Squeezed like lemons

Do you know why the Minister of Finance Eric Girard does not intend to resort to tax increases to eventually rebalance the finances of the Government of Quebec, which are in the hole this year of $ 15 billion because of the crisis? health and the resulting economic crisis?

He gives three reasons. One, Quebeckers are the most taxed in Canada. Two, businesses are subject to the highest payroll taxes in the country. Three is Quebec, which, of all the provinces, is the fastest on the trigger when it comes to collecting payroll taxes, such as employment insurance, parental insurance and contributions to the Régie des rentes du Québec.

Great good for us!

Statistics Canada has just published data this week which proves beyond any doubt that Quebecers are taxed like lemons by provincial public administrations, which includes the Quebec government, municipalities, school boards and other public institutions.

It is we, in Quebec, who are subject to the greatest “fiscal pressure” of all the provinces, which “fiscal pressure, explains StatCan, measures the taxes and social contributions (compulsory transfers) that public administrations impose on individuals, businesses and non-residents, expressed as a percentage of GDP. “

Quebec dominates all the provinces with a “fiscal pressure” reaching 21.5% of Quebec’s GDP.

Quebec’s GDP amounted to $ 460 billion in 2019, which means that we would have paid Quebec some $ 99 billion in taxes, levies and contributions.

Compared to Ontario, our great fiscal and economic rival in the country, Quebec does poorly. The tax burden in Ontario is 16.8% of GDP, or 4.7 percentage points lower than here.

This is a huge tax gap. If Quebec exerted the same level of fiscal pressure as in Ontario, all Quebecers (individuals and businesses) would save $ 21.6 billion.

All that remains is to hope that this huge tax grab gap will provide us with more (and better) public services than in Ontario.

One day, an objective study would have to come to demonstrate this. Until then, let’s keep our fingers crossed!

If this can console you, know that 21.5% of Quebec’s GDP is the “lowest” rate of tax pressure since 2011, when it was 21.3%. In 2015, under the former Couillard government, the tax pressure reached 22.3%. And in 2018: 21.8%.

Federal puncture

We must not forget that to this “provincial fiscal pressure” are added the taxes that we pay to the federal government. The “fiscal pressure” of the federal public administration amounts to 14.1% of GDP.

For us Quebeckers, this means that we are paying the federal government some $ 65 billion in taxes.

Number 1

The total tax bill for Quebecers thus reached $ 164 billion in 2019, i.e. $ 99 billion at the provincial level and $ 65 billion at the federal level).

This represents 35.6% of Quebec’s GDP. This is 5.2 percentage points more than in all Canadian provinces and territories.

Wicked gap in “favor” of the Belle Province, champion of the tax pressure!

A title that has stuck with us for a long time.

The Minister of Finance of the Legault government, Eric Girard, may well say that he will not increase taxes, we agree that this “promise” is in reality only valid for the next two fiscal years since there will be a provincial election in October 2022.

And who says that municipalities, because of the financial consequences of COVID-19, will not be forced to increase their taxes to balance their budgets, an obligation to respect.

Federal increase after the election?

Precisely because of the health crisis that we have been going through since last March, it is the federal government which, of all public administrations, ultimately finds itself in financial trouble.

By wanting to financially save workers and businesses victims of COVID-19, Justin Trudeau has implemented a vast economic intervention plan of $ 228 billion.

With this costly rescue plan and the sharp reduction in income from taxes and levies due to the economic crisis linked to the pandemic, the federal government will find itself at the end of this fiscal year grappling with a huge deficit of 343 billion $.

This deficit is 13.7 times higher than the deficit expected before the outbreak of the coronavirus pandemic.

As a minority government, the Trudeau government is certainly not going to raise taxes in the next federal budget. Simple question of not alienating the population before the next federal election.

But the day after the said elections, it’s a safe bet that the next federal government (Justin Trudeau or Erin O’Toole) has in store for us a tax hike in order to one day find a balanced budget. .

Obviously, do not count on the Liberals and Conservatives to tell you this during the next election campaign.

Patience is the surprise they have in store for us the day after the elections!

Tax pressure in Quebec

Year % of Provincial GDP Amount $ Provincial % of Federal GDP Federal $ Amount Totax
2011 21.3% $ 77.5 billion 12.9% $ 44.6 billion $ 122.1 billion
2015 22.3% $ 86.4 billion 13.7% $ 53.1 billion $ 139.5 billion
2018 21.8% $ 96.2 billion 14.2% $ 62.7 billion $ 158.9 billion
2019 21.5% $ 99.0 billion 14.1% $ 64.9 billion $ 163.9 billion


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