Canadian Life and Health Insurance Facts -- 2018

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18 Total tax contributions Canadian life and health insurers contributed almost $7.7 billion in taxes to Canadian federal, provincial and local governments in 2017. Of this, $4.1 billion was borne by the industry, and a further $3.6 billion was collected and paid as provincial sales taxes on life and health insurance and as employees' share of payroll taxes. Corporate income taxes (which are based on profits) accounted for over a quarter of the total tax borne by the industry in 2017. The remainder is made up of taxes that are not dependent on profits, such as insurance premium taxes, sales taxes and capital taxes. Premium taxes on insurers and retail sales taxes on insureds, both paid to the provinces, increase the cost of insurance protection for Canadians. At the same time, federal capital tax levied on regulatory capital increases the cost of maintaining or increasing capital that ensures the security of benefits provided by life and health insurers. The industry's 2017 total tax contribution to all levels of government in Canada was twice its share of Canada's GDP $7.7B 2017 Distribution of total tax contributions ($millions) Federal Provincial Total Taxes borne Corporate income taxes 722 462 1,184 29% Federal capital taxes 209 - 209 5% Insurance premium taxes - 1,510 1,510 37% Payroll taxes (employers') 142 187 329 8% GST/HST 141 185 326 8% Investment income taxes 132 - 132 3% Property/business taxes 30 400 430 10% Total taxes borne 1,376 2,744 4,120 100% Taxes collected Sales taxes on premiums - 2,364 * 2,364 Payroll taxes (employees') 1,192 - 1,192 Total taxes collected 1,192 2,364 3,556 Total tax contributions 2,568 5,108 7,676 Taxes borne are taxes paid by insurers directly to government Taxes collected are taxes collected from insurers' customers and employees and paid to government on their behalf *Saskatchewan imposed a sales tax on insurance premiums in August 2017, but announced a retroactive reversal in 2018 since this tax was punitive and discouraged consumers from adequately protecting themselves. The expected tax refunds have been netted against the sales tax charged in 2017 in the table above.

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