Does Ontario have an estate tax I need to worry about?

Ontario does not have a separate provincial "estate tax." What many people call an estate tax in this province is actually the estate administration tax (commonly called probate fees), which is calculated on the value of estate assets that pass through the will.

At the federal level, Canada does not impose a formal estate tax either. However, the Canada Revenue Agency treats death as a deemed disposition — meaning your estate may owe income tax on capital gains accrued on investments, real property, registered accounts, and other assets at the time of death. This is reported on a terminal (final) tax return filed for the deceased, and it can be a significant liability.

Proper estate planning — such as spousal rollovers, naming beneficiaries on registered accounts, and holding life insurance — can reduce or defer some of these tax costs. Speaking with an estate lawyer and a tax professional before finalizing your will is the best way to understand what your estate will actually owe.