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ERI profiles costs and salaries for Canadian residents, using Canadian market prices for US national average spending patterns (home size, goods and services spending patterns) and Canadian effective income tax estimates, which vary significantly from the US.

 

The Canadian Benchmark earning and spending levels are not simply converted US dollars benchmarks.  Because consumer inflation rates, currency exchange rates and local pay rates are not statistically related, all Canadian costs and salaries are stored in ERI databases in Canadian dollars. The quarterly effective exchange rate will change each quarter and influence the appearance of international comparisons from quarter to quarter (in addition to the influence of the inclusion of new survey data, trending to a new quarterly effective date and new US national average to Canadian national average relationships).

 

Because Canadian provinces and industries value jobs differently than their US counterparts, and expenditure patterns and costs also vary from US patterns, ERI has added numerous Canadian sources for both wage/salary and cost-of-living calculations.

 

The data for Canadian cities are those costs and wage/salary levels that an employee could assume to face either after moving within Canada or after moving from the United States and becoming a temporary Canadian resident.

 

In general, cost-of-living methodology assumptions which ERI utilizes for the US in terms of proportion of after tax dollars spent on consumables and housing, along with the higher Canadian tax structure, leads to a universal trend of higher cost-of-living for all Canadians and lower relative salaries for Canadian higher earners.

 

A slight change to the exchange rate can significantly affect the apparent relationships of international comparisons from quarter to quarter.  All US area data is collected and stored by ERI in US dollars, and all Canadian area data is stored in Canadian dollars.  In addition to the separate changes in the respective country's costs, the exchange rate may further serve to increase or decrease international area differentials.