Canadian Manufacturing

Taxes largest Canadian household expense, says Fraser Institute

According to a new study, Canadians fork over 42.5 per cent of household income to taxes as opposed to 37.4 per cent for housing, food and clothing; a figure the think tank says represents a substantial jump from the 1960s


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VANCOUVER—The average Canadian family spent more on taxes in 2016 than housing, food and clothing combined, according to a new study by the right leaning Fraser Institute.

“Many Canadians may think housing is their biggest household expense, but in fact the average Canadian family spent more on taxes last year than on life’s basic necessities — including housing,” said Charles Lammam, director of fiscal studies at the Fraser Institute and co-author of the Canadian Consumer Tax Index—which tracked the total tax bill of the average Canadian family from 1961 to 2016.

The report says that last year the average Canadian family earned $83,105 and paid $35,283 in total taxes, compared to $31,069 on housing (including rent and mortgage payments), food and clothing combined.

It also states that the average Canadian family paid 42.5 per cent of their income in taxes in 2016, compared to 37.4 per cent for food, clothing and housing.

Fraser says this represents a marked shift since 1961, when the average Canadian family spent much less on taxes (33.5 per cent) than on food, clothing and housing (56.5 per cent).

The think tank asserts that the total tax bill reflects both visible and hidden taxes that families pay to the federal, provincial and local governments including income, payroll, sales, property, carbon, health, fuel and alcohol taxes.

The report finds that the jump from 1961 levels represents a 2,006 per cent increase in the average Canadian tax bill. For comparison, housing costs have risen 1,527 per cent, clothing, 677 per cent, and food, 639 per cent. Taking inflation into account, Fraser says the increase in tax bills still works out to 157.6 per cent over the period.

“Taxes help fund important public services that Canadians rely on, but the issue is the amount of taxes governments take compared to what Canadians get in return,” Lammam said. “With more than 42 per cent of their income going to taxes, Canadians might ask whether they’re getting good value for their tax dollars.”


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