The average Canadian spent more on taxes last year than they did on basic amenities such as shelter, groceries and clothing combined, according to a new report.
“Taxes remain the largest household expense for families in Canada,” said study co-author Jake Fuss, director of fiscal studies at the Fraser Institute.
The average Canadian family earned an income of $109,235 in 2023 but were also forced to fork over $46,988 in total taxes, meaning that 43% of income is lost to taxation, higher than the 35.6% Canadians spend on basic necessities.
The report, Taxes versus the Necessities of Life: The Canadian Consumer Tax Index 2024 Edition, noted the dramatic spike in taxation over the past 60 years.
The average Canadian family only spent 33.5% of its income on taxes in 1961 and 56.5% on basic necessities.
However, taxes have rapidly outpaced any other single expenditure for the average Canadian family, with the average family tax bill having increased by 2,705% since 1961.
Annual housing costs increased over that time period as well, but remained 700% lower than the increase in taxation.
Food has increased by 901% and clothing by 478% since 1961.
“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,” said Fuss.
The study defined Canadians’ total tax bill as money paid in the combination of federal and provincial taxes, including income taxes, payroll taxes, health taxes, sales taxes, property taxes, fuel taxes, carbon taxes, vehicle taxes, import taxes, alcohol and tobacco taxes, “and the list goes on.”
“Canadians pay too much tax because politicians and government bureaucrats waste too much money,” Franco Terrazzano, federal director for the Canadian Taxpayers Federation told True North.
According to a separate study released by the Fraser Institute in June, it takes the average Canadian family five to six months to pay off their total tax bill before they can begin earning money for themselves.
The think tank refers to this day as “Tax Freedom Day,” referring to how income would work if all taxes were paid up front.
For the average family, it wouldn’t be until mid-June that its income could actually be taken home.
“If the average Canadian family had to pay its taxes up front, it would have worked until June 12 to pay the total tax bill imposed on it by all three levels of government,” reads the institute’s Tax Freedom Day report.
The federal government commissioned several focus groups ahead of its 2024 budget to see what Canadians thought needed to change going forward.
Among the recommendations, Canadians had for the Liberals’ federal budget was to cut taxes, particularly the carbon tax.
Despite the fact that the focus groups, made up of Canadians from various backgrounds, provinces, and socioeconomic levels were commissioned by Finance Canada to get an understanding of Canadians’ needs, their recommendations were ultimately ignored and taxes increased.
“The results show that the tax burden faced by the average Canadian family has risen compared with 62 years earlier. The total tax bill, which includes all types of taxes, has increased by 2,705% since 1961, and the tax bill has grown more rapidly than any other single expenditure item,” concluded the Fraser Institute study.
Terrazzano said that the less politicians spend, the more affordable life will become for citizens.
“Canadians are struggling and politicians should make life more affordable by taking less money from our wallets,” he said. “We need politicians to put down the taxpayer credit card and pick up some scissors.”
