Section 7 – Investments
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. These calculations are based on the maximum marginal tax rate. Thus, in Quebec, an eligible dividend of 3.12% before taxes is equal to a 4% interest return before taxes, for a net tax return of about 1.9% in both cases.
2023 | 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 |
2.55 3.18 3.82 4.46 |
3.12 3.90 4.68 5.46 |
3.64 4.55 5.46 6.37 |
Ontario | 4 5 6 7 |
2.54 3.17 3.81 4.44 |
3.06 3.83 4.60 5.36 |
3.56 4.45 5.34 6.22 |
New Brunswick | 4 5 6 7 |
2.58 3.22 3.86 4.51 |
2.81 3.51 4.22 4.92 |
3.57 4.47 5.36 6.25 |
This document is up to date as of August 31, 2023 and reflects the status of legislation, including proposed amendments at this date.
Section 7 – Investments
Investment Income Comparison