There are many similarities between the neighboring countries of Canada and the United States. Both countries enjoy football. Each country plays host to the entertainment industry in big city locales like Toronto, Vancouver, Los Angeles, and New York City.
Each country has its differences, though. Today we’ll focus on three differences between Canadian and American financial services.
One of the most significant differences between Canadian and American financial services is insurance. Though health insurance focuses on helping a person get better from whatever medical ailment they are dealing with, there is a substantial financial component. Health coverage is a big topic of debate in both countries, largely because of the costs associated with providing health insurance. Let’s start with the US. Most Americans receive their health insurance through their employer, through private health insurance. The costs for such health plans are deducted from their paychecks, providing them with access to different forms of health care. In the cases of such plans, a spouse and the children of the insured might be covered as well. Unfortunately, the out-of-pocket costs for such plans can be high, forcing many Americans to forgo even seeing a physician.
All in all, Americans pay more for their healthcare while also dealing with unexpected or sudden costs associated with being treated. Even with the passage of the Affordable Care Act (ACA), many people are still hit with expenses when dealing with health insurance. Medicare is also coverage that is available for senior citizens. In the case of Canada, the national government funds health insurance. When a Canadian citizen visits a hospital or general practitioner (GP), these services are covered within their government insurance plan. The government has made it illegal for private insurance companies to cover services covered by government insurance. Canadians mainly pay for healthcare through their taxes. Higher earners in Canada pay more for healthcare than lower earners do. These are but a few differences between Canadian and American insurance financial-related services.
There are a few differences between the financial institutions of both Canada and the US. Many of these differences extend to different types of banks, including investment banking, commercial banking, and retail banking. The first difference is that Canadian banks tend to promote safety and soundness. This includes EQ Bank, which many consider to be the best bank in Canada. Many banks in Canada, such as the Royal Bank of Canada, the Canadian Imperial Bank of Commerce, Scotiabank, the Toronto-Dominion Bank, and the National Bank of Canada, adhere to these standards. Conversely, banks in the US seem to be more focused on privacy, anti-money laundering, banking access, and consumer protection measures.
In addition to this, Canada has fewer banks. There are approximately 28 domestic Canadian banks. In the United States, there are over 7,000 banks. The banking environment of the United States tends to be a bit more crowded and competitive at the end of the day. The Canadian bank system is a bit more concentrated when it comes to its financial institutions. The “Big 6” banks or Canada (Toronto Dominion, Royal Bank of Canada, Bank of Nova Scotia, Bank of Montreal, Canadian Bank of Commerce, and National Bank of Canada) control more than 85% of domestic assets. The banking practices of each country’s financial institutions are a significant difference between the United States and Canada.
Cost of Living
The cost of living between Canada and the United States is also different. Generally speaking, the cost of living in Canada is higher. This includes higher taxes, the cost of food, higher gasoline rates, and utility rates. Though the cost of living in the United States overall isn’t that much different, Canadians have to pay higher taxes due to having a better state of life through government services (healthcare). Thus, the cost of living is an excellent example of gauging the costs of financial services.