Here’s how much more people in Ontario are taxed than other provinces and U.S. states

As we reach the halfway point of Canada’s limited GST holiday, residents may be realizing how much taxes add on to the cost of basic necessitities, and questioning the levies we all pay to the city, province and country out of our hard earned money.

One recent report really puts these amounts into perspective by comparing what residents of the Great White North pay in income and sales taxes alone at the provincial and federal level with our neighbours to the south.

For Ontarians, the data, sourced by Toronto-based information services firm WOWA, may be hard to swallow.

Assessing personal income and sales taxes in particular across the largest Canadian provinces and U.S. states, the study reveals the immense disparity between not only the two nations, but between parts of Canada.

At the top of the list is Quebec, with an estimated effective tax rate — again, only taking income and sales taxes into account — of 40.55 per cent. 

Ontario is second on the list, with a rate of 35.66 per cent, which is far more if you earn an amount over a certain threshold. (For those taking in $100k USD or more per year, average income tax ends up being 30.52 per cent; for those earning $200k USD and over, it is 42.77 per cent.)

Of large states, Minnesota has the highest income taxes, which pale in comparison to ours at just 28.18 per cent. Florida has the lowest, at 22.84 per cent (only 25.45 per cent for residents with salaries of $200k USD or more).

Then there is the sales tax, which is 13 per cent in Ontario, compared to just 5 per cent in somewhere like Alberta. For most states on the list, this number is in the 4 to 7 per cent range. In Oregon — where the estimated effective taxes combined is aroun d 28.07 per cent for most of the population — it is zero.

Of course, things like our provinces’ free healthcare must be taken into account, and were noted by WOWA’s founder in sharing the information on X this week.

However, Ontario’s medical system is notoriously plagued with hospital wait times, deadly medical testing backlogs, emergency room closures, a dearth of family doctors and a lack of coverage for medication, dental, and other necessary aspects of care.

While the poster acknowledged in subsequent posts that health coverage can indeed cost more than $10k a person annually in the U.S., he writes that “a significant portion (70 per cent – 85 per cent) of health insurance premiums in the U.S. is often covered by employers. Additionally, subsidies are available for low-income individuals under the Affordable Care Act (ACA).”

He also notes that “typical health insurance in the U.S. provides greater flexibility, faster access to specialized care, and broader options compared to the Canadian healthcare system.”

Many also brought up things like insurance rates and property taxes in responses to the data, the latter of which are yet again about to rise in Toronto amid an extended cost of living crisis, but are pricier in much of the U.S.

Then again, if you can get a mansion in many American cities for the same price as a shoebox in Toronto, perhaps the taxes are worth it. Some might ague that the same can be said for the fees paid for medical care in states where the cost of living, including income and sales taxes, are far lower than here.