Do Canadians really believe their province has the highest tax burden and tax discrepancies? Let’s take a closer look at the results of a recent survey we conducted.
Tax Discrepancies: Comparing Provincial Taxes in Canada: Who Pays the Most?
When it comes to income taxes in Canada, two factors come into play: the amount of income earned and the province of residence. A recent analysis reveals interesting insights about the varying tax burdens across provinces. Let’s delve deeper into the findings to determine which province pays the highest taxes.
Provincial Tax Brackets:
In Canada, income tax brackets ensure that higher earners pay a greater percentage of their income compared to those with lower incomes. The federal income tax brackets for 2019 were structured as follows:
- 15% on the first $47,630 of taxable income,
- 20.5% on the next $47,629 of taxable income,
- 26% on the next $52,408 of taxable income,
- 29% on the next $62,704 of taxable income,
- 33% on taxable income exceeding $210,371.
Tax Burden by Province:
In addition to federal taxes, each province and territory in Canada imposes its own tax rates, resulting in varying tax burdens across the country. Let’s examine the tax payments for an individual with a taxable income of $65,000 in different provinces in 2019:
-
Quebec:
- 15% for income up to $43,790,
- 20% for income between $43,790 and $87,575,
- 24% for income between $87,575 and $106,555,
- 25.75% for income exceeding $106,555.
Total taxes paid: $10,801.50.
-
Nunavut:
- 4% for income up to $45,414,
- 7% for income between $45,414 and $90,829,
- 9% for income between $90,829 and $147,667,
- 11.5% for income exceeding $147,667.
Total taxes paid: $3,187.58.
- Other Provinces: The tax payments for other provinces are as follows:
- Newfoundland and Labrador: $7,244.72
- Prince Edward Island: $7,690.64
- Nova Scotia: $7,993.90
- New Brunswick: $7,443.76
- Ontario: $4,147.35
- Manitoba: $7,650.43
- Saskatchewan: $7,220.49
- Alberta: $6,500.00
- British Columbia: $3,930.33
- Yukon: $4,611.62
- Northwest Territories: $4,425.29.
Conclusion:
Based on the tax rates and a taxable income of $65,000, Quebec residents face the highest tax burden among all provinces, while Nunavut residents have the lowest. However, it’s worth noting that Quebec residents pay relatively less in federal taxes compared to residents of other provinces, thanks to a 16.5% abatement.
