Calgary to Detroit: Energy to the EV Transition, and Michigan's Flat 4.25% Plus City Tax

The EV transition has pulled Calgary's engineers and project managers into Detroit's automakers, suppliers, and battery plants. The tax picture is a moderate cut: Alberta's combined top rate of about 48% becomes about 41.25% in most of Michigan, or 43.65% inside Detroit. Which suburb you live in decides the difference.

Key takeaways

• Alberta's roughly 48% top rate sets the departure tax. On a $300,000 unrealized gain, about $72,000.
• Michigan's flat 4.25% plus Detroit's 2.4% resident city tax; most suburbs have no city tax.
• Michigan follows the treaty's RRSP deferral.
• Alberta's 5% GST becomes a flat 6% sales tax.
• Michigan property tax is far higher than Alberta's. AHCIP ends on permanent departure.

The Alberta departure

Departure tax applies to non-registered investments, private company shares, crypto, and foreign property at fair market value on the departure date. Alberta real estate, RRSPs, TFSAs, and pensions are excluded. Report on Form T1243, list holdings on Form T1161 if the total exceeds $25,000, and post security under Form T1244 for illiquid assets. A Calgary corporation is deemed sold and becomes a US controlled foreign corporation after the move; wind it up before you go.

Detroit's side

Michigan's flat 4.25% state income tax; Detroit's 2.4% city income tax on residents (1.2% on non-residents who work in the city), with most suburbs (Troy, Novi, Birmingham, Ann Arbor) charging none; 6% sales tax with no local additions; property tax among the higher effective rates in the US, softened by the Principal Residence Exemption and a taxable-value growth cap; no estate tax.

The RRSP in Michigan

Federally deferred under Article XVIII of the treaty and deferred for Michigan because the state starts from federal AGI. Withdrawals face 25% Canadian withholding on lump sums, 15% on periodic RRIF payments within the treaty limit, a US foreign tax credit federally, and Michigan's 4.25%. Michigan phases in a retirement income deduction by birth year that can cover RRIF income.

Who makes this move

Calgary controls and systems engineers to the Detroit automakers and suppliers, Alberta project managers to the EV and battery plants, and Calgary energy analysts to the automakers' electrification and energy groups.

Worked example

A Calgary controls engineer moves to Novi on August 31 with $180,000 of unrealized gain in a non-registered account, $450,000 in an RRSP, and a Calgary home sold in the departure year.

• Departure tax. $180,000 gain, $90,000 taxable, at about 48%: roughly $43,000.
• Home. Sold as a resident under the principal residence exemption.
• RRSP. No tax on departure; federal and Michigan deferral.
• Novi. Salary taxed at 4.25% state; no city tax. Combined top rate about 41.25%. GST 5% becomes sales tax 6%.

Official sources

"When you leave Canada, you are considered to have sold certain types of property (even if you have not sold them) at their fair market value (FMV) and to have immediately reacquired them for the same amount. This is called a deemed disposition and you may have to report a capital gain (also known as departure tax)." — Canada Revenue Agency, Leaving Canada (emigrants), https://www.canada.ca/en/revenue-agency/services/tax/international-non-residents/individuals-leaving-entering-canada-non-residents/leaving-canada-emigrants.html

Michigan's individual income tax rate and the list of cities that impose a city income tax are published by the Michigan Department of Treasury. — Michigan Department of Treasury, City Income Tax, https://www.michigan.gov/taxes/citytax

Alberta's top personal income tax bracket: "15%" on "$362,961.01 and up" (2025). — Government of Alberta, Personal income tax, https://www.alberta.ca/personal-income-tax

Practitioner note

The Alberta-to-Detroit decision that moves the most money is the address: Detroit's 2.4% city tax on a $200,000 salary is $4,800 a year that Troy or Novi does not charge. We run the city and property tax by address before the client signs a lease.

See also: Weighing Florida instead? See the Canada-to-Florida guide, or the same city's Calgary to Miami guide.

Next step

Fairlight prepares the Alberta departure return, the corporate wind-up, and the first-year federal, Michigan, and city returns for Detroit-area clients. See cross-border pricing or book a call.