Federal Tax Revenue by Province: Equalization and Carbon Pricing

Canada’s federal government collected $511 billion in total revenue for the fiscal year ending March 31, 2025, and federal tax revenue by province in Canada tracks closely with where the people and the high-paying jobs are.¹ Ontario produces the largest total share, Alberta the largest per capita share, and British Columbia rounds out the three provinces that consistently contribute more federal revenue than they receive back in federal spending.² Quebec contributes a large total but sits near the national average per person. The Atlantic provinces and the three territories contribute the least.

What Makes Up Federal Revenue

The shape of each province’s contribution depends on the mix of federal revenue sources. In 2024–25 the major sources were personal income tax at $234.3 billion (about 46% of the total), corporate income tax at $97.0 billion, GST at $52.5 billion, Employment Insurance premiums at $31.5 billion, pollution pricing proceeds at $13.6 billion, non-resident income tax at $13.5 billion, and roughly $68.6 billion from customs duties, excise taxes, Crown corporation profits, and other miscellaneous items.³

Because personal income tax dominates, provincial differences in average earnings and employment levels do most of the work in setting each province’s share. Corporate tax adds a secondary effect: provinces with more headquarters produce outsized corporate receipts relative to their populations. And a few streams, notably the federal fuel charge, only apply in some provinces at all.

Ontario

Ontario generates the largest share of federal tax revenue in absolute terms. That follows from population: Ontario holds roughly 39% of the national total. The concentration of major banks, insurance companies, and technology firms in the Greater Toronto Area also lifts corporate income tax collections and pushes personal income tax yields above the national per capita average. Ontario’s contribution tracks its population share and then some, though it was briefly an equalization recipient in the early 2010s.

Alberta

Alberta is the standout on a per capita basis. In 2018 it was the single largest net contributor to federal revenues per person, generating more than one and a half times the level of federal spending in the province.² The energy sector produces high average incomes even though Alberta’s population is smaller than Quebec’s or British Columbia’s. That same energy exposure makes Alberta’s contribution volatile. When oil prices rise, federal tax collected from Alberta jumps; when they fall, the gap narrows. Year-to-year prediction is less reliable than it is for Ontario.

British Columbia

British Columbia is the third province that consistently produces per capita federal revenue above the national average.² The technology sector, real estate activity, and trade flowing through the Port of Vancouver drive both income tax and customs collections. Customs import duties contributed $6.3 billion federally in 2024–25, with the bulk flowing through major ports in British Columbia, Ontario, and Quebec.¹

Quebec

Quebec is the second-most-populous province and produces a large total contribution, but its per capita federal revenue sits closer to or slightly below the national average. Lower average incomes than in Ontario and Alberta pull the per-person figure down. Quebec also has structural differences in what it pays: employees there pay reduced EI premiums of $1.30 per $100 of insurable earnings in 2026 because the province runs its own parental insurance program.⁴

The Atlantic Provinces

Newfoundland and Labrador, Prince Edward Island, Nova Scotia, and New Brunswick together account for a small fraction of total federal revenue. Populations are smaller and average incomes are lower. Federal per capita spending in these provinces tends to exceed per capita revenue collected there, making them net recipients of federal fiscal support.²

Newfoundland and Labrador is the most volatile of the four. Offshore oil production creates swings in corporate and personal income tax when prices move. The other three Atlantic provinces produce more stable but modest contributions built on service industries, fisheries, and tourism.

Saskatchewan and Manitoba

Saskatchewan sits with Newfoundland and Labrador among the provinces that have historically not received equalization payments, reflecting a stronger resource-driven fiscal capacity than population size alone would suggest. Manitoba’s fiscal capacity has generally placed it among the receiving provinces.

