A couple of months ago, I wrote a column in this space on the Price Waterhouse survey that reported ambitious Canadians could increase their disposable incomes by 40 per cent, just by emigrating to the United States.
A Toronto-area couple who four years ago moved to Spring, Texas, a Houston suburb, for new jobs have challenged that simplistic notion, their interesting, firsthand observations serving as a warning to any footloose Canadians considering a similar transfer to the cheaper “paradise” across the border. “Your article upset me,” wrote Yvonne Facey, a chartered accountant and University of Western Ontario MBA who went south with her actuary husband, “because too many Canadians think that moving to the United States is all roses and more money. Coming as a chief executive or being transferred within your own firm may be better, but coming as we did, to take new jobs within strange companies, is not a financially sound road. We might have returned after a year, but our funds were so low that we could not re-buy the house we had sold a year earlier near Toronto.”
The Faceys had owned a 3,000-square-foot, four-bedroom house on a ravine in Oakville and purchased a comparable home in Texas. While my Canadian survey figures claimed that American houses cost less than half as much, Facey writes that the purchase price fails to reflect the total picture, or compare lifestyles. For one thing, Texan houses are constructed under less strict building standards—unfired brick, little or no insulation, slabs instead of foundations and so on.
More important, municipal services that Canadians take for granted are billed extra. The Faceys face a special monthly levy for street lighting and policing in addition to their property taxes. “To have security protection,” Facey writes, “our subdivision pays 70 per cent of the local constable’s salary. Actually, our property taxes doubled between Oakville and Houston. If you want your children to attend a decent
The commuter vehicle of choice is a heavy pickup. And more than a third of the drivers are armed with handguns. ’
local school, you have to live in an area where the property tax is double or triple the average rate, since education now receives virtually no state funding.”
While mortgage payments on homes are taxdeductible in the United States, none of the expenses listed above qualifies, and there is no capital-gains exemption on the sale of principal residences. According to Facey, one reason why the U.S. cost of living is so much higher than it appears from this side of the border is that most American transactions involve middlemen. Deregulation of telephone companies, which has created a separate long-distance service, means that you pay two phone bills, usually double the equivalent Canadian costs. Monthly cable television charges are also twice as high. “We sure miss the telephone and banking oligopolies,” laments Facey. “The banks here charge for everything, and you have to keep watching them, in case they go under and freeze your deposits.”
Day care is unregulated, expensive and suffers from poor child-teacher ratios. To get proper attention for their daughter Stephanie, now 5, the Faceys had to move her six times in the past 48 months. For her to attend kindergarten in a private school, the family has to pay $5,650 a year, drive her eight kilometres twice a day and pay $8 an hour for after-school activities.
“In the legal system here,” complains Facey, “the attitude is, ‘If you don’t like something, then sue.’ Crime is rampant. Houston, with only one-third more people than Toronto, last year recorded more than 600 murders, compared with Toronto’s 56. The district attorney’s office won’t touch a white-collar crime unless its investigation ensures a conviction. Texas prisons are overflowing and the criminals know it. The police bring them in, and the next day they’re out again. It costs about $1 million to take a murder trial through to the death penalty. The commuter vehicle of choice is a heavy pickup. And more than a third of their drivers are armed with handguns.”
Apart from the violence, the Faceys have noted a definite difference in ideologies between the two countries. “Canadians are more willing to give up their individual rights for the good of the whole,” Facey claims, “while Americans are raised on individualism, trying always to be the best. They are typically optimistic while Canadians by comparison are pessimistic. The pursuit of individualism is very strong and fuels the drug scene, feeding a ‘fend for yourself’ attitude towards the homeless or those who cannot afford medical insurance. The average person may be scared, but it’s so fundamental to bear arms and pursue individual rights that they are at a loss to even realize it may be the cause of some of their problems.”
According to the Faceys, salaries in the Houston area are lower for comparable jobs, with a qualified corporate controller getting $55,000—$15,000 less than the Toronto starting salary for the same job; there are no legislated severance laws, no maternity leaves and, of course, no medicare. (The cost of private medical plans is astronomical, but hospitals don’t always recognize the insurer. You pay first and then try to collect from the company.)
“The work week down here is a minimum of 40 hours and you only get two weeks’ vacation unless you’re very senior management,” they write. “Social security costs 7.5 per cent of income for the full-time employed and 13.5 per cent for the self-employed.”
Texas laws are different from ours. A common-law spouse, for example, has full property rights from the first day of co-habitation, while both state and federal governments impose estate taxes. Something called the Federal Homestead Act prohibits the use of one’s home to raise equity financing. Mortgage rates are considerably lower in the United States, but many more players are involved in house transactions so that not only legal and title fees but such special levies as an origination fee are required. Each subdivision has its own water district, which can turn out to be expensive.
Despite these and other problems, the Faceys are not coming back to Ontario. “After four years and some rough lessons, we’re doing fine,” the Facey letter concludes. “We love the weather and the lifestyle and aren’t longing to return to Canadian winters. And we love Sunday shopping.”
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