Surprise! NDP BC has lowest income taxes for average working person

Workers earning up to $150,000 keep more of their pay in B.C. than Alberta, where income tax rates go easier on highest incomes.

NDP-governed British Columbia has the lowest income taxes for middle incomes, with a worker earning $60,000 keeping $1,096 more in B.C. than Alberta, $629 more than in Ontario, and $2,446 more than in Quebec, according to an analysis by the British Columbia Ministry of Finance.

B.C.’s income tax advantage begins to lessen after about $100,000, at which point a B.C. worker keeps $1,692 more than in Alberta, $1,065 more than in Ontario and $4,043 more than in Quebec.

At $125,000, the income tax advantage of working in B.C. narrows to $1,315 over Alberta and at $150,000 a BC worker only keeps $386 more than in Alberta.

Alberta taxes medium incomes more, higher incomes less

B.C.’s rate of 5.06 per cent on the first $49,279 of income and its 7.7 per cent rate on the second bracket from $49,279 to $98,560 are both significantly lower than Alberta’s flat 10.0 per cent rate on income under $148,268.

Though conservative-governed Alberta takes more from lower and middle income earners, its tax rates are more generous to those with high incomes.

British Columbia’s two highest income tax brackets put a 16.8 per cent rate on income between $186,306 and $259,829 and 20.5 per cent on income over $259,829.

Alberta’s highest brackets puts a 14 per cent rate on income from $237,230 to $355,845 and 15 per cent on income over $355,845.

BC NDP reforms made taxation more progressive

B.C.’s Horgan government introduced the two highest tax rates after 2020, when Medical Services Plan premiums were eliminated. The B.C. NDP’s tax reform created a more progressive tax system, replacing the flat rate MSP with new brackets with higher rates on the highest incomes.

Alberta levies higher taxes on lower and middle incomes despite an expected $50 billion in revenue from non-renewable resource royalties in 2025, about 26 per cent of province’s budget revenues, according to a November Bank of Nova Scotia analysis. The bank believes 2025 royalty revenue on bitumen alone is tracking $3.1 billion higher than previously projected.

The B.C. analysis includes provinces’ various low income reductions plans, Ontario and P.E.I.’s income surtaxes, Quebec’s income tax abatement and similar tax system adjustments. The analysis is summarized in chart A4 on page 136 of the linked document.

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