Clay Jarvis
Beth Buczynski
It’s fair to say that a few of the ideas expressed by Donald Trump over the past decade could be considered unusual.
Even so, the U.S. president may have raised the bar for himself by repeatedly suggesting that Canada become America’s fifty-first state.
Canadians aren’t exactly thrilled with Trump’s proposal. Recent surveys by Leger and the Angus Reid Institute found that the vast majority of Canadians oppose being absorbed by the U.S.
There are plenty of reasons — cultural, political, logical — for rejecting the end of Canada as we know it. But some of the biggest risks we future-former Canadians would face involve our finances.
Healthcare
Since no state in the Union has publicly funded healthcare, Canada would inevitably be robbed of its crown jewel.
Polling finds that most Canadians are dissatisfied with their provincial healthcare systems, but the costs are much lower than what we’d pay as Americans.
It’s not as if healthcare in Canada is free. We pay for it dearly with our income taxes. But out-of-pocket spending is the exception, not the norm. That wouldn’t be the case if we started paying for medical insurance every month.
According to the Centers for Medicare and Medicaid Services, total health expenditures in the U.S. hit $4.9 trillion in 2023, of which private health insurance and out of pocket spending accounted for almost $2 trillion. The Consumer Financial Protection Bureau estimates that 100 million Americans owe over $220 billion in medical debt.
On January 5, 2025, Trump told reporters that Canadians would have “much better health coverage” if Canada were to become a state. Kate Ashford and Alex Rosenberg, who cover Medicare for NerdWallet in the U.S., aren’t so sure.
“It’s possible to have what would be considered ‘great’ insurance here and still spend an arm and a leg (and maybe go bankrupt) if you have a major medical issue,” Ashford says.
“I think folks are probably equipped to process what ‘more expensive’ feels like, but might be less ready for what ‘more complicated’ feels like,” says Rosenberg, referring to the exasperating labyrinth Americans must often navigate to settle their health insurance claims. That stress takes a toll, too.
Retirement
At first glance, swapping the Canada Pension Plan for American Social Security seems like it might benefit Canadians.
In 2025, monthly Social Security payments top out at $4,018 for recipients who retire at full retirement age, which is generally around 67. The maximum monthly benefit for CPP recipients who retire at 65 is $1,433. Add in Old Age Security, which could be worth up to $800 a month, and Canadians still fall behind.
Or do we? American retirees have to pay for medical insurance that may not cover procedures they require. Employees in the U.S. also contribute more to Social Security during their working years than Canadians do. Taken as a whole, it might be a bit of a wash.
But what if the U.S. dedicated our CPP contributions to a different purpose entirely? That’s a possibility, according to Dr. Roslyn Kunin, a Vancouver-based policy and economic consultant and former director of the Business Development Bank of Canada.
“I think any assets Canada has would be immediately usurped to pay for the outstanding debt that Canada has,” Kunin says. “I don’t think we could count on the savings of CPP or any other government assets to be there for the purposes that they were originally intended.”
Julian Karaguesian, a McGill University lecturer with experience in both the Ministry of Finance and the Canadian Embassy in Washington D.C., says the switch might not be so alarming.
Pointing to the co-existence of the Canada and Quebec pension plans, Karaguesian says Canada’s retirement programs might be grandfathered in by the U.S. “until a certain point in time.”
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Taxes
Taxes are another area where Canadians might see some upfront benefits. The GST would be no more, long-term capital gains taxes could potentially shrink and income taxes might have to decrease.
“U.S. states currently are kind of in competition with each other for business investment, for foreign investment,” Karaguesian says. “So I’m assuming [Canada’s] provincial tax rates would probably have to come down.”
Kunin says operating under a U.S. tax regime would benefit lower-income Canadians whose earnings don’t meet the Internal Revenue Service’s taxability threshold.
“For an awful lot of people at the bottom end of the distribution, the tax situation would be better,” she says. “But that would be offset by the loss of social services and medical care.”
Competition and currency
Dissolving the border between the U.S. and Canada would create a greatly expanded consumer marketplace. Canadians would have more choice when it comes to banks, telecoms, retailers and investments, and could see increased competition, more rapid innovation and lower prices.
“Those competitive forces would spread more easily up here than through a free trade agreement,” Karaguesian says. “Our cost of living would converge to the lower cost of living in the United States.”
The other side of the coin, quite literally, would be the potentially negative impact of swapping the loonie for the greenback.
Travelling to and buying items from the States would be easier and less expensive, but Canada would lose the one edge we have when trading with the U.S. and the European Union: a weak dollar that makes our goods less expensive.
“It would make it that much harder for us to export,” Kunin says.
There’s also a concern that companies used to doing business in Canada would fail to compete with more productive U.S. firms. If so, their survival, and the jobs they provide, would eventually be at risk.
“Investment money tends to flow to the more productive areas, where the rates of return are higher,” says Karaguesian.
Many Canadian companies would undoubtedly thrive in this more competitive, less regulated business environment. One could argue that’s exactly what’s needed to drive innovation here.
But at what cost? Becoming the fifty-first state could improve the prospects of hundreds, maybe thousands of businesses, but it would involve sacrificing the average person’s financial well-being and social safety net.
If Canada ever got behind a concept like that, we’d basically be American already.
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