Ottawa to Portland: Clean Energy, No Sales Tax, and Oregon's 9.9%

Portland's clean-energy sector, its semiconductor cluster, and Oregon's universities recruit Ottawa's energy-policy professionals, engineers, and researchers. The tax picture is a small cut: Ontario's combined top rate of about 53.5% becomes about 47% outside Multnomah County or about 51% inside Portland. Oregon has no sales tax.

Key takeaways

• Ontario's roughly 53.5% top rate, including the provincial surtax, sets the departure tax. On a $300,000 unrealized gain, about $80,000.
• Oregon's top rate is 9.9%; Portland's county and Metro taxes push the combined top rate near 51%.
• A Canadian public service pension paid to an Oregon resident is taxed federally with Canadian withholding capped at 15% under the treaty, and by Oregon at graduated rates.
• 13% HST becomes zero sales tax.
• OHIP ends on permanent departure. Oregon's estate tax exemption is $1 million.

The Ontario departure

Departure tax applies to non-registered investments, private company shares, crypto, and foreign property at fair market value on the departure date. Ontario real estate, RRSPs, TFSAs, and registered pensions are excluded. Report on Form T1243, list holdings on Form T1161 if the total exceeds $25,000. The Ontario surtax ends on departure. OHIP ends on permanent departure.

The federal pension

Under Article XVIII of the treaty, Canadian tax on periodic pension payments to a US resident is capped at 15%; file NR301 before the first post-departure payment. The US taxes the pension federally with a foreign tax credit. Oregon taxes the pension at graduated rates up to 9.9%, with no credit for the Canadian withholding. CPP and OAS are taxable only in the US.

Portland's side

Oregon's graduated state income tax tops out at 9.9% above roughly $125,000 (single); Portland residents in Multnomah County also pay the Preschool for All tax (1.5% above $125,000 single, 3% above $250,000) and the Metro Supportive Housing Services tax (1% above $125,000), which together push the combined federal, state, and local top rate near 51%; no sales tax anywhere in Oregon; property tax near 1% effective; estate tax on estates above $1 million with rates from 10% to 16%.

The RRSP in Oregon

Federally deferred under Article XVIII of the treaty and deferred for Oregon because the state starts from federal taxable income. Withdrawals face 25% Canadian withholding on lump sums, 15% on periodic RRIF payments within the treaty limit, a US foreign tax credit federally, and Oregon's graduated rates.

Who makes this move

NRCan and federal energy-policy professionals to Portland's clean-energy firms and utilities, Ottawa engineers to Intel Hillsboro and the semiconductor cluster, federal researchers to Oregon's universities, and Ottawa IT staff to Portland's tech employers.

Worked example

A former NRCan engineer moves to Hillsboro on August 31 with $150,000 of unrealized gain in a non-registered account, $450,000 in an RRSP, and a Kanata home sold in the departure year.

• Departure tax. $150,000 gain, $75,000 taxable, at about 53.5%: roughly $40,000.
• Home. Sold as a resident under the principal residence exemption.
• RRSP. No tax on departure; federal and Oregon deferral.
• Hillsboro. Combined top rate about 47%. HST 13% becomes sales tax zero.

Official sources

"Pensions may also be taxed in the Contracting State in which they arise and according to the laws of that State; but if a resident of the other Contracting State is the beneficial owner of a periodic pension payment, the tax so charged shall not exceed 15 per cent of the gross amount of such payment." — Canada-United States Tax Convention, Article XVIII(2)(a), https://www.canada.ca/en/department-finance/programs/tax-policy/tax-treaties/country/united-states-america-convention-consolidated-1980-1983-1984-1995-1997.html

"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

"…plus 9.9% of the excess over $125,000." — Oregon Department of Revenue, 2025 tax rate charts, Form OR-40, https://www.oregon.gov/dor/programs/individuals/pages/pit.aspx

Income over $125,000 is taxed at rate of 1.5% and an additional 1.5% (3% total) on income over $250,000. — Multnomah County, Preschool for All Personal Income Tax, https://www.multco.us/finance/preschool-all-personal-income-tax

Practitioner note

Ottawa retirees moving to Oregon face a state that taxes the federal pension at up to 9.9% and has a $1 million estate exemption with no portability. Oregon is one of the less favourable states for a Canadian federal pensioner, and the client should know that before choosing it over Washington across the river.

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

Next step

Fairlight prepares the Ontario departure return, the pension withholding paperwork, and the first-year federal, Oregon, and local returns for Portland clients. See cross-border pricing or book a call.