The Fraser Institute

The Fraser Institute

June 10, 2013 06:32 ET

Fraser Institute: Quebecers Celebrate Tax Freedom Day on June 18, Three Days Later Than 2012

MONTREAL, QUEBEC--(Marketwired - June 10, 2013) - Tuesday, June 18 is Tax Freedom Day in Quebec, the day families in La Belle Province have finally earned enough money to pay all the taxes they owe to all levels of government for the year, according to the Fraser Institute's annual calculations.

Tax Freedom Day falls three days later this year than 2012, when it fell on June 15.

"Quebec's government continues its penchant for increasing taxes, most notably this year with a new higher income tax rate on Quebecers earning more than $100,000," said Filip Palda, Fraser Institute senior fellow and professor at the École nationale d'administration publique.

"This higher tax rate is detrimental to the vibrancy of Quebec's economy as it hits professionals such as doctors, lawyers, accountants, engineers, and senior managers - the very types of workers Quebec wants to attract and retain."

The tax increase means Quebecers now face a new combined top marginal tax rate of 49.97 per cent.

Tax Freedom Day is an easy-to-understand measure of the total tax burden imposed on Quebec families by federal, provincial, and local governments. If Quebecers were required to pay all taxes up front, they would have to give governments each and every dollar they earned prior to Tax Freedom Day.

Compared to other provinces, Quebec has the second latest Tax Freedom Day in Canada ahead of only Newfoundland & Labrador where Tax Freedom Day falls on June 22. More troubling for Quebec is that families living in neighbouring Ontario celebrate Tax Freedom Day on June 9, nine full days earlier than Quebec.

Tax Freedom Day varies from province to province, depending on the taxation levels of provincial and local governments. From earliest to latest:

  • Alberta (May 19)
  • British Columbia and Prince Edward Island (June 4)
  • Manitoba and New Brunswick (June 6)
  • Ontario (June 9)
  • Nova Scotia (June 10)
  • Saskatchewan (June 11)
  • Quebec (June 18)
  • Newfoundland & Labrador (June 22)

The later Tax Freedom Day this year is partly due to the improvement in Quebec's economy since the recession. As the economy recovers and incomes increase, a family's tax burden also tends to increase due to Quebec's progressive tax system, which imposes higher taxes as people earn more money. Household consumption also rises, which results in increased sales and other consumption taxes that families pay.

Deficits and Tax Freedom Day

The report also notes that Quebec's Tax Freedom Day would arrive even later, on June 21, had Ottawa attempted to balance its budget this year with additional tax increases to finance current spending.

"While the Quebec government says it will balance the books this year, Quebecers are partly responsible for the federal government's $18.7 billion planned deficit. Today's deficits must one day be paid for by taxes, which does not bode well for an early Tax Freedom Day in the future," Palda said.

Your total tax bill

In 2013, the average Quebec family (consisting of two or more people) will earn $84,498 in income and pay a total of $38,671 in taxes (45.8 per cent of income). The total tax bill for the average Quebec family is slated to increase by $1,340 in 2013 (3.6 per cent growth compared to last year), while incomes grow by just 2.2 per cent.

The taxes used to compute Tax Freedom Day include income taxes; payroll taxes (pension, employment, and health taxes); property taxes; sales taxes; profit taxes; import duties; license fees; taxes on alcohol and tobacco; fuel taxes; hospital taxes; natural resource fees; and a host of other levies.

Quebecers can determine their personal Tax Freedom Day using the Fraser Institute's online calculator.

To calculate average family income, the report considers not just wages and salaries, but also interest, dividends, private and government pension payments, old age pension payments, and other transfers from governments.

Tax Freedom Day calculations are based on forecasts of personal income and federal and provincial budget tax revenue. When final revenue numbers become available at the end of each fiscal year and personal income data are updated by Statistics Canada, we revise our Tax Freedom Day calculations for previous years.

The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of 86 think-tanks. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org.

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