Canadian citizen returning to canada after a long absence tax

Many of our US-resident clients are actually Canadians who moved to the US to work and now want to return home to Canada. Perhaps their US employment contract has come to an end or an excellent employment opportunity has arisen in Canada. Other Canadians returning from US employment simply want to be closer to family and friends who live in Canada.

Regardless of the specific reason for moving back to Canada, Canadians returning from US employment often have similar questions. First, they wonder what to do with their US immigration status. If they had a Green Card, they wonder whether they should surrender it. If they held a work visa, questions about what to do with their visa also arise. Another common question is how quickly they will be able to once again access Canada’s health care system upon arrival north of the border.

Canadians returning from US employment also wonder whether they will be able to receive US Social Security payments if they move back to Canada. Typically, Canadians who have worked in the US have established US retirement accounts such as Individual Retirement Arrangements (“IRAs”), Roth IRAs, 401(k)s, 403(bs), and/or 457(b)s. How to handle these assets when moving back to Canada is another important consideration.

Cross-border tax questions are also primary. Canadians who have been working in the US may already be familiar with the fact that the US taxes its citizens and permanent residents on their worldwide income, regardless of residency. Canadians with US permanent residency status or dual citizenship who are moving back to Canada must therefore make sure that they are not caught in any cross-border tax traps.

As the above questions illustrate, making the decision to move back to Canada after working in the US necessitates careful pre-departure tax, estate, retirement, investment, and immigration planning. Keep reading for more information about these cross-border financial planning topics as they apply to Canadians returning from US employment.

Please note that the below information sometimes refers to “Americans” or “US persons”. These terms apply to i) Canadian citizens who are also American citizens; and ii) Canadian citizens who are also Green Card holders/US permanent residents.

Please also note that the topics covered below require detailed, comprehensive analysis before specific recommendations can be made to an individual client, which is the purpose of creating a cross-border financial plan prior to departure.

As a Canadian citizen living abroad, it’s not uncommon to feel the pull back to your country of citizenship. However, moving back to Canada comes with a few complications.

If you’ve been living abroad as a Canadian citizen and choose to move back home to Canada, there are several steps that you’ll have to take before you can resume your “normal” life as a Canadian resident. Even if you are a Canadian citizen, you will still have to prove that you have returned permanently, and set up resources like banking, healthcare, and more. 

Today, we’ll talk about how Canadian citizens can move back to Canada after an extended absence, and what they’ll need to do to ensure that their move and resettlement process is a success.

The Basics of Repatriation

Moving back to Canada as a Canadian citizen is technically called repatriation. If you are a Canadian citizen, you are entitled to return to Canada at any time to re-establish your residency. However, it may not be so simple if you got married or had children while away, and want them to return to Canada with you. 

If you have a non-Canadian child, spouse, or common-law partner, you will need to apply for sponsorship so they can enter the country legally. If you have questions, you can book a consultation with one of our recommended immigration consultant partners, who can help with your application and correct any errors that may delay its processing.  

Get Your Passport

If you don’t have a Canadian passport, that should be the first step in your repatriation process, and should be done at least a year ahead of your intended move date. The application process is easy and requires some paperwork that will vary depending on if you have proof of Canadian citizenship or not.

Once you arrive in Canada you will receive other forms of ID which are attached to various government services, such as healthcare.

Choosing Your Destination

If you haven’t lived in Canada for a few years, it may surprise you how much things have changed in the places where you used to live. The Consumer Price Index in Canada measures the average change in price by area over time, and it may be a good place to start to see how much inflation has affected each province. From there, you can use your budget and expected career to determine an ideal location to settle.

