Is Quebec actually the most taxed jurisdiction in North America?

Tax burden in the province is Canada's highest — until you factor in the returns

With the rising cost of living front and centre in the Quebec election campaign, a familiar refrain has emerged: Quebec is the most taxed jurisdiction in North America.

Conservative Party of Quebec Leader Éric Duhaime is leaning on that claim to justify his promise of deep income and corporate tax cuts to help address the cost of living.

"Quebecers face the highest tax burden in North America. It is now the government's turn to tighten its belt,” Duhaime said in a news release last Friday.

He repeated that point during a news conference the same day, saying Quebec is "the worst one" among 60 states and provinces across Canada and the U.S.

But is the claim actually true? We took a closer look.

The short answer is yes — with an asterisk. It depends on what exactly is being measured, according to Luc Godbout, a professor and the research chair in taxation and public finance at the Université de Sherbrooke.

One way to answer this question is through what economists call the "overall tax burden." This involves adding up all taxes paid to federal, provincial and local authorities by individuals and businesses, and then expressing that as a percentage of the gross domestic product (GDP).

By that measure, Quebec does indeed have the highest taxes among all 10 Canadian provinces, sitting at 38.6 per cent of its GDP for 2024, according to an annual study prepared by Godbout and other researchers at the university.

Quebec also has a higher overall tax burden than the United States and Mexico.

As this chart shows, the province's tax burden sits closer to the average of advanced countries in the Organization for Economic Co-operation and Development (OECD).

Another way to measure the tax burden is by analyzing it at the individual level and looking at personal income taxes, social contributions and consumption taxes, Godbout explained to CBC News.

On that front, Quebec’s gross individual tax burden is heavier than all other provinces except one: Nova Scotia, Godbout pointed out.

On the whole, if Nova Scotia's tax system were applied to Quebecers, they would actually pay more.

The picture becomes more nuanced when evaluating what's called the "net tax burden."

This measure takes into account not only what individuals pay in taxes, but also what they get back through refundable tax credits and family allowances paid directly to households.

By this metric, the tax system in Quebec actually results in a lighter burden for individuals than in four of the nine other provinces. Nova Scotia, Prince Edward Island, Newfoundland and Labrador, and New Brunswick all have a higher net tax burden, Godbout pointed out.

For example, a single-parent family earning $56,714 (which is two-thirds of the average wage) in Quebec gets back 12 per cent more in government transfers than they pay in total taxes — the lowest net burden in Canada, according to the annual study.

On the flip side, high-income earners with no children are heavily taxed in the province.

A single person earning $141,362 (which is two-thirds more than the average wage) faces a net tax burden of nearly 35 per cent, the highest in the country.

As the chart below illustrates, Quebec's tax system significantly shrinks the wealth gap.

Before taxes, Quebec's Gini coefficient, which measures inequality, is 0.43, but government transfers drop it to 0.27, leaving the province with some of the lowest income inequality in the country.

Colin Pratte, a researcher at the Institut de recherche et d’informations socioéconomiques (IRIS), argues higher tax collection in Quebec serves as an effective mechanism for wealth redistribution.

He points to the latest numbers from Statistics Canada, that show Ontario’s poverty rate is 50 per cent higher than in Quebec.

“It is actually the main tool for a given government, a given society, to make sure that wealth is well distributed among people of that society,” he said.

So, while Duhaime’s campaign rhetoric rings true for corporations, high-income earners, and childless individuals, Quebec's system of government transfers means lower-income families actually face some of the lightest net tax burdens on the continent.

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