Taxes eat up more than 44% of Canadian family income: report

Taxes – not life’s basic necessities – remain the largest household expense for families across the country

Taxes are once again expected to be a federal election issue in October, if a national think tank gets its way.

A report released Thursday by the Fraser Institute, a Canadian public policy think tank, says Canadian families on average spent more than 44 per cent of its income on taxes in 2018 – more than housing, food and clothing costs combined.

Last year, the average Canadian family earned $88,865 and paid $39,299 in taxes compared to $32,214 on the basic necessities — housing (including rent and mortgage payments), food and clothing combined, said the report.

Finn Poschmann
Finn Poschmann

“In other words, the average Canadian family spent 44.2 per cent of its income on taxes compared to 36.3 per cent on basic necessities. This is a dramatic shift since 1961, when the average Canadian family spent much less of its income on taxes (33.5 per cent) than the basic necessities (56.5 per cent),” said the Fraser Institute.

It said the total tax bill includes visible and hidden taxes paid to the federal, provincial and local governments, including income, payroll, sales, property, carbon, health, fuel, alcohol taxes and more.

Since 1961, the average Canadian family’s total tax bill has risen much faster than increases in annual housing costs, clothing and food , the Fraser Institute stated.

“Taxes – not life’s basic necessities – remain the largest household expense for families across the country,” said Finn Poschmann, resident scholar at the Fraser Institute, citing the Canadian Consumer Tax Index, which tracks the total tax bill of the average Canadian family from 1961 to 2018.

“Of course, taxes help fund important public services, but with more than 44 per cent of their income going to taxes, Canadians might wonder whether they’re getting good value for their tax dollars,” said Jake Fuss, a Fraser Institute economist and study co-author.

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