With the rise of remote work, there’s a lot more flexibility to be away from expensive cities like Vancouver and Toronto. Why not explore some of the fastest-growing regions in Canada, including:

•   Halifax, NS
•   Oshawa, ON
•   Kitchener-Cambridge-Waterloo, ON
•   Kelowna, BC
•   Calgary, AB
•   Saskatoon, SK
•   Ottawa-Gatineau, ON/QC
•   Trois-Rivieres, QC

Finding Accommodation

Finding your ideal accommodation can be a challenge, especially if you’re doing it from abroad. It may be worth renting accommodations initially, or staying in a short-term rental like an Airbnb until you can find a place you love.

In Canada, non-residents are subject to certain rules when purchasing real estate, including a minimum 35% down payment. If that is not doable for you, it may be best to wait to purchase real estate until you’ve established residency in Canada.  

There are lots of resources that can help you find the right place to live. If you are renting, you can scour public listing sites like Craiglist or Kijiji, or a housing-focused site like Padmapper or ViewIt.  

 If you’re looking to buy, start getting a sense of the market by browsing through Zillow Canada or Zoocasa. And, check out our guide on buying your first home in Canada.

Registering for Healthcare Coverage

Even if you were previously registered for Canadian healthcare, you will need to re-register when you repatriate to Canada. In Canada, publicly funded healthcare is administered by each province, and where you live will determine the details of the application process.

Getting healthcare for newcomers to Canada is not complex, but it does typically require an application form, which you’ll need to submit in full along with proof of your Canadian legal status and residency. Depending on where you live, you may need to wait 3 months for your healthcare coverage to activate.   

If you need to wait a few months before your provincial healthcare coverage kicks in, it’s worthwhile to consider purchasing private health insurance while you wait — just in case of emergencies. We recommend starting with a free quote from our trusted insurance partner, Cigna.

Getting a Phone

Despite being such a vast country, Canada has relatively few large telecom companies, as well as several other small regional carriers. The biggest telecom companies in Canada include: 

•   Rogers
•   Bell
•   Telus
•   Shaw
•   Videotron

Within these companies, there may be smaller flanker brands like Koodo, Public Mobile, and Fido. These smaller providers are owned by the same large conglomerates but offer different packages and rates.

 Don’t purchase a new phone plan without reading through our comprehensive guide on how to choose the best phone provider in Canada. When setting up your phone, it may be advantageous to bundle several services together, such as multiple mobile lines, or your TV service and cell service.

Moving2Canada has partnered up with a smaller Canadian cell phone provider, PhoneBox, who offer some of the most affordable plans on the market. Plus, they make it easy for you to sign up and have a SIM card shipped anywhere in the world (for free!). Check out our exclusive deals and get $10 off your first month here.

Organize Your Banking

Like its telecom services, banking in Canada is largely controlled by a few major corporations, known as the Big Five. They are: 

•   Royal Bank of Canada (RBC)
•   Toronto-Dominion (TD) Bank
•   Bank of Nova Scotia (Scotiabank)
•   Bank of Montreal (BMO)
•   The Canadian Imperial Bank of Commerce (CIBC)

In recent years, other international banks have emerged in Canada’s newcomer market, like HSBC. Each of these banks offers a similar level of service, but one may be better than the other for your needs depending on where you live.

When you first arrive back in Canada, you’ll need to set up your banking. Although in recent years some banks have been making efforts to allow new account holders to set up bank accounts while before arriving in Canada

For details on choosing a Canadian bank, check out our guide on banking in Canada. 

Double-Check Other Responsibilities

This is just the beginning of the list of things you’ll need to accomplish once you move back to Canada. Getting a driver’s license, learning how to pay Canadian taxes, getting a credit card, and finding a doctor are all things that should be accomplished within your first months in Canada. 

However, don’t let yourself get overwhelmed! Canada is a friendly and welcoming country, and there are always people available to help.

At Moving2Canada, our goal is to deliver fast and accurate immigration news to newcomers to Canada. Even if you aren’t going through the immigration process, there still may be things you have questions about. Sign up for a free Moving2Canada account to learn more about what you should be doing during your first days, weeks, and months back in Canada.

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