What the average family earns in Quebec

What is the income of a family with two children, according to you? After tax. In other words, what is the net family income of the middle class in Quebec?

This question is often asked to me by readers. I was therefore intrigued to see the answer in the report from the Institute of Statistics of Quebec (ISQ), published at the end of February. Especially since this survey allows us to compare the situation of families in different regions and to see the evolution of their standard of living over time, once the effects of inflation are taken into account.^⁠1.

So, this middle class couple with two children? What does he earn, $75,000, $100,000, after taxes and transfers?

Well no, the median income of couples with two children reached $119,820 in Quebec, after taxes and transfers. Not bad is not it ?

Surprise, the region at the top is not Laval or Quebec, but the North Shore. And not far behind, Abitibi-Témiscamingue and Saguenay–Lac-Saint-Jean.

How much ? Wait, wait. Before the details, it must be said this. The most recent ISQ data dates from 2021, and it should probably be increased by a few percentage points, since salaries have increased faster than inflation for two years.

Furthermore, the ISQ uses median income, which is the midpoint between those who earn more and those who earn less. This indicator is considered more representative than the average, influenced by the extremes.

According to the ISQ, therefore, couples with two children on the North Shore have $137,920 to live on after taxes and transfers. That’s more than $18,000 above the Quebec average, or 15%. This gap is probably explained by the presence of certain large industries in the region, with high salaries, such as Alcoa and Rio Tinto.

Same observation in Saguenay–Lac-Saint-Jean, where the median couple with two children pockets $122,530.

At the other end of the spectrum, I was surprised to see the regions of Montreal and Estrie, where this median family has less than $113,000, less than that of Gaspésie. Probably the effect of taxpayers with lower incomes (students, newcomers, etc.).

Consolation for Montreal, it is the place which has recorded the highest increase in income for 10 years among the regions of Quebec.

Now, how much has the standard of living increased over the last 10 years for these couples with two children? The ISQ publishes its data in constant dollars for each year, that is to say after removing inflation, so that the increase in these incomes is similar to the improvement in the standard of living.

Some will be surprised to learn that the Quebec couple with two children had almost 26% more income in 2021 than in 2011. And inflation has been subtracted, did I say that?

Montreal is the place that recorded the largest increase in 10 years, as I mentioned above, at almost 35%. The tail of the pack is occupied by Outaouais (+ 21%).

Another observation: by breaking down the analysis according to the type of family, we can see that it is single-parent families with three or more children whose income has increased the most (+ 42%, to $62,760), probably due to more generous government programs.

Government transfers included in “after-tax income and transfers” include child allowance, employment insurance income and GST and QST credits, among others. Those for COVID-19 are also there, but they were significantly less important than in 2020.

Quebec is all well and good, but what about elsewhere? Basically, the couple with two children from Quebec, at almost $120,000, arrives at 6^e rank in Canada. This is only 5% behind Ontario ($125,570), as of 2^e rank, and it’s always after taxes and transfers^⁠2.

Okay, but tax, exactly? Much less than we imagine. People think they pay more than 50% tax, but they forget that this high tax rate only targets their highest income bracket and not their entire income.

In Quebec, in 2024, only the income bracket exceeding $173,205 is subject to a tax rate of 49.97% or more^⁠3. In addition, the benefits that the government pays to families, among other things, lower the net tax rate, all things considered.

On average, therefore, the median BEFORE tax income of Quebec couples with two children was $143,190 in 2021, according to Statistics Canada. Compared to AFTER-tax income of $119,440, we deduce an average government levy of 16.6%. ^⁠4.

Newfoundland and Labrador and Nova Scotia have the highest rate, at 18.1%. And, lo and behold, Quebec is at 5^e rank (16.6%), only a hair and a half ahead of Alberta (16.2%). Ontario is at 16%.

Note, however, that the Quebec situation is less favorable for couples without children. Certainly, their tax rate is lower than that of couples with children, for the simple reason that their income after tax and transfers is lower ($81,100 in Quebec). But their levy rate in Quebec, of 13.1%, is the 2^e in Canada. It compares to rates of 10.4% in British Columbia and 11.5% in Ontario.

Many figures, as you see, but instructive…

1. Consult the website of the Institute of Statistics of Quebec

2. Data for the Canadian comparison come directly from Statistics Canada. They differ slightly from those of the ISQ, but the difference is negligible at this level of aggregation.

3. The marginal rate is more precisely 49.97% for the income bracket between $173,205 and $246,752 and 53.31% for the portion of income above $246,752.

4. This levy does not include contributions to retirement plans, in particular, nor sales taxes, of course.