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Taxes: Old Lady with Very Low Income

2K views 17 replies 7 participants last post by  Diana 
#1 ·
I'm choosing which province to live. With annual income less than 18 thousand (actually 12 thousand pension plus cashing 5 thousand RRSP p/yr), where would I pay least taxes? Please list 4 provinces. If you know which province is financially best for seniors with minimum income please tell. Please help! Thank You in advance
 
#2 ·
My first guess would be Alberta by a significant margin. Basic personal amount is $19,369 before one cent of taxable income. TaxTips.ca - Alberta Personal Income Tax Rates Along with no PST. That is likely the best threshold in all of Canada.

What I don't know is how good AB's low income supplement is regarding health costs, e.g. drugs. But I think it is virtually free for seniors. Seniors health benefits
 
#3 ·
I agree with AB in terms of income tax and GST+PST. Your income tax will be lowest in AB (in the 700 range). QC and SK are in the 900s. BC and ON are a bit over 1000 dollars. There are some refunds (like GST refund?), which are not included in these calculations.

You don't pay health premiums in AB and BC. Not sure about other provinces, but that could add up to a few hundred per year.

Depending on how you spend your funds, PST could make a bigger difference. PST in AB is zero, but 7% in BC. So if you spend half your funds on groceries, etc that could be a 600 dollar difference. If you own a house and spend all your funds on other things, the difference could top 1000. Alberta seems to win in most scenarios.

Another issue is about housing. Rents and RE prices are high in BC, medium in AB, but cheap in the Atlantic provinces. You can buy or rent cheaper in NS and spend or invest the rest.
 
#6 ·
Isn't it just as important to go some place based on the quality of life it can offer? Taxes can change over time.

Alberta has collected far too little in taxes for a long time. I'm not sure how sustainable that is, and social programs suffered as a consequence. As a senior I don't think you'd want to get stuck living somewhere that ends up having to cut all kinds of programs that you depend on.

Room to Move: Alberta's Taxes Are Too Low

And some of the tradeoffs of the very low taxation are described here

I'm not saying that AB will raise the taxes for seniors, but I think it would be good to look at the whole picture including (most importantly) quality of life, and programs/services you need in retirement. A province that is too generous to corporations and the ultra-rich, and not raising enough tax revenue will have problems providing social services. Also keep in mind that the social values in AB (mood of the voting public) seems to favour low taxation for large income earners, which means that social programs that you need might stay underfunded.

DenisD: will you ever need healthcare in your retirement years?
 
#13 ·
I agree that one shouldn't decide which prov to live strictly on tax rate. In my case cost of living is key. But within a prov there is variation by city. I really have never thought of Alberta. I'm more inclined on moving to Ontario or BC or even PEI. But I need to establish where I pay less taxes and get more in terms of disposable funds. I wish you guys would make a #1 and #2 and #3 list of top prov for me. Thank you so much!
 
#7 · (Edited)
James, those are reasonable issues to raise vis-a-vis Alberta, but AB also has some of the healthiest social benefits of all provinces. Quebec may be an exception?

That second link comes directly from the NDP oriented CCPA which doesn't say that AB currently has the highest (best) social costs per capita in Canada and effort must be undertaken to bring them back into line. The current gov't IS focused on bringing its social costs (including health and education) per capita back into line with ON and BC. It will take some years to get there, and yet still be among the best in Canada.

At the same time, some day, AB is going to have to raise more revenue, preferably via a sales tax, land transfer taxes and probate fees. I've been raggng on my AB family members who are in the civil service that they are going to have to suck it up and not have any increase in wages for a number of years.

Your response is tainted more from ideology than fact. Neither The Parkland Institute nor CCPA are ideologically neutral. If you are going to post materials, please take an objective position. Your post is well below your standards.

Added much later: Did not have time this morning to provide some supporting material to my argument. Things that the idealogues at Parkland Institute and CCPA don't say. At https://open.alberta.ca/dataset/05b.../download/budget-2020-fiscal-plan-2020-23.pdf, start at page 121 for how far an outlier AB is relative to 3 other provinces on a per capita basis. Look further at page 124 for how much an outlier AB is in health, and page 129 for post-secondary education. AB needs to get its shite together!
 
#9 ·
IT will have to happen eventually and after the first year's worth of wails of anguish, residents will just motor along like everyone else does. I've heard that 5% would be good enough... still would put AB at the bottom of the heap in VAT. When my AB friends and relatives whine, I bluntly say......grow up. They don't like it but I don't give a shite what they like and don't like. They need to live in the real world.
 
#15 ·
Diana, no one here can really give you a ranking. None of us know enough about each/every province in terms of taxes and cost of living at a particular income level to have any confidence in the numbers. You need to do some of that work yourself.

Start with income taxes as it is the easy one. Just look at the tax calculator I gave you a link too in post #2, and click for each province based on your taxable income. You won't have any provincial income tax in AB with income under $19,369. In BC. you will have provincial income tax @ 5.06% for income above $10,949...except that is not quite true because besides the Personal Deduction, you also have an Age Credit being over 65 plus a Pension Income credit.

You are likely better off using the Full Income Tax Calculator for the province of interest, making sure your CPP pension income goes in the CPP line and OAS goes in the OAS line. You may find that there may be next to zero income tax in any province.

There is something to be said to living in a low rent town/city somewhere, the Maritimes probably being 'lowest' rent. But then HST is highest in those provinces too (albeit getting a GST/HST credit) and social supports may be much less, particularly in health. Senior Benefits by Province may be helpful too.

I don't know how to navigate Senior Housing supplements/programs by province. Every province has some kind of program.
 
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