In earlier research focusing on the 1980s and early 1990s, Hunt and Mueller (2004) found that US states have wider returns to skill than Canadian provinces. This favoured the migration of higher-skilled Canadians to the US. In this study, we extend this analysis to include average tax incidence for each income decile in each of the potential areas to which migration occurs as well as per capita expenditures on various public services. We use an expanded observational base of microdata from the US and Canadian censuses of 2000/2001. By being able to identify highly skilled individuals, through the use of this model, we perform simulations regarding the types of economic and non-economic variables that motivate individuals to migrate both within their home country and between countries, as well as the magnitude of these migrations. We find that individuals with lower skills, Canadian nativity (especially French speakers), and age are all negatively related to the propensity to migrate. Amongst those who do migrate, an area with higher mean returns to skill, higher employment growth rates, moderate climates, and geographical proximity to the migrant’s area of origin increase the probability of migration to these areas. The simulations suggest that increasing after-tax returns to skill and fiscal equalization (reducing both average taxes to their average US level as well as expenditures to maintain a balanced budget) would be the most effective policies in reducing southward migration, especially amongst the highly skilled.