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Greater Montreal: High purchasing power
February 2011
A LOW NET TAX BURDEN Greater Montreal is located in the province of Quebec and is the second most populous metropolitan area in Canada with 3.8 million inhabitants. The economic engine of Quebec, Metropolitan Montreal represents approximately 50% of Quebec’s GDP, employment and population. Greater Montreal’s residents are subject to Canadian, Quebec and municipal tax regulations. The net 1 tax burden of individuals in Quebec is quite competitive when compared to average in G7 countries because of the low social contributions coupled with the generous benefits provided by the provincial government. Single person earning 167% of average salary Net tax burden (% of average salary) Quebec and G7 countries, 2008
Couple with two children earning 167% or average salary Net tax burden (% of average salary) Quebec and G7 countries, 2008
Source: Luc Godbout, Suzie St-Cerny and Chantal Amiot, Année d’imposition 2008 : Une charge fiscale nette plus faible et des impôts sur le revenu plus élevés qu’ailleurs, est-ce possible?, Document de travail 2010/03, Chaire de recherche en fiscalité et en finances publiques, Université de Sherbrooke, 17 mars 2010.
For households with children, Quebec ranks first (tied with Japan), among the G7 countries, with the lowest net tax burden in 2008. Quebec is the region among the G7 countries which recorded the largest decreases in the net tax burden in percentage points between 2000 and 2008, mainly because of a reduction in income taxes accorded by the Government of Quebec in 2008.
AN AFFORDABLE COST OF LIVING Greater Montréal’s affordable cost of living is clearly one of its greatest assets. Housing, food, health care, clothing and education cost less in Montréal than in other major international cities. Housing Compared with other major urban centers in North America or Europe, Greater Montréal is one of the few cities with access to affordable housing. Properties are sold and rented, on average, for half the price of other major international cities. Moreover, the home sales price is lower in Greater Montréal than in Calgary, Ottawa, Toronto or Vancouver. 1
The calculation of the net tax burden is based on the sum of taxes on income, the sum of social security contributions paid by the individual and the benefits received by the individual.
2
What’s more, home owners in Canada may realize a capital gain when selling a home. A taxpayer is not required to report the sale of a residence in his tax return if it was his principal residence for the entire time he owned it (Canada Revenue Agency, 2010). Price levels, including rent (New York = 100) Selection of five metropolitan areas, 2010
Apartment rents (New York = 100) Furnished four-room apartment, 2009 Selection of five metropolitan areas, 2009
Note (chart on the right): Rents are based on apartments built after 1980 (4 rooms, kitchen, bathroom; with garage) including all incidental costs, the level of housing comfort conforms to the expectations of salaried mid-management employees in areas favoured by them. Source: UBS, Prices and Earnings, 2009 and 2010 editions
Child Care Greater Montreal also benefits from child care expenses that are among the lowest in North America. A program of reduced rate daycare places is available for children from 0 to 5 years old. These places at $7 CA per child per day are offered by the centres de la petite enfance (CPE): subsidized day cares and facilities managed by an accredited family child care service.
Education Quality public education is also provided free of charge from kindergarten through college (CEGEP), in both English and French, to Quebec residents and to children of foreign workers holding work permits in Quebec.
Greater Montréal also has 11 institutions of higher learning for which tuition fees rank among the lowest in North America. For all cycles, a full-time Canadian student pays an average of $2,500 CA tuition fees per year in Greater Montreal. This total averages more than $5,700 CA in other major Canadian cities (Calgary, Ottawa, Toronto and Vancouver). The cost advantage of Greater Montreal in terms of university education is more significant when compared to the United States. Indeed, annual tuition fees for a U.S. college student enrolled full-time 2 for four years varied from an average of $7,605 U.S. to $27,293 U.S. in 2010-2011 (The College Board, 2010).
2
Average for university students enrolled full time in a public institution within or outside the State of residence or in a private non-profit institution (The College Board, 2010).
3
Tuition for full-time Canadian students, by level ($ CA) Top 5 Canadian metropolitan areas3, 2010-2011
8 000 6,917 6,353
6 000
6,307 5,318
4,802
4,672 1st cycle
4 000
2nd and 3rd cycles
2,415 2,600
2 000
0
Montreal
Vancouver
Calgary
Ottawa/Toronto
Source: Statistics Canada, 2010
A LOW NET TAX BURDEN + AN AFFORDABLE COST OF LIVING = A HIGH
PURCHASING POWER th
Montreal ranks 10 worldwide among 73 cities (UBS, 2010) for the purchasing power of its citizens. The measure of purchasing power eliminates the direct effect of changes in exchange rates, taking into account only the prices and local wages in the calculation of the index, giving a good overview of the real purchasing capacity in the city concerned. Domestic purchasing power (New York = 100) Selection of five metropolitan areas, 2010
Note : The domestic purchasing power is the net hourly wage divided by the cost of the entire basket of commodities including rent. Source: UBS, Prices and Earnings, 2010
3
Data for these cities reflect the average fees in effect in each province.
