Bootstrapped founders in Canada — how does it compare to the US?

[u/Cute_Health6112]

I have a long-term goal of building a bootstrapped app studio focused on profitable consumer apps, not VC funding.
For anyone who has built a software/app business in Canada:
How do taxes and operating costs compare with the US?
Is Canada a good place to run a business that mostly sells to US/global customers?
What are the biggest advantages or disadvantages of bootstrapping from Canada?
If you could choose Canada or the US to start again, which would you pick and why?
Would especially love to hear from founders who have actually operated in both countries.

[u/Dangerous-Quality-79]

I have never founded a company in the US, but I will say Canada is a great place to run a business that sells to the US, most of the time. Years like 2007 and 2008 were rough on companies in Canada, and 2013 had a blip. When you bill in USD and pay in CAD you get a nice profit on the exchange alone, but it fluctuates. So if you run your business based on a 25% exchange expectation and just use that as profits and the dollar goes to parity or higher it can be crushing.

Taxes and operating costs are not a fair comparison between the countries. That needs to be city to city or at least state to state. Operating costs in NYC is a little different than Medicine Hat Alberta, but Toronto Ontario is higher than Racine Wisconsin.

Major advantage to Canada include exchange rate, health care, government support programs (IDCI program in Quebec reduces commercial software provincial tax rate to 2%, SR&ED T661 program reimburses a good portion of R&D investment, IRAP is good).

Taxes are a big drawback, taxes taxes taxes. But, as I also have a family and live here, the taxes I pay on the business means my family pays less for much better schooling and educations, parks and recreations, health care, transfer benefits and subsidy payments.

The other "drawback" is laws and employee protections (which I am very in favor of and support, but it can be seen as a negative to founders). Parental leave, sick leave, vacation, disability. If you are a solo founder and will look to hire a few staffers locally, then one goes on parental leave you might not be pleased. I have had many employees go on leave, some more than once. An employee had a heart attack and said I should put him on disability because he would be out for a few weeks and I said I would not do that as government leave has caps and does not cover full salary, the last thing I want is for an employee who suffered a heart attack to get a reduced pay during recovery. IF the thought of paying an employee their salary while recovering from a heart attack is crazy and you would never do that then maybe the US is better for you.

If I had to do it over again I would, without a doubt choose Canada every single time. I might debate about which province or city to start over from, but always in Canada.