Compare taxes and see how much you save moving from Ontario to Alberta
For retirees weighing Ontario against Alberta, the income tax numbers favour Ontario — but by a surprisingly small margin when Alberta's no-PST advantage is included. At $80,000 retirement income, Ontario retirees pay $2,789 less in provincial income tax than Albertans. However, Alberta's zero provincial sales tax saves roughly $2,000/year on $40,000 of retirement spending. The combined result: Ontario's net advantage is only about $789/year at an $80,000 retirement income. At $100,000, Ontario's income tax advantage is $2,959 against Alberta's $3,200 PST saving — making the two provinces virtually tied on total tax burden. The retirement choice between Ontario and Alberta therefore comes down to housing costs, climate, family proximity, and personal preference rather than a clear tax winner.
Lower Income Tax for Retirees
5 progressive brackets from 5.05% to 13.16%
No Provincial Sales Tax
5 progressive brackets from 10% to 15%
At $80,000 income:
Ontario retirees pay $2,789 less income tax than Alberta at $80,000. Add in Alberta's no-PST benefit (~$2,000/year) and the provinces are close — the retirement decision usually hinges on housing and family proximity.
| Income | ON Tax | AB Tax | Savings | 10-Year |
|---|---|---|---|---|
| $40,000 | $2,020 | $4,000 | -$1,980 | -$19,800 |
| $60,000 | $3,381 | $6,000 | -$2,619 | -$26,190 |
| $80,000 | $5,211 | $8,000 | -$2,789 | -$27,890 |
| $100,000 | $7,041 | $10,000 | -$2,959 | -$29,590 |
| $140,000 | $11,447 | $14,000 | -$2,553 | -$25,530 |
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Send Money To/From Canada →They are very close when all taxes are considered. At $80,000 retirement income: Ontario's income tax advantage is $2,789/year. Alberta's no-PST saves roughly $2,000/year. Ontario's net advantage: about $789/year. At $100,000 retirement income, the income tax advantage ($2,959) barely exceeds Alberta's PST saving (~$3,200), making them virtually tied. Housing cost and lifestyle are the real decision drivers.
CPP income is taxed as regular income in both provinces. The federal portion is the same everywhere. Ontario's lower provincial rates mean slightly less tax on CPP income. At a typical combined CPP + OAS income of $20,000–$25,000, the provincial difference is relatively small — Ontario saves a few hundred dollars per year at this income level.
Defined benefit (DB) pension income is taxed as regular income in both provinces. Ontario's pension income tax credit and lower rates provide a slight advantage. Alberta's absence of PST is irrelevant to pension income — it only applies to spending. For most pensioners with $60,000–$100,000 combined income, Ontario offers modest income tax savings.
RRIF withdrawals are taxed as regular income. At higher withdrawal rates (e.g., $100,000+/year from a large RRSP), Ontario's lower provincial rates provide a meaningful advantage. Alberta's income tax starts at 10% from dollar one, meaning even modest RRIF withdrawals are taxed at a higher rate than in Ontario's bottom 5.05% bracket.
Yes, for retirees who spend significantly on goods (new vehicles, home renovations, consumer electronics, travel), Alberta's no-PST creates real savings. On $50,000 of taxable spending, an Albertan saves $4,000 compared to Ontario. However, many retirement expenses (services, healthcare, financial advice) are tax-exempt in Ontario under HST rules.
The TFSA (Tax-Free Savings Account) is a federal program. Contributions, growth, and withdrawals are all tax-free in both provinces. It doesn't change the relative Ontario vs Alberta comparison, but it's a critical retirement planning tool — maximising TFSA contributions reduces taxable income in both provinces equally.
Family proximity is often cited as the #1 retirement location driver in surveys, outweighing financial considerations. If your family is in Alberta, the financial case for retiring there is also reasonable — the total tax difference between provinces is small enough (under $1,000/year in Ontario's favour) that family proximity is well worth it.