The average Canadian family paid $39,299 in taxes last year—more than housing, food and clothing combined
#LSN_Opinion Fraser Institute
Toronto, Ontario - August 4, 2019 (LSN) The average Canadian family spent more than 44 per cent of its income on taxes in 2018, 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—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.
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.
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).
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.
Moreover, since 1961, the average Canadian family’s total tax bill has increased by 2,246 per cent, dwarfing increases in annual housing costs (1,593 per cent), clothing (769 per cent) and food (639 per cent).
“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 coauthor.
- The Canadian Consumer Tax Index tracks the total tax bill of the average Canadian family from 1961 to 2018. Including all types of taxes, that bill has increased by 2,246% since 1961.
- Taxes have grown much more rapidly than any other single expenditure for the average Canadian family: expenditures on shelter increased by 1,593%, clothing by 769%, and food by 639% from 1961 to 2018.
- The 2,246% increase in the tax bill has also greatly outpaced the increase in the Consumer Price Index (750%), which measures the average price that consumers pay for food, shelter, clothing, transportation, health and personal care, education, and other items.
- The average Canadian family now spends more of its income on taxes (44.2%) than it does on basic necessities such as food, shelter, and clothing combined (36.3%). By comparison, 33.5% of the average family’s income went to pay taxes in 1961 while 56.5% went to basic necessities.
- In 2018, the average Canadian family earned an income of $88,865 and paid total taxes equaling $39,299 (44.2%). In 1961, the average family had an income of $5,000 and paid a total tax bill of $1,675 (33.5%).