Big tax gap between Quebec and Ontario

Compared to Ontario, the additional tax payable in Quebec remains very high in the taxable income brackets ranging from $35,000 to $115,000.

We are talking here about an additional tax to pay which varies from 18 to 24%.

Want examples?

At $40,000 of taxable income, the Quebecer’s tax bill amounts to $1,077 more than that of Ontarians, or 21.4% more. At $50,000 of taxable income, the gap rises to $1,724 (+24.5%). At $60,000 of taxable income, the additional tax payable in Quebec reaches $2,395, or 24.9% more than in Ontario. Then the gap with Ontario exceeds the $3,000 mark (+24.2%) when you earn a taxable income of $70,000. Etc.

To compare apples to apples, I compared Quebec’s 2024 personal income tax table with that of Ontario. Established by the firm Raymond Chabot Grant Thornton, these tables calculate the federal tax and the provincial tax payable on taxable income. These tables thus take into account basic personal credits and provincial and federal indexation rates. The Quebec tax table also takes into account the 16.5% federal tax abatement.

BUT BETTER THAN BEFORE

Fiscally speaking, notice that things have already been worse between Quebecers and Ontarians. Over the last few years, François Legault’s government has effectively reduced the tax gap between Quebec and Doug Ford’s Ontario by a few percentage points.

For example in 2021, with a modest taxable income of only $30,000, the Quebec taxpayer had to pay 22.8% more tax than their Ontario neighbor, or $775. Today, the gap has narrowed to 14.1%, or $429.

A Quebecer who reported a taxable income of $50,000 in 2021 had to pay 30% more tax (+$2,307) than an Ontarian with the same taxable income. That was 4.5 percentage points higher than today.

Important fact to note: the higher the taxable income, the lower the tax gap between Quebec and Ontario. While the tax gap is 15.7% at $150,000 of taxable income, it drops to just 4.6% at $400,000 of taxable income and barely 1.3% when taxable income reaches the threshold. million dollars.

This shows that the rich taxpayers of Quebec have nothing to envy fiscally of their Ontario cousins.