Pros and Cons of Being an Inter-provincial Employee

By Joe Issid

Monster Contributing Writer

According to Statistics Canada, about 3% of Canada's workforce are inter-provincial employees: workers who hold primary residence in one province/territory and work in another. On the surface, it may seem a bit odd to commute across provincial lines but it is a phenomenon that has been steadily growing over the last 15 years (notwithstanding a downturn following the 2008 global financial crisis). As of 2011, 420,000 Canadians commuted across provincial lines for work so, clearly, there must be some compelling reasons why this is happening. So, what are the pros and cons of being an inter-provincial employee and is it something worth looking into?

A long commute?

In some cases, a provincial border happens to separate two nearby cities causing a great deal of inadvertent cross-provincial commuting. For example, Gatineau, Quebec and Ottawa are in great proximity to one another and, as such, share a tremendous amount of resources (including, of course, labour). However, in many cases, people have to travel far greater distances to get to work. For instance, Via Rail reserves a certain amount of its Ottawa-Montreal carriage service for daily commuters. The 2-hour one-way journey is full of employees who live in Ontario yet work in Quebec, who foot a considerable monthly bill to do so. But why?

Remote opportunities

When I was a young job seeker back in the 90s, my efforts were confined to the pavement and, literally, knocking on doors. In today's economy, it is almost effortless to search for jobs in virtually any city on earth. As such, the local job economy begins to matter less and less if we are able to expand our job searches to more remote locations. To wit, being able to apply for a job in, say, Montreal, while living in Ottawa is a fairly frictionless event. Should you actually land the job, the decision to remain in Ottawa can also be a reasonable proposition. With the capacity to rapidly commute between cities and the ability to work effectively while in transit, the journey to and from work doesn't need to be wasted time. In fact, this "down" time can actually be extremely productive.

Cost benefits

While a lengthy commute can be expensive, there may certainly be a cost incentive to working in a different province. As we all know, the cost of living differs greatly from one province to the next, which can certainly factor into making major life decisions. As a Quebec resident, I know of more than a few people who have decided to move their homes over the western border into Ontario to be able to save on real estate costs and associated taxes. A 1-hour commute into Montreal, while costly, is a reasonable trade-off for the bigger picture benefit. Of course, before making any such decisions, consult a tax and/or real estate specialist to understand the real implications involved.

Employee deductions

Most companies will process your pay cheque as if you were resident in the province where you work. For example, an Ontario resident working in Quebec will, most likely, pay Quebec tax contributions on each pay cheque. According to the Canada Revenue Agency, when filing your yearly tax return, you are obliged to file a return based on your province of residence. As such, adjustments will be made to ensure that you are refunded (or charged) for the discrepancy that may exist. Whether you are on the receiving or giving end, this can certainly impact your cash flow (and increases the complexity of your annual tax filings). Again, an appropriate tax professional will be able to advice you accordingly.

Wear and tear

Traveling a long distance on a daily basis will certainly begin to take its toll. Whether you are comfortably commuting by train, plane or car, the time involved (and mileage on your poor car) will add up over time and can become a great mental and physical drain. Also, being far from home each and every day can be an incredible inconvenience, especially if you have a young family (or looking to start one). Yes, there are great opportunities that can be realized working away from home but there are also non-financial (and hard-to-measure) costs involved.