This document has been updated on October 24th, 2017 and reflects the state of the Law, including draft amendments, at that date.


Investment Income Comparison

A number of factors have to be considered when acquiring an investment, in particular the inherent risk as well as the individual’s risk tolerance. The after-tax rate of return is still often a determining factor in this regard. The following table presents a comparison of pre-tax returns on various investment categories in 2016. These calculations are based on the maximum marginal tax rate. Thus, in Quebec, an eligible dividend of 3.10% before taxes is equal to a 4% interest return before taxes, for a net tax return of about 1.9% in both cases.

2017 Pre-tax interest
rate of
(%)
Provides the same after-tax return as
Capital gain Eligible dividend Other dividend
at a pre-tax rate of: (%)
Quebec 4
5
6
7
2.557
3.18
3.82
4.46
3.10
3.88
4.66
5.43
3.33
4.16
4.99
5.82
Ontario 4
5
6
7
2.54
3.17
3.81
4.44
3.06
3.83
4.60
5.36
3.40
4.25
5.10
5.95
New Brunswick 4
5
6
7
2.55
3.18
3.82
4.46
2.81
3.51
4.21
4.92
3.48
4.34
5.21
6.08