Comparison of tax differences between Quebec and Ontario

The Canadian tax landscape is complex and varies considerably from province to province. In this article, we will explore the tax differences between Quebec and Ontario. While they share a common history and culture, their tax systems are distinct. Understanding these differences is essential for residents, entrepreneurs, and investors wishing to effectively navigate these tax environments.

Income taxes

One of the most striking aspects of the Quebec and Ontario tax systems is their income tax structure.

Tax rate

Quebec has its own tax system, administered by Revenu Québec , while Ontario is managed by the Canada Revenue Agency (CRA) .

In Quebec, provincial tax rates are generally higher, but social services and government programs are also more developed (subsidized daycares, family tax credits, etc.).

Currently, for the 2023 tax year, the top marginal rate in Quebec is 53.31%, while in Ontario it is slightly higher at 53.53%. While the rates are similar, the way the tax brackets are applied can influence the total tax amount.

In 2025, Quebec tax rates range from 14% to 25.75%, depending on income. In Ontario, they range from 5.05% to 13.16%, but are in addition to federal taxes. For example, a person earning $100,000 in Quebec could pay about $24,000 in taxes, while in Ontario, they would pay about $22,000.

Result: the overall tax burden is often a little heavier in Quebec, but it is offset by certain social benefits.

Tax credits

Quebec offers unique tax credits. The solidarity tax credit, for example, helps low-income households offset the cost of living. Households earning less than $18,000 per year can receive up to $1,000; the childcare expense tax credit; and special programs to encourage local purchasing and energy-efficient renovations.

In Ontario, however, credits are more limited, but there are, for example, the Trillium Benefit, which combines several provincial subsidies for housing and energy costs. Tax credits such as the Seniors Tax Credit, aim to reduce the tax burden for seniors by providing an amount of up to $1,100.

Sales tax

Sales tax is another major difference between Quebec and Ontario.

Sales tax rate

Quebec applies the Quebec Sales Tax (QST), currently set at 9.975%. Ontario, on the other hand, imposes a harmonized sales tax (HST) of 13%. Although the overall HST rate is higher, the QST is often applied to more goods and services. In 2022, 72% of products sold in Quebec were subject to the QST, while in Ontario, this figure was 68%.

Exemptions and refunds

Both provinces offer exemptions. Food products and health services are often exempt from sales tax in Quebec, while in Ontario, each category may have separate eligibility criteria. For example, prescription drugs are 100% exempt from HST in Ontario.

Property taxes

Property taxes are another area where differences are notable.

Tax rate

In general, property tax rates in Quebec are lower than those in Ontario, making home buying more attractive. For a resident of the Montreal area, the average property tax rate is 0.8%, while in Toronto it can be as high as 1.2%. This translates into savings for homeowners, especially considering the average price of a home, which is around $700,000 in Montreal compared to $1.1 million in Toronto.

Use of income

Property tax revenues are used to fund municipal services such as education, infrastructure, and healthcare. In Montreal, 45% of these funds are allocated to schools, while in Toronto, approximately 50% are dedicated to infrastructure improvements.

Social security contributions and schemes

In Quebec, workers contribute to the Quebec Pension Plan (QPP) , which is separate from the Canada Pension Plan (CPP) used in Ontario.

In addition, Quebec has its own parental insurance plan (RAP) , which is more generous than the federal plan, which is a significant advantage for young families.

Corporate taxes

Businesses must navigate different tax systems depending on their province.

Corporate tax rates

The corporate tax rate in Quebec is set at 11.5%. In Ontario, small businesses benefit from a rate of 11.5%, while large businesses are subject to a rate of 26.5%. Thus, small businesses in Quebec can take advantage of a tax break that stimulates local entrepreneurship.

Tax incentives

Provinces seek to attract businesses with various tax incentives. Quebec is known for its generous research and development tax credits, which can represent up to 30% of eligible expenses. In contrast, Ontario offers innovation-focused support programs, such as the Ontario Innovation Tax Credit, to encourage investment in technology.

Summary of tax differences

The tax differences between Quebec and Ontario are considerable and can significantly impact the daily lives of residents, businesses, and investors. Whether it's income tax, sales tax, property tax, or corporate tax, each province has its own rules and regulations.

For those considering a move or investment, it's essential to understand these tax differences. Proper tax planning can minimize taxes while maximizing financial benefits. In short, a thorough understanding of the Quebec and Ontario tax systems can make all the difference in your long-term financial success.

Always consult a tax specialist to assess your personal situation and get the most out of the programs offered.

At www.dianaparadachacon.com , our team of specialists can help you make the best financial decision for your situation and take full advantage of the tax benefits offered in the province of your choice.

Whether you live in Quebec or Ontario, we help you optimize your taxes, credits and government programs, so that every dollar counts.