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Posted at 11:00 a.m.
We often hear in the media that 40% of the population does not pay taxes. Is it true ?
Hugues Beauregard
Is it true that 40% of Quebecers do not pay tax? In a word: no. Not quite.
In fact, 35% of Quebecers who filed taxes in 2018 did not pay provincial income tax, according to the latest figures from the Quebec Ministry of Finance, which is based on figures from Revenu Quebec.
To have the real portrait, however, it is necessary to make some adjustments. This proportion of 35% includes all taxpayers who have filed a tax return…regardless of their age. We therefore find in the lot of high school students, CEGEP students or university students who file their tax returns to receive tax credits or accumulate RRSP contribution room. (Teenagers and young adults listening is a good habit to get into.)
If we take only those aged 25 and over—a more representative sample, in our opinion—that’s 31% of taxpayers who do not pay provincial income tax. Conversely, 69% of Quebecers aged 25 and over pay income tax. The rate of Quebecers who pay tax rises drastically from the age of 25, reaches 79% in their forties, and decreases in their early sixties.
(Small problem: for all sorts of reasons, about 3% of Quebec adults do not file a tax return and are therefore not considered taxpayers. We do not know if these 3% of Quebecers pay tax or not. Many probably don’t, but in theory, a tax-paying employee could “forget” to file their tax return and become part of that 3% group.)
Is it only in Quebec that we have about a third of taxpayers who do not pay income tax? No. In Canada (excluding Quebec), there is roughly the same percentage of taxpayers who do not pay income tax (36% of taxpayers in 2017). In Alberta, it’s 39%, in Saskatchewan, 42%.
7.5% of the richest = 46% of taxes
In Quebec, the wealthiest 7.5% of taxpayers, those who earn more than $100,000 a year, pay 45.7% of all provincial income taxes.
But beware, Quebec is not financed solely with income tax. Taxpayers also pay consumption taxes. Quebec offers a solidarity tax credit on the QST for taxpayers with very low incomes.
From $3,098 of taxable consumption, an adult in Quebec pays QST and therefore contributes to the public treasury.
Your question inspired us with another: from what level of income is a Quebecer a “net tax contributor” (he pays more tax and contributions than he receives tax credits on taxes consumption tax, in-work tax bonuses and child tax benefits)?
The Chair in Taxation and Public Finance at the University of Sherbrooke did these calculations for us, counting both the federal and the provincial.
Result: a single person is a “net tax contributor” as soon as he earns $21,833 per year as an employee. For a single-parent family with one child between the ages of 6 and 16, the income threshold to become a “net tax contributor” is $40,171 per year. For a couple with two children aged 6 to 16 (both members of the couple earn the same income): the couple becomes a “net tax contributor” from an income of $30,473 per year per member of the couple.
You are probably not taught anything when you are told that Quebec is one of the OECD states where personal income tax is the heaviest. In this regard, Quebec ranks 3e rank out of 39 states, according to a compilation by the Chair in Taxation and Public Finance. Including all types of taxes and duties, Quebec’s tax system is 9e rank of the heaviest.
Even if 31% of Quebecers aged 25 and over do not pay provincial income tax.