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== Taxation ==

== Taxation ==

The average tax rate in Canada is much higher than in the United States. In 2003, Canada's tax burden equals about 33.8% of GDP placing it in the middle of the G7 countries, with Japan lowest at 25.3% and France highest at 43.4% <ref>[http://www.fin.gc.ca/activty/faq1e.html#Taxation Department of Finance Canada: FAQs]</ref>. The US rate is roughly 25.6%; this discrepancy is consistent with the differing levels of social services which the governments funds. Canada also has managed to run without a budget deficit for a number of years.  Equalization payments, worth 11.7 billion Canadian dollars are made by the federal government to the provinces from richer provinces (currently Ontario, Alberta and British Columbia) and the poorer provinces (Newfoundland, Nova Scotia, Prince Edward Island, New Brunswick, Quebec, Manitoba and Saskatchewan) .  This is to ensure that reasonably uniform standards of services and taxation are kept between the richer and poorer provinces.<ref>Budget 2007 [http://www.budget.gc.ca/2007/bp/bpc4e.html]</ref>  These payments have not been without controversy as provinces begin to make more revenues from natural resources they do not want to give up the Equalization payments.  Additionally Quebec, the most populous of the "have not" provinces, receives the largest payments.

The average tax rate in Canada is higher than in the United States. In 2003, Canada's tax burden equals about 33.8% of GDP placing it in the middle of the G7 countries, with Japan lowest at 25.3% and France highest at 43.4% <ref>[http://www.fin.gc.ca/activty/faq1e.html#Taxation Department of Finance Canada: FAQs]</ref>. The US rate is roughly 25.6%; this discrepancy is consistent with the differing levels of social services which the governments funds. Canada also has managed to run without a budget deficit for a number of years.   

 

Equalization payments, worth 11.7 billion Canadian dollars are made by the federal government to the provinces from richer provinces (currently Ontario, Alberta and British Columbia) and the poorer provinces (Newfoundland, Nova Scotia, Prince Edward Island, New Brunswick, Quebec, Manitoba and Saskatchewan) .  This is to ensure that reasonably uniform standards of services and taxation are kept between the richer and poorer provinces.<ref>Budget 2007 [http://www.budget.gc.ca/2007/bp/bpc4e.html]</ref>  These payments have not been without controversy as provinces begin to make more revenues from natural resources they do not want to give up the Equalization payments.   

 

British Columbia has the lowest corporate tax rate in North America <ref>http://www.investbc.com/businessclimate.htm</ref>.

Canada also has a national sales tax, the Goods and Services Tax (GST) of 5% on all purchases. Some provinces add an additional percentage in the form of a Provincial Sales Tax (PST), or a combined Harmonized Sales Tax (HST) combining GST and the Provincial Sales Tax. Based on actual income, and a number of other factors, the government will refund GST/HST to eligible tax payers in quarterly installments on the fifth of the month in July, October, January, and April.

Canada also has a national sales tax, the Goods and Services Tax (GST) of 5% on all purchases. Some provinces add an additional percentage in the form of a Provincial Sales Tax (PST), or a combined Harmonized Sales Tax (HST) combining GST and the Provincial Sales Tax. Based on actual income, and a number of other factors, the government will refund GST/HST to eligible tax payers in quarterly installments on the fifth of the month in July, October, January, and April.