With a weight tax of 38.6% of its GDP, Québec ranks 12th in comparison to the 36 member countries of the Organization of economic cooperation and development.
January 9, 2020 20: 15
Quebecers ‘ tax burden continues to increase
Despite the tax cuts of the past few years, the tax burden continues to weigh a little heavier on the shoulders of the Québécois.
From 2017 to 2018, the burden of quebec taxpayers rose by 38.2 % to 38.6 % of gross domestic product (GDP) of the province. Measure continual increase since a decade, since the recession of 2008 and its low of 36.2 %. The weight of 2018 is the more burdensome since the peak of 40.2 % in 2000 and similar to that of 2001.
“At the same date last year, I would have said that the tax burden in Québec would fall [for next year]. But this is not what happened,” says the professor and researcher Luc Godbout, in telephone interview to the Sun.
Thursday evening, Mr. Godbout and his team of the research Chair in taxation and public finance from the University of Sherbrooke have launched their review of the taxation in Québec – Edition 2020, at the Longueuil campus of the UdeS. A tradition of the beginning of the year.
The results disclosed are based on the tax year of 2018. And then, have nothing to do with the Coalition government Aaenir Québec (CAQ) in place since October 1, 2018. “Our analysis focuses on the year in which the liberals have left the power. There is a difference with the first budget of the CAQ [march 2019], which measure the real impacts on the Balance sheet next year,” says Godbout.
Waiting to see if the government of François Legault is going to actually “put money back into the portfolio of Quebec”, as likes to repeat the prime minister, the minister of Finance, Eric Girard, was the keynote speaker for the presentation on Thursday evening.
Value in return
The tax system includes all taxes, fees and social contributions. Basically, the levies of the various governments without an immediate return to the taxpayers. In 2018, this amount totaled $ 169,41 billion $ collected in Québec by the general government as a whole, of which 49 per cent at the provincial level, 32 % federal, 9 % in the city and 9 % for the plans ‘ annuities and pension.
An increase in the tax burden means that these revenues are increasing faster than the GDP.
But this is not necessarily negative, ensures that the teacher Godbout, who has chaired in 2014 the Committee of review on taxation in quebec. “It means that the economy is going well, that the companies make more profits and pay more taxes,” he says.
“Once paid to the safety of the State, the levies do not disappear from the economic circuit. The consideration of goods and public services provided by the State and funded by tax revenues does not appear in the determination of the rate of tax pressure”, rightly points out the report.
The tax burden in québec is the highest among canadian provinces since 1982 and is more comparable to that of some european countries are also more generous in their public services.
United states and Trump
“It is clear that, even if there has been, from 2016 a number of tax reductions in Québec in recent years, the ratio of pressure from the Quebec tax does not diminish”, one reads in the Balance sheet.
With a weight tax of 38.6% of its GDP, Québec ranks 12th in comparison to the 36 member countries of the Organization of economic cooperation and development (OECD), the charts dominated by France (46.1 per cent), and concludes by Mexico (16.1 per cent).
Quebec it inserts between Greece (38.7 per cent) and Germany (38.2 per cent), ahead of Canada as a whole (33.4 percent, 21st out of 36) and the United States (24,3 %, 33rd). Without Quebec, Canada would slide in 24th position (32.2 per cent).
From 2017 to 2018, the tax burden has declined in 15 of the 36 countries of the OECD. The largest decrease occurred in our neighbours to the south, the United States, with a decrease of 2.5 percentage points, from 26.8 to 24.3 %. Testimony of the tax reform implemented by the president, Donald Trump, said Mr. Godbout.
Korea is in the lead with 1.5 of increase, while Quebec, with a 0.4 increase over the past year, would come 16th.
The study shows that the québec taxation reduces inequalities. It remains that the 1 % of the highest paid employees in Quebec, those who earn 220 $ 100 or more per year, accounted for 10.1 % of revenues and pay nearly 18.8% of the taxes. In the United States, it is the double : the 1 % will be awarded to 21.4% of income and pays 38.5 percent of the taxes.
At the other end of the spectrum to the economy, in 2016, more than 70% of quebec taxpayers declared a total income below $ 50,000. The previous year, in 2015, 70 % of the income taxes in Quebec have been paid by 20 % of the richest taxpayers, who are earning more than half of total revenues. The proportion of taxpayers who do not pay provincial income tax in Quebec was 35.9 %, in 2015.