Moving from Ottawa to Miami: Government Pensions Meet Florida Taxes

Ottawa runs on federal paychecks, and a lot of those paychecks eventually turn into federal pensions. When the person attached to one of those pensions, or to a DND career, or to a Deloitte or KPMG contract built entirely around serving the federal government, decides the next chapter happens in Miami, the tax story is really two stories. One is what Ontario claims on the way out. The other is what Florida doesn’t claim at all, because there’s nothing to claim.

How much of Ottawa’s tax bill actually disappears?

Almost all of the provincial layer, and none of the federal one. Ontario’s combined federal and provincial top rate, surtax included, sits near 53.53% on income above the top threshold. Florida has no state income tax and Miami-Dade has no county income tax to fill that gap, so once someone is a genuine Florida resident with no remaining Ontario ties, the entire provincial structure, brackets, surtax, and Ontario Health Premium, is simply gone. What doesn’t disappear is US federal tax on worldwide income, so the real comparison is Ontario-plus-federal-Canadian against US-federal-only, not 53.53% against zero.

What does the Ontario surtax actually do?

It’s a tax on top of a tax, and it’s a bigger number than most people expect. Ontario applies a 20% surtax on basic Ontario tax above roughly $4,991, then a further 36% surtax on basic Ontario tax above roughly $6,387, both layered on top of the regular bracket tax before the federal number even enters. That mechanic has no Florida analog whatsoever, since Florida has no basic tax for a surtax to sit on top of.

• For a retiring federal employee with a defined-benefit pension plus investment income, the surtax often applies to a meaningful slice of the total bill, not just a marginal sliver at the very top, which is part of why the corridor’s savings estimate needs real numbers rather than a headline rate.

	Ottawa / Ontario	Miami / Florida
Provincial or state income tax	Yes, combined with federal to roughly 53.53% at the top, including the surtax	None
County or city income tax	None (Ontario has no municipal income tax)	None (Miami-Dade has no county income tax)
Sales tax	HST 13%	Roughly 7% in Miami-Dade (6% state plus 1% county surtax)
Property tax	Roughly 1.0% to 1.2% of assessed value in Ottawa	Roughly 1.5% to 2.0% in Miami-Dade, before homestead relief
Estate tax on death	Ontario Estate Administration Tax, roughly 1.5% above the first tier	No Florida estate tax; US federal estate tax applies above the exemption

Who actually makes this move from Ottawa?

Federal money looking for a Florida lifestyle, more than any other single pattern. This corridor runs heavier on retirees and pre-retirees than most of the Ottawa-to-US pairings, because the underlying population, career federal public servants, DND and CAF members who’ve retired or taken a package, and the Big 4 consultants (Deloitte, KPMG, and similar firms) who spent a career serving the federal government, tends to arrive with a pension already locked in rather than a new job offer.

• A smaller but real slice comes from Ottawa’s tech scene, Shopify alumni among them, drawn by Miami’s own growing tech and startup presence, and from embassy and diplomatic staff who developed Florida ties during a posting and came back once the posting ended. None of these groups is chasing a paycheck the way a Toronto-to-Austin tech move usually is. They’re converting government-era income and savings into a lower-tax, warmer-climate retirement or semi-retirement, which changes what the planning conversation needs to cover.

Does the federal pension keep paying the same way?

Yes, but who taxes it changes. A Canadian federal government pension, whether from the public service, DND, or CAF, keeps paying under its own plan rules regardless of where the retiree lives, and the US-Canada treaty governs which country gets to tax it once the recipient becomes a US resident.

• Once someone is a genuine US tax resident, the pension becomes taxable in the US as ordinary income, with Canada retaining a limited withholding right under the treaty rather than full taxing authority. Florida adds nothing on top of that federal number, since there’s no state income tax to apply to pension income at all, which is a materially different outcome from a state like New York or California taxing the same pension at its own bracket rates.

What happens to the RRSP and TFSA on the way down?

The RRSP keeps its treaty-based deferral with no special election required, and with Florida charging no state income tax, there’s no state-level addback to worry about, a cleaner picture than a corridor running through a state with its own income tax. The TFSA gets none of that protection: the US treats it as a foreign trust, with PFIC exposure if it holds mutual funds, and the standard move is to close it before departure.

