Pontiac Perspective by Peter Gauthier
With the start of a new year, it’s time to reflect on the past year and look
Pontiac Perspective by Peter Gauthier
With the start of a new year, it’s time to reflect on the past year and look
forward to 2019. It’s also the time to start preparing for your income tax returns. Most Canadians file one tax return for the federal government with an attached sheet for provincial taxes. But, residents of Québec have the privilege of filing a separate income tax return to the province and paying the most income taxes.
Many middle-class people filing tax returns will have a taxable income of around $40,000. The federal tax rate on this is 15%. Each province has its separate incremental tax rates, but for a taxable income of $40,000, the rates for each province and territory is: Newfoundland, 9.15%; Prince Edward Island, 10.6%; Nova Scotia, 10.4%; New Brunswick, 9.68%; Quebec, 15%; Ontario,
5.05%; Manitoba, 11.2%: Saskatchewan, 10.5%; Alberta, 10%; British Columbia, 5.1%; Yukon, 6.4%; Northwest Territories, 5.9%; and Nunavut, 4%.
The obvious question is: why are Québec income taxes so much higher than other provinces? Provincial responsibilities and services like education, health care, roads, etc. are fairly uniform across Canada, but, beside the fact that Québec collects its own income tax, there is one immediate difference between this province and the others: the size of the bureaucracy. For other provinces, the provincial civil service is about 5% of their labour force. However, for Québec, it nears 12%, more than double that of any other province!
Many Québecers hope the recently elected CAQ government will reduce personal income tax to bring Québec rates more in line with those of the other provinces as a New Year’s resolution. A good place to start is a detailed review of the size of its civil service which will not only reduce the costs to the tax payer, but could result in more efficient civil administration. Without some action on these issues, the Québec government could be faced with a tax revolt or a mass exodus of its middle-class citizens – or most likely both!
Looking for a prosperous new year, best wishes!
