Where you choose to live in Canada can be for cultural, social, employment-related or a host of other individual and family reasons – but it’s usually not because of the provincial tax rate. Still, tax rules do vary from province to province and it’s good to know the differences, if only for your own knowledge and perhaps, to save you a few important dollars. Here are some interesting examples of Canada’s varied provincial tax landscape.

The amount of taxes you pay and the tax credits available to you are determined by the province you live in but, no matter where you live, the principles for reducing your tax bite as much as possible are the same: take full advantage of all your tax deductions and credits, make maximum contributions to your investments held within an RRSP or TFSA, and use income-splitting and investment strategies that reduce taxes. One other tip: if you’re moving to a province with a lower tax rate, do it before Dec. 31 and you’ll pay the lower rate for the full year. If you’re moving to a province with a higher tax rate, try to delay until the following year.

And it always pays to talk to your professional advisor before you file your return.

Notable variations in tax credits

The federal government provides refundable and non-refundable tax credits that are identical in every province. However, each province provides its own roster of tax credits that often mirror or extend those provided by the federal government – but also vary from province to province. Province Individual tax credit

British Columbia: Seniors’ home renovation tax credit

Available to seniors (65 or older) or family members living with them. Up to $1,000 to offset the cost of home improvements – such as the addition of handrails, ramps or walk-in bathtubs — whether the home is owned or rented.

Manitoba: Primary caregiver tax credit

Available to primary caregivers for spouses, relatives, neighbours or friends. $1,275 for each care recipient; may claim for up to three care recipients for a total of $3,825 per year.

Saskatchewan: First-time home buyers tax credit

Eligibility similar to existing federal first-time home buyer credit; up to $1,100.

Ontario: Healthy homes renovation tax credit

Available to seniors (65 and older) or family members living with them; up to $10,000 in eligible home improvements to make the home safer and more accessible.

2013 tax rate comparison

Employment income $150,000 $50,000 $80,000

Eligible dividends $15,000 $5,000 $10,000

Taxes paid by province of residence

Alberta $46,414 $9,051 $19,387

British Columbia $48,672 $8,148 $18,294

Ontario $53,024 $9,221 $20,298

Quebec $60,191 $12,512 $25,754

This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.

Contact David Brown at 250-315-0241 or at [email protected] to book your appointment.