What happens to my Ontario return when I leave?

The same departure sequence every Ontario-to-US move runs, regardless of destination. Canada treats worldwide property as sold at fair market value on the departure date, and Ontario tax applies at Ontario’s rates for the year of departure no matter which US state comes next.

• The final Ontario return covers January 1 through the departure date, with Forms T1161 and T1243 capturing the deemed disposition and any property over $25,000 in value. The CRA needs formal notice of non-resident status, and on the US side, the arrival-year return runs as a dual-status return or a full-year election, covered in the first US tax return guide.

Have I already spent too much time in Florida?

Worth checking before assuming the departure date is what starts the US tax clock. Federal retirees in this corridor often spend a chunk of the year in Florida for a few winters before making the move official, and the substantial presence test counts days across three years, not just the year of the move: all of the current year, a third of the prior year, and a sixth of the year before that.

• If that weighted total already clears 183 days in a prior year, US tax residency may have started earlier than the paperwork suggests, which changes what “the year of the move” even means for filing purposes. The full mechanics are in the substantial presence test guide.

What happens to OHIP and the health coverage gap?

OHIP doesn’t end on the departure date itself. Ontario runs a residency test built around roughly 212 days a year in the province, and a genuine permanent departure typically carries a short tail of continued OHIP coverage after the ministry is notified, after which Florida or private US coverage needs to already be in place. There’s no Canadian equivalent to Medicare waiting until 65, so the coverage gap has to be planned, not assumed away.

• The Ontario Health Premium, a separate line from OHIP eligibility itself, stops accruing the year after departure, which matters for anyone timing the exit around a specific tax year rather than a calendar year.

How does the Miami homestead exemption work?

Two mechanics, and the first-year gap between them catches almost everyone who buys before checking. If the Miami home is a genuine permanent residence by January 1, filing Form DR-501 with the Miami-Dade property appraiser by March 1 gets up to $50,000 off assessed value, split between a $25,000 exemption against all levies and a second $25,000 against non-school levies above $50,000 of value.

• Save Our Homes is separate again: once a home has had one exempt year on the roll, annual increases in assessed value are capped at the lower of 3% or the change in CPI. That cap doesn’t apply in year one, when the home is assessed at full just value, so a first-year Miami-Dade tax bill can look higher than expected before the cap starts protecting future years.

What about the house, the estate, and probate?

The Ottawa house is exempt from deemed-disposition rules if it was a principal residence, though the exemption fraction stops growing once Canadian residence ends, and Ontario has no municipal land transfer tax on top of the provincial one the way Toronto does.

• On the estate side, Florida has no state estate tax, but a US resident’s worldwide estate is still subject to federal estate tax, and a departing Canadian who stays a non-resident alien faces a federal exemption of only $60,000, covered in the $60,000 exemption guide. Ontario’s Estate Administration Tax runs roughly 1.5% above the first tier and only applies to assets passing through Ontario probate, a different mechanic from the US federal number.

What should I do before I sign anything in Miami?

Model the departure year on real numbers, not the headline rate gap, because a federal pension, deemed-disposition gains, and prior Florida winters each move the answer in a different direction. Pin the departure date first, since it decides which Ontario tax year absorbs the deemed disposition, then check the last few years of Florida day counts against the substantial presence test before assuming the move itself is what starts the US filing story.

• Moving from Canada to Florida, the province-agnostic version of this corridor
• Moving from Ottawa to Washington DC, the federal policy corridor
• Canada departure tax, T1161 and T1243
• Leaving Canada permanently, the full checklist
• RRSPs and TFSAs on a move to the US
• The substantial presence test, formula and day count
• The US estate tax and the $60,000 exemption
• Ottawa to Austin, the government-to-tech corridor into Texas
• Ottawa to Denver, the defence-to-aerospace corridor into Colorado
• Ottawa to Houston, the government-to-energy corridor into Texas

This guide is general information, not tax advice for your specific situation. Which points apply, and how, depends on your facts.