Canadian families spent 42% of annual income on taxes last year

This is a dramatic shift from 1961 when Canadian families spent 33 % of their income on taxes

  • Sep. 3, 2020 8:00 a.m.
Jake Fuss holds a Bachelor of Commerce and a Master’s Degree in Public Policy from the University of Calgary. (Fraser Institute photo)

Jake Fuss holds a Bachelor of Commerce and a Master’s Degree in Public Policy from the University of Calgary. (Fraser Institute photo)

The average Canadian family spent more than 42 per cent of its income on taxes in 2019—more than housing, food and clothing costs combined, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

“Taxes remain the largest household expense for families in Canada,” said Jake Fuss, economist at the Fraser Institute and co-author of The Canadian Consumer Tax Index, 2020.

Last year, the average Canadian family earned $91,535 and paid $38,963 in taxes compared to $33,178 for the basic necessities—housing (including rent and mortgage payments), food and clothing combined.

In other words, the average Canadian family spent 42.6 per cent of its income on taxes compared to 36.2 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).

The total tax bill for Canadians includes visible and hidden taxes (paid to the federal, provincial and local governments) including income, payroll, sales, property, carbon, health, fuel and alcohol taxes.

Moreover, since 1961, the average Canadian family’s total tax bill has increased nominally by 2,226 per cent, dwarfing increases in annual housing costs (1,641 per cent), clothing (793 per cent) and food (663 per cent).

“Considering the sheer amount of income that goes towards taxes in this country, Canadians may question whether or not we’re getting good value for our money,” Fuss said.

Headquartered in Vancouver, Fraser Institute research is independently conducted. The institute produces research about government actions in areas that deeply affect Canadians’ quality of life such as taxation, health care, aboriginal issues, education, economic freedom, energy, natural resources and the environment. Its research is peer-reviewed and overseen by an Editorial Advisory Board of leading international scholars.

Jake Fuss is an economist at the Fraser Institute.

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