Study
| EST. READ TIME 2 MIN.Ontario continues trend of uncompetitively high personal income tax rates
Broken Promises: The Persistence of Elevated Personal and Corporate Income Taxes in Ontario
Summary
- Since 2012, Ontario’s top marginal personal income tax rate (PIT) rate has increased by 7.12 percentage points, from 46.41 to 53.53 percent. As a result, Ontario now has the third highest top combined federal/provincial or federal/ state top income tax rate in Canada or the United States.
- This increase has been the result of both federal and provincial tax increases.
- Despite repeated promises not to increase taxes, Dalton McGuinty’s government (2003- 2013) enacted provincial tax increases that raised the province’s top PIT. Premier McGuinty also promised the increase was temporary and would later be reversed but neither he nor his successor Premier Wynne (2013-2018) made good on this commitment.
- The Ford government criticized its predecessors for maintaining an uncompetitively high PIT rate in Ontario while in opposition, but has also failed to take action to reduce the rate.
- When running for office in 2018, the Ford government promised to reduce Ontario’s general corporate income tax (CIT) rate by one percentage point, but that promise has not been kept.
- High personal and corporate income tax rates reduce economic output over time. As such, the repeated broken promises from different premiers of different political stripes that have contributed to the persistence of high taxes in Ontario have harmed economic growth in the province.
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Ben Eisen
Senior Fellow, Fraser Institute
Ben Eisen is a Senior Fellow in Fiscal and Provincial Prosperity Studies and former Director of Provincial Prosperity Studies at theFraser Institute. He holds a BA from the University of Toronto and an MPP from the University of Toronto’s School of Public Policy and Governance. Prior to joining the Fraser Institute Mr. Eisen was the Director of Research and Programmes at the Atlantic Institute for Market Studies in Halifax. He also worked for the Citizens Budget Commission in New York City, and in Winnipeg as the Assistant Research Director for the Frontier Centre for Public Policy. Mr. Eisen has published influential studies on several policy topics, including intergovernmental relations, public finance, and higher education policy. He has been widely quoted in major newspapers including the National Post, Chronicle Herald, Winnipeg Free Press and Calgary Herald.… Read more -
Nathaniel Li
Senior Economist, Fraser InstituteNathaniel Li is a Senior Economist at the Fraser Institute. He holds a B.A. from the Fudan University in China anda Ph.D. in Food, Agricultural and Resource Economics from the University of Guelph. Prior to joining the Fraser Institute, he worked for the University of Toronto as a postdoctoral fellow and the University of Guelph as a research associate. His past research work has been published in many high-quality, peer-reviewed academic journals, including the Applied Economic Perspectives and Policy, Agricultural Economics, Preventive Medicine, and Canadian Public Policy. His current research covers a wide range of issues in fiscal, education, and labour-market policies.… Read more -
Steve Lafleur
Steve Lafleur is a research director at the Institute for Research on Public Policy, a former senior fellow of theFraser Institute and a former senior policy analyst at the Fraser Institute. He holds an M.A. in Political Science from Wilfrid Laurier University and a B.A. from Laurentian University where he studied Political Science and Economics. He was previously a Senior Policy Analyst with the Frontier Centre for Public Policy in Winnipeg and is a Contributing Editor to New Geography. His past work has focused primarily on housing, transportation, local government and inter-governmental fiscal relations. His current focus is on economic competitiveness of jurisdictions in the Prairie provinces. His writing has appeared in every major national and regional Canadian newspaper and his work has been cited by many sources including the Partnership for a New American Economy and the Reason Foundation.… Read more