If you rail against “the cursed taxes”, you will be surprised to learn that it is often in Quebec that we have the most money in our pockets after having paid our taxes and social contributions, our child care expenses and our student loan.
Granted, Quebecers pay more taxes than Ontarians, Americans and Brits. But they also have more utilities. Including very low university tuition and daycare costs.
With the help of the Chair in Taxation and Public Finance at the University of Sherbrooke, we did the calculations for two types of Quebec taxpayers: 1) a middle-class family with two parents with a family income of $114,5000 and two children in day care; 2) a single engineer without children with an income of $100,000.
In Quebec, lower child care costs make all the difference for families. In addition, tuition fees are very low in Quebec. To earn a salary in the Quebec average, you must most of the time have a university degree. We have therefore added the cost of a baccalaureate in nursing for one of the two parents, which will be reimbursed over 10 years.
According to our example, the middle-class family with two children in daycare keeps as disposable income (after taxes, childcare costs and student loans) 79% of its income in Quebec, compared to 68% in Ontario, 73% in the United States. United States and 59% in the United Kingdom.
And our single engineer earning $100,000 a year? Counting both taxes and the annual repayment of his student debt (over 10 years), he has as much money in his pocket as an Ontario or British colleague for equivalent salaries in these countries. And he is in a better financial position than an American engineer during this period.
“During the 10 years when the student loan is repaid, Quebecers would have the same portion of wages available for consumption as in Ontario and the United Kingdom,” says Professor Luc Godbout, holder of the Chair in Taxation and Finance public from the University of Sherbrooke.
The net tax burden is income taxes plus social security contributions minus social benefits. No interest was charged for student debt. For the UK, we used City, University of London tuition fees. For the United States, since the average salary is in Michigan, we used the University of Michigan tuition for a Michigan resident. For Ontario, we used the University of Toronto tuition for an Ontario resident.
