Live more for less in Atlantic Canada

When it comes to total taxes paid by residents, New Brunswickers and Albertans are neck and neck.

According to The Fraser Institute's Canadian Tax Simulator for 2006, families and unattached individuals living in both New Brunswick and Alberta pay an equal amount, 42.5 per cent, of their earnings in taxes each year.

And the salary difference between Alberta and New Brunswick is not as great as you might expect. On a per person basis, the average weekly earning in New Brunswick is $663.20 ($34,486 annually), compared to $769.13 week in Alberta ($39,994.76 annually).

When you factor in the increased cost of some everyday amenities, the difference in salaries offered in the two provinces is less impressive. The price of a large Tim Horton's coffee, for example, sells for $1.51 in Calgary and $1.29 in New Brunswick. Consider the bigger price difference for season tickets to a Canadian Hockey League team-Calgary Hitmen seats start at $590.52 while the Moncton Wildcats season tickets sell for $410. Similarly, tickets to see the Goo Goo Dolls in Calgary ranged from $59 to $69. In Moncton, tickets to see the same band were $10 less. Tickets to see the Jim Cuddy Band in Moncton were also about $10 cheaper than in Calgary.

There are also small cost increases for items like the same Chez Cora's breakfast and transit fares in Calgary over Moncton. The price tag on seafood is significantly higher in Alberta. Fresh cultivated mussels, for example, cost $1.69 a pound at Sobeys in Moncton and $3.38 at Sobeys in Calgary, and Atlantic Canadians know there's nothing like these delicious tastes of home.

Add the exorbitant costs of housing in Alberta, which are sometimes triple the cost of a similar house in New Brunswick, and the cost of living in the east starts to far outweigh any salary differences.

Canadian Business magazine recently listed the ‘Best Cities for Business'. Six cities in Atlantic Canada were among the top 20 cities listed. Calgary was determined by the magazine to be 25 per cent more expensive to live in than Moncton.

Roger Haineault is with New Brunswick  based Help4Taxes and a newspaper columnist. He says even though Alberta has the lowest tax regime in the country, residents' pay up in other ways.

Natural Resource levies are significant in Alberta. The average family earning $95,492 pays 4.5 per cent (or $4,328) of their annual income in these levies. In New Brunswick, by comparison, the levy works out to be about .2 per cent (or $134) for a family earning $64,527.

The Tax Freedom Day is the theoretical date in the year when people actually start to work for themselves after covering the various taxes. While Alberta is often cited as the most tax friendly environment in Canada, the Fraser Institute calculates June 6 as the threshold. As hard to believe, New Brunswick is just six days later.

"You just can't deny that the cost of living is so low here,' Haineault says. "No matter what you hear, the tax freedom day clearly shows that the money you make for yourself in Atlantic Canada comes just shortly after the money you make for yourself in Alberta.

"Once all the costs of living - and housing is a biggie- are bundled together, people find more and more that living away from the people and lifestyle they know and love in the east isn't worth it," Haineault points out.

Especially in the case where a father is leaving his family behind in Atlantic Canada to work in Alberta, it becomes obvious that the worker is responsible for maintaining two households while most of the time he is paying rent on top of his rent or mortgage back east.

Currently, as Haineault points out, that a second home is not tax deductible, even if it is a necessity in pursuing taxable income. For the person with a family and home in New Brunswick, for example, and an apartment in Alberta, Canada Revenue Agency considers their permanent residence to be in New Brunswick, As a result they must file their tax return as New Brunswick residents and pay taxes at the N.B. rate.

"If your family is in Alberta and interested in buying a home, how do you afford it?" he asks. "The 25 per cent down payment on a house in some parts of Alberta would almost cover the full cost of a similar house in Atlantic Canada".

"While the attraction to Alberta is the big money, the cost of living is huge," he adds.

"This is a lot of the reason people want to come home. They may not make as many dollars, but they work out the difference in the cost of living, and then when they factor in the quality of life they can have here in a beautiful home, it just makes sense to return.'


Publication taking from the Telegraph Journal - winter 2007 Issue