The Territories

Yukon, the Northwest Territories, and Nunavut together contribute less than 1% of total federal tax revenue. Populations are sparse, geography is remote, and costs of living are high. The three territories don’t use the equalization formula that applies to provinces. Instead they receive Territorial Formula Financing payments under the Federal-Provincial Fiscal Arrangements Act to help cover the cost of delivering public services.⁵

How Revenue Flows Back Through Equalization

Federal tax revenue collected from all provinces flows into general revenue, and part of it returns to lower-capacity provinces through the Equalization program. This matters for interpreting the provincial breakdown, because contribution and net position are not the same thing.

Equalization does not measure what a province actually collects in provincial taxes. It estimates how much a province could raise if it taxed at national average rates. Provinces whose estimated fiscal capacity falls below the national average receive payments to close the gap.⁶ The program is funded entirely from federal general revenues; provinces do not directly contribute to it.

For the 2025–26 fiscal year, total equalization payments reached $26.2 billion, with Quebec receiving roughly half of that total due to its large population. Ontario, Alberta, British Columbia, Saskatchewan, and Newfoundland and Labrador have historically not received equalization payments, though Ontario was briefly a recipient in the early 2010s. The provinces that generate the most federal revenue see less of it returned through this particular transfer.

Carbon Pricing Is Not Collected Everywhere

One revenue stream doesn’t distribute by economic activity alone. The Greenhouse Gas Pollution Pricing Act establishes a federal carbon price that applies in provinces and territories without their own equivalent system.⁷ The minimum price rises by $15 per tonne annually, reaching $110 per tonne of CO₂ equivalent in 2026.⁸

British Columbia and Quebec run their own carbon pricing mechanisms and generate no federal fuel charge revenue. In backstop provinces where the federal charge does apply, the proceeds are returned to residents through rebates rather than kept in general revenue. So the geographic pattern of pollution pricing proceeds looks nothing like the pattern of income tax.

Payroll Contributions

Beyond income tax, two federal payroll programs draw revenue from every province: the Canada Pension Plan and Employment Insurance. EI premiums alone generated $31.5 billion in 2024–25.¹ Ontario and Quebec dominate total payroll contributions because they have the largest workforces. Alberta’s higher average wages produce elevated per capita contributions.

Where To Find Current Provincial Numbers

For a current breakdown of personal income tax collected in each province and territory, the Canada Revenue Agency publishes Individual Tax Statistics by Area, which report net federal tax assessed by province, census division, and forward sortation area.⁹ A separate CRA table presents net federal tax by province or territory and tax bracket.¹⁰ The CRA also releases Federal Electoral District Statistics and corporate tax statistics as separate datasets.¹¹

For federal totals by revenue source, the Department of Finance publishes an Annual Financial Report with condensed tables.¹ The full audited numbers appear in the Public Accounts of Canada, tabled annually by the President of the Treasury Board.¹² Statistics Canada maintains data on the fiscal arrangements process, tracking the revenue figures used to calculate federal transfer payments.¹³

1
Canada.ca. Annual Financial Report of the Government of Canada Fiscal Year 2024-25
2
Parliament of Canada. Distribution of Federal Revenues and Expenditures by Province
3
Canada.ca. href=”https://www.canada.ca/en/department-finance/services/publications/annual-financial-report/2025.html” target=”_blank” rel=”noopener”>Annual Financial Report of the Government of Canada Fiscal Year 2024-25
4
Government of Canada. 2026 Employment Insurance Premium Rate
5
Justice Laws Website. Federal-Provincial Fiscal Arrangements Act – Part I.1
6
Department of Finance Canada. Equalization Program
7
Justice Laws Website. Greenhouse Gas Pollution Pricing Act
8
Canada.ca. The Federal Carbon Pollution Pricing Benchmark
9
Canada Revenue Agency. Individual Tax Statistics by Area
10
Canada Revenue Agency. Net Federal Tax by Province or Territory and Tax Bracket – 2025 Edition, 2023 Tax Year
11
Canada Revenue Agency. Income Statistics and GST/HST Statistics
12
Canada.ca. Public Accounts of Canada 2025
13
Statistics Canada. The Fiscal Arrangements Process at Statistics Canada