4
Greater Montreal: High purchasing power
February 2011
A LOW NET TAX BURDEN Greater Montreal is located in the province of Quebec and is the second most populous metropolitan area in Canada with 3.8 million inhabitants. The economic engine of Quebec, Metropolitan Montreal represents approximately 50% of Quebec’s GDP, employment and population. Greater Montreal’s residents are subject to Canadian, Quebec and municipal tax regulations. The net 1 tax burden of individuals in Quebec is quite competitive when compared to average in G7 countries because of the low social contributions coupled with the generous benefits provided by the provincial government. Single person earning 167% of average salary Net tax burden (% of average salary) Quebec and G7 countries, 2008
Couple with two children earning 167% or average salary Net tax burden (% of average salary) Quebec and G7 countries, 2008
Source: Luc Godbout, Suzie St-Cerny and Chantal Amiot, Année d’imposition 2008 : Une charge fiscale nette plus faible et des impôts sur le revenu plus élevés qu’ailleurs, est-ce possible?, Document de travail 2010/03, Chaire de recherche en fiscalité et en finances publiques, Université de Sherbrooke, 17 mars 2010.
For households with children, Quebec ranks first (tied with Japan), among the G7 countries, with the lowest net tax burden in 2008. Quebec is the region among the G7 countries which recorded the largest decreases in the net tax burden in percentage points between 2000 and 2008, mainly because of a reduction in income taxes accorded by the Government of Quebec in 2008.
AN AFFORDABLE COST OF LIVING Greater Montréal’s affordable cost of living is clearly one of its greatest assets. Housing, food, health care, clothing and education cost less in Montréal than in other major international cities. Housing Compared with other major urban centers in North America or Europe, Greater Montréal is one of the few cities with access to affordable housing. Properties are sold and rented, on average, for half the price of other major international cities. Moreover, the home sales price is lower in Greater Montréal than in Calgary, Ottawa, Toronto or Vancouver. 1
The calculation of the net tax burden is based on the sum of taxes on income, the sum of social security contributions paid by the individual and the benefits received by the individual.
2
What’s more, home owners in Canada may realize a capital gain when selling a home. A taxpayer is not required to report the sale of a residence in his tax return if it was his principal residence for the entire time he owned it (Canada Revenue Agency, 2010). Price levels, including rent (New York = 100) Selection of five metropolitan areas, 2010
Apartment rents (New York = 100) Furnished four-room apartment, 2009 Selection of five metropolitan areas, 2009
Note (chart on the right): Rents are based on apartments built after 1980 (4 rooms, kitchen, bathroom; with garage) including all incidental costs, the level of housing comfort conforms to the expectations of salaried mid-management employees in areas favoured by them. Source: UBS, Prices and Earnings, 2009 and 2010 editions
Child Care Greater Montreal also benefits from child care expenses that are among the lowest in North America. A program of reduced rate daycare places is available for children from 0 to 5 years old. These places at $7 CA per child per day are offered by the centres de la petite enfance (CPE): subsidized day cares and facilities managed by an accredited family child care service.
Education Quality public education is also provided free of charge from kindergarten through college (CEGEP), in both English and French, to Quebec residents and to children of foreign workers holding work permits in Quebec.
Greater Montréal also has 11 institutions of higher learning for which tuition fees rank among the lowest in North America. For all cycles, a full-time Canadian student pays an average of $2,500 CA tuition fees per year in Greater Montreal. This total averages more than $5,700 CA in other major Canadian cities (Calgary, Ottawa, Toronto and Vancouver). The cost advantage of Greater Montreal in terms of university education is more significant when compared to the United States. Indeed, annual tuition fees for a U.S. college student enrolled full-time 2 for four years varied from an average of $7,605 U.S. to $27,293 U.S. in 2010-2011 (The College Board, 2010).
2
Average for university students enrolled full time in a public institution within or outside the State of residence or in a private non-profit institution (The College Board, 2010).
3
Tuition for full-time Canadian students, by level ($ CA) Top 5 Canadian metropolitan areas3, 2010-2011
8 000 6,917 6,353
6 000
6,307 5,318
4,802
4,672 1st cycle
4 000
2nd and 3rd cycles
2,415 2,600
2 000
0
Montreal
Vancouver
Calgary
Ottawa/Toronto
Source: Statistics Canada, 2010
A LOW NET TAX BURDEN + AN AFFORDABLE COST OF LIVING = A HIGH
PURCHASING POWER th
Montreal ranks 10 worldwide among 73 cities (UBS, 2010) for the purchasing power of its citizens. The measure of purchasing power eliminates the direct effect of changes in exchange rates, taking into account only the prices and local wages in the calculation of the index, giving a good overview of the real purchasing capacity in the city concerned. Domestic purchasing power (New York = 100) Selection of five metropolitan areas, 2010
Note : The domestic purchasing power is the net hourly wage divided by the cost of the entire basket of commodities including rent. Source: UBS, Prices and Earnings, 2010
3
Data for these cities reflect the average fees in effect in each province.
4
