Want to live closer to the kids or grandkids? Most people don't consider taxation when they're planning a move, but the tax brackets and percentages are different depending on your province of residence so it's important consider that before thinking about moving.
 

The best province to live in, based on pure provincial tax rate, is Alberta. The tax rate is 10% up to $148,269.  That said, if you're single and living in retirement you're likely not getting that much income and there are lot of other factors to consider other than the taxation.
 

The average income for a person over 65 in Canada is between $35,000 and $40,000 per year. That includes things like OAS, CPP/QPP and other investments, as well as wages for some who continue to work after 65.  You can likely double that amount for most couples to around $80,000 combined with the help of a financial expert. The 2024 federal tax is 15% on up to $55,867 of taxable income so you'll pay at least a portion of that no matter where you live in Canada. Married couples can have more tax options so it's important to seek out an expert's advice.
 

Table of tax rates by province

Here's the tax bracket rates by province based on earning $40,000 per person per year in 2024:
British Columbia	5.06% on the portion of taxable income that is $47,937 or less
Alberta	10% on the portion of taxable income that is $148,269 or less
Saskatchewan	10.5% on the portion of taxable income that is $52,057 or less
Manitoba	10.8% on the portion of taxable income that is $47,000 or less
Ontario	5.05% on the portion of taxable income that is $51,446 or less
Quebec	14% on the portion of taxable income that is $51,780 or less
New Brunswick	9.4% on the portion of taxable income that is $49,958 or less
Nova Scotia	14.95% on the portion of taxable income between $29,590 and $59,180
Prince Edward Island	13.63% on the portion of taxable income between $32,656 and $64,313
Newfoundland and Labrador	8.7% on the portion of taxable income that is $43,198 or less
Yukon	6.4% on the portion of taxable income that is $55,867 or less
Northwest Territories	5.9% on the portion of taxable income that is $50,597 or less
Nunavut income tax rates for 2024	4% on the portion of taxable income that is $53,268 or less

 

As you can see, the best place to live in Canada based on the pure provincial or territorial tax rate is Nunavut at 4%.  Like Alberta, Northwest Territories, and Yukon, there is no provincial sales tax there either.  That said, the cost of living in Nunavut is estimated to be 40% higher than anywhere else in Canada. The same could be said for B.C. where you'd be paying a lower provincial tax rate, but more for everything else depending on where you currently live. 

Cost of living is a big one for most of us. Of course, there are many factors in the cost of living like housing costs and food prices.  You might pay more for food, gas and utilities in one province, but less for a place to live etc.  So it's important to factor that into any decision about where you might want to live in retirement. Let's not forget about one of the most important things in retirement, access to quality and affordable health care.  You'll need to consider that you might have to pay in order to get faster access to a doctor in a different province.  You'll also need to seek out expert advice when it comes to probate rules and estate laws in your legacy planning as they can change by province too.

 

If you are planning on moving to another province there's something else you'll need to consider, based on taxes alone, and that's when you move.  If you're retiring and moving to another province, your tax liability is based on your province of residence on December 31.   So if you move to say, Quebec in November, you'll pay their provincial tax for the year when you file your taxes. If your income was significantly higher when you were living in the other province you could really take a tax hit in your new home province. That can significantly impact your finances in retirement. 

 

Although it's often the coldest month in most provinces, January might be the best bet to move. You can then effectively delay your exposure to potentially higher tax rates of the new province for an entire year.  Then it would be based on what your taxable income in that new province for that year.  Not many of us want to move in January in Canada, especially in retirement.

 

Bottom line? Seek the advise of a financial expert to find out what kind of tax and other financial exposures you might be facing if you move.  PKAG can give you advice and potentially suggest the right person for you.  We can take a look at your financial plan, even if it is with someone else, and see if we can improve it.  Feel free to contact us with any questions you might have.  You can also book a meeting with us and we can go over it in person.  We can create a retirement plan based on the lifestyle you want to live in retirement.

We also have free, no-obligation seminars where we'll discuss the tax implications on your retirement plans. We can answer your questions there as well. We look forward to hearing from you.