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Total tax contributions
Canadian life and health insurers contributed over $6.6 billion in
taxes to Canadian federal, provincial and local governments in
2015. Of this, $3.5 billion was borne by the industry, and a further
$3.2 billion was collected and paid as provincial sales taxes on life
and health insurance products and as employees' share of payroll
taxes.
Corporate income taxes (which are based on earnings), accounted
for less than a quarter of total taxes borne by the industry in 2015.
The remainder (more than three quarters) is made up of taxes that
are not dependent on earnings, such as insurance premium taxes,
sales taxes and capital taxes.
Federal capital tax is imposed on regulatory capital and thus
increases the cost of capital to life insurers for maintaining or
increasing their capital, even though regulators require capital
to ensure the safety and security of financial institutions and
consumers. Canada is the only major country in the world with a
capital tax on financial institutions.
The industry's 2015 total tax
contribution to all levels of
governments in Canada was
twice its corresponding share
of Canada's GDP
$6.6B
Over
2015 Distribution of total tax contributions ($millions)
Federal Provincial Total
Taxes borne
Corporate income taxes 430 359 789 23%
Federal capital taxes 271 271 8%
Insurance premium taxes 1,305 1,305 38%
Payroll taxes (employers') 130 159 289 8%
GST/HST 121 155 276 8%
Investment income taxes 131 131 4%
Property/business taxes 62 352 414 11%
Total taxes borne 1,145 2,330 3,475 100%
Taxes collected
Sales taxes on premiums 2,222 2,222
Payroll taxes (employees') 942 942
Total taxes collected 942 2,222 3,164
Total tax contributions 2,087 4,552 6,639
Taxes borne are taxes
paid by insurers directly
to governments
Taxes collected are
amounts collected
from insurers'
customers and
employees and paid
over to governments
on their behalf
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