The Canadian Snowbird Visa Act: A Closer Look at Its Implications for Seniors
A recent U.S. legislative proposal, the Canadian Snowbird Visa Act, aims to extend the duration Canadians aged 50 and over can stay in the United States from the current 182 days to 240 days annually. While this extension may seem advantageous for Canadians owning or leasing U.S. residences, it carries significant implications for Canada’s economy, healthcare system, and the seniors who might be most affected.
Canadians have long been substantial contributors to the U.S. economy, particularly in states like Florida, Arizona, and California. In 2023, Canadian visitors spent over 5 billion CDN$ in California alone. An increase in the duration of stays could amplify this spending, diverting funds from the Canadian economy. More time spent abroad means less money spent in Canada – on local goods and services – and less taxes collected. Extended absences mean seniors are less involved in their local communities, contributing less to volunteer activities, local economies, and social networks. Empty homes can lead to neighborhood decline and reduced community engagement. The shift of spending and presence to the U.S. may have long-term effects on the vibrancy and sustainability of Canadian communities.
Canada’s healthcare system, including provincial plans like Ontario’s OHIP, is funded through taxes paid by residents. To maintain OHIP coverage, individuals must be physically present in Ontario for at least 153 days in any 12-month period and make Ontario their principal home. Extended stays in the U.S. could jeopardize this residency requirement, leading to the loss, or at least long gaps, without provincially funded healthcare coverage. Seniors, in particular, may find themselves without access to essential medical services, forced to secure costly private insurance, or may find themselves on the hook for the full cost of care.
Spending more time in the U.S. increases the risk of being considered a U.S. resident for tax purposes. Under the Substantial Presence Test, individuals present in the U.S. for 183 days or more over a three-year period may be subject to U.S. income tax on their worldwide income. This scenario could lead to complex tax obligations and potential double taxation, affecting financial stability during retirement.
While the Canadian Snowbird Visa Act offers certain benefits for those seeking longer stays in warmer climates, it’s crucial to consider the broader implications for both ex-pat snowbirds and those who live the majority of the year in Canada.
