high-potential startups than Canada in 2015 to 45 times more in 2024.
And just to show you how real-time this is. Late last year, Y Combinator, the most famous startup accelerator on earth, quietly removed Canada from its list of investable countries. They reversed it about two weeks later after the backlash, but the CEO, Garry Tan, born in Winnipeg by the way, said that Canadian startups reincorporated in the US earned twice the average valuation of those that stayed.
Now, here’s something most people covering this story miss. Incorporating in Delaware is not the same as personally emigrating to the United States. A lot of Canadian founders set up a US entity for access to American capital while still living in Toronto or Vancouver. That’s a business strategy, not a move.
But if you’re a Canadian resident running a US-incorporated company, you’ve just created a controlled foreign affiliate situation. And the CRA has very specific rules about how that passive income gets taxed back to you in Canada. It’s called FAPI, Foreign Accrual Property Income, and it is not optional.
This is something we deal with constantly at Blueprint Financial. And the mistake we see over and over is founders who think moving the company moves the tax problem. It doesn’t. If the structure doesn’t match the residency, you end up paying taxes in both countries on income you thought you’d sheltered.
Before You Pack Your Bags
Everything I’ve just shown you is real. But I sit across the table from people making this exact decision every month. And the ones who rush it? They get hurt.
The day you leave Canada, the CRA treats you like you sold almost everything you own. Non-registered investments, stock options, shares in your holding company… deemed disposition on all of it. You haven’t actually sold anything. But you owe tax as if you did.
Picture this. You and your spouse are in your late 40s. You’ve done well. A non-registered portfolio, shares in your holding company, stock options you haven’t exercised yet. At Ontario’s top rate, the departure tax bill alone could clear $120,000. You haven’t packed a single box and you’re already writing the CRA a six-figure cheque. And if you’ve spent 20 years building wealth inside a CCPC, the deemed disposition on those shares can be the biggest tax event of your life.
Then there’s your TFSA. Your RRSP is fine… the Canada-US tax treaty recognizes it. But the US doesn’t recognize your TFSA at all. Every dollar of growth, every dividend, every capital gain inside that account… reportable and potentially taxable from day one. Years of tax-free compounding, gone.
And for the high earners under 44 who think they’re making a clean break… you’re potentially walking away from over $2,000 a month in guaranteed retirement income at 65 between CPP and OAS. Indexed to inflation. For life. You don’t feel that at 32. You feel it at 65.
The move can make sense. But the people who come out ahead planned for it. And they started earlier than they thought they’d need to.
Conclusion
The gap is real — in salary, in taxes, and in what you may owe the CRA on your way out the door. The people who come out ahead are the ones who take the time to run the numbers before they make the move.
If you want to see what that looks like for your situation, explore our financial planning services.
And for more practical insights on taxes, cross-border planning, and smarter financial decisions, join our free financial newsletter.
The right numbers — at the right time — can make a significant difference in your outcome.
