Taxation is a prerogative shared between the federal government and the various provincial and territorial legislatures. The tax system is a progressive (or graduated) system which means the more money you make, the more income tax you pay. Low-income earners are taxed at a lower rate. If you earn less than $49,020, you pay 15 per cent of taxable income, the lowest bracket of federal income tax. The highest slab is 33 per cent, for taxable income above $216,511 per year.

Canadians are also taxed on the consumption of most consumer goods and services.  The tax system is a self-assessment system. Individuals are required to determine their own liability for income taxes.

Relief for foreign taxes is given through a tax credit and deduction system. A foreign tax credit of up to 15 per cent for any foreign tax withheld at source on property income (other than income from real property) is allowed. When the foreign tax exceeds 15 per cent of the income, the excess foreign taxes may be allowed as a deduction from the property income. This provision can have adverse implications for foreigners who have foreign property income but live in Canada.