The top 20 percent of income-earning families living in Canada’s four most populous provinces pay the majority of total taxes levied by all levels of government, despite many Canadians’ misperception that the rich don’t pay their fair share, according to a Fraser Institute study published this week. The researchers behind the paper—“Measuring Provincial Tax Progressivity in Canada”—found top-earning households in Ontario pay the lion’s share, 58 percent of all taxes, compared to the rest of Ontarians.
The highest-earning families in B.C., Alberta, and Quebec also contributed a disproportionately high amount of the overall taxes due to the progressive tax system: 57, 57.1, and 55.5 percent, respectively. The research determined that 20 percent of the highest-earning families included any household with an overall income of $261,000 or more.
“There’s been a lot of discussion by policy makers for a long time now about fair share of taxes, but there’s rarely ever a discussion about the data surrounding how much different income groups in Canada are actually paying,” one of the paper’s authors and Fraser Institute director of fiscal studies Jake Fuss told The Hub. “Politicians rarely actually define what they mean by a fair share.”
Politicians, such as former prime minister Justin Trudeau and much of the NDP, have long claimed wealthy Canadians don’t pay their fair share of taxes. Now, filmmaker and prominent NDP leadership candidate Avi Lewis is calling for a wealth tax.
“The money is there. We need a government with the courage to go and get it for all of us,” Lewis said in a speech launching his leadership campaign.
The Fraser Institute study notes the high tax burden on top-earners in Canada’s most populous provinces makes them “less attractive places to live and work for highly skilled people.”
The study was released just after The Globe and Mail reported tech founders and talent are fleeing Canada for business-friendly locations with better tax rates. Deteriorating quality of life in Canada has led to record numbers of Canadians leaving for America in recent years. Statistics Canada recorded an uptick in the number of Canadians emigrating from Canada in the last three years, too, with 118,409 people leaving the country in 2024 alone.
“High-income earners are [highly sensitive] to taxes, more so than other income earners across the spectrum,” Fuss explained. “Scientists, doctors, engineers, those types of workers in particular, are quite sensitive to higher tax rates and are more willing to relocate because of those tax decisions.”
Economics literature shows evidence that higher taxes spur top earners to seek other locations to call home.
“If you’re a high-income earner, you’re more likely to have accountants and lawyers involved in the planning for your estate and for tax purposes,” Fuss said. “Top talent is very, very sensitive to those tax rates, when they’re considering where to live, where to work.”
A 2023 poll, conducted by the Fraser Institute and Leger Marketing, looked at Canadians’ perceptions of whether top earners are paying their fair share. Seventy percent of Canadians polled believed some Canadians don’t pay their fair share, but only 35 percent believed top earners should pay more. Furthermore, 78 percent of respondents believed the top earners’ tax rate should not surpass 50 percent.
Fuss said many Canadians were not aware of how much top earners already pay in taxes, and didn’t want them paying more once they learned more.
“It’s about getting the discussion going about…the share of taxes that are paid by different income groups. But the follow-up conversation is also about our tax competitiveness, and not just at the top end of the distribution, but we also have Canadians earning $50,000 or $75,000 a year paying more in taxes in Canada than they would be paying in the United States at those income levels,” Fuss said.
Meanwhile, the study shows the bottom 20 percent of family income earners, any family making below $65,000, pay no more than 2 percent of overall taxes: 2 percent in Ontario, 1.6 percent in Alberta, 2 percent in Quebec, and 1.7 percent in B.C.
Fuss believes reductions in taxes could lead to increased tax revenue for governments long term, citing B.C. as an example. Under former premier Gordon Campbell’s leadership, the province cut tax rates by 25 percent. B.C. experienced major economic growth, and the government was able to balance the budget within a few years, despite the initial drop in tax revenue.
“So we do have a big problem right now in brain drain to the United States. We have a problem with attracting and retaining talent in Canada, particularly in the tech space and several other industries, and we ultimately need to become a lot more competitive on taxes if we want to retain and attract those people here,” Fuss noted.
Graeme Gordon is The Hub's Senior Editor and Podcast Producer. He has worked as a journalist contributing to a variety of publications, including CBC,…
