Provincial Tax Comparison: Where in Canada Has the Lowest Tax?

Canada’s federal income tax is the same for everyone, but provincial and territorial tax rates vary dramatically. A resident of Alberta keeps significantly more of a $150,000 income than a resident of Nova Scotia. This comparison covers all 13 provinces and territories at two key income levels: $75,000 and $150,000.

How Provincial Tax Works

Every Canadian pays both federal tax and provincial (or territorial) tax based on their province of residence on December 31 of the tax year. Quebec has a unique arrangement — residents also file a separate provincial return with Revenu Québec and receive a federal abatement.

Provincial tax is calculated on the same taxable income as federal tax. Each province sets its own:

• Tax brackets and rates
• Basic personal amount (BPA)
• Tax credits (surtaxes, health levies, etc.)

Combined Federal + Provincial Tax: $75,000 Income (2025)

These estimates include federal and provincial income tax. They exclude CPP, EI, and provincial surtaxes where applicable.

Note: Quebec figures include the 16.5% federal abatement — federal tax is lower in Quebec but provincial tax is higher. Figures are estimates; individual circumstances vary.

Combined Federal + Provincial Tax: $150,000 Income (2025)

Note that the middle column is each province’s top-of-scale combined marginal rate — the rate on the last dollar of a very high income, not the rate a $150,000 earner pays. Only Quebec and Nova Scotia have reached their top bracket by $150,000.

Marginal rates are approximate combined federal + provincial rates at mid-$150k income. Use the Income Tax Calculator for your precise figures.

The Alberta Advantage

Alberta has no provincial sales tax (PST) and relatively low income tax rates. For 2025, Alberta added a new 8% bracket on the first $60,000 of income (a genuine rate cut, not just indexation), then 10% up to $151,234, before climbing through 12%, 13%, and 14% to a top rate of 15% above $362,961. At $150,000 income, an Albertan pays roughly $7,000–$9,500 less in provincial income tax than a Nova Scotian or Newfoundlander at the same income — and slightly more again after the 2025 rate cut.

The after-tax benefit of living in Alberta vs high-tax provinces:

Quebec: High Provincial Tax, Unique Benefits

Quebec has the highest combined marginal rates for middle and upper earners, but residents receive:

• Heavily subsidized childcare ($11.05/day in 2025 for regulated spaces)
• Lower post-secondary tuition than other provinces
• The Quebec Parental Insurance Plan (QPIP) — more generous than federal EI parental benefits
• Provincial drug insurance program (RAMQ)
• Distinct tax filing (T1 + TP-1 provincial return)

For families with young children, the childcare savings alone can offset a substantial portion of the higher tax burden.

Ontario Surtax

Ontario applies a provincial surtax on top of basic provincial tax for high earners, and the two tiers stack: 20% of Ontario tax above $5,710, plus a further 36% of Ontario tax above $7,307 — 56% in total at the top. That turns Ontario’s headline 13.16% top bracket into an effective 20.53% provincially, so Ontario’s true top combined marginal rate is about 53.53%, not the ~46% the bracket table alone suggests. It is the single reason Ontario’s headline rates understate what high earners actually pay there.

The Territories: Low Provincial Rates, High Cost of Living

The Northwest Territories, Yukon, and Nunavut have relatively low territorial income tax rates. However, these savings are often more than offset by the significantly higher cost of living in remote communities, including food, housing, fuel, and goods transportation.

Key Credits That Vary by Province

Beyond the basic rates, these provincial credits significantly affect actual tax paid:

Should You Move Provinces to Save on Tax?

The savings are real — an Ontario resident at $150,000 would save roughly $3,400 per year by living in Alberta instead. But tax is just one factor:

Consider before relocating:

• Housing costs (Alberta, particularly Calgary and Edmonton, remain lower than Ontario/BC)
• Employment opportunities in your field
• Cost of living (groceries, transportation, climate-related costs)
• Healthcare wait times and access
• Family proximity and lifestyle preferences
• Provincial benefits (subsidized childcare in Quebec)

Tax residency rules: Your province of residence is determined on December 31 of the tax year. If you move from Ontario to Alberta and are an Alberta resident on December 31, 2025, you pay Alberta provincial rates for all of 2025 — even if you only moved in November. This creates planning opportunities for high earners who relocate mid-year with a large gain.

Bottom Line

Alberta, BC, and the territories offer the lowest combined rates, particularly at higher incomes. Ontario falls in the middle. Nova Scotia, Quebec, and PEI have the highest combined rates for $150,000+ earners. Before making any relocation decision primarily for tax reasons, model the complete financial picture — including housing costs, cost of living, and available provincial programs. Use our Income Tax Calculator to compare your take-home pay across provinces.