Fraser Institute study finds that tax payments outweighed everyday essentials despite a COVID-driven reduction in tax revenue
The pandemic saw government revenues fall as shutdowns and reduced employment slashed the amount of taxes paid by households and businesses.
But for the average family, the government still took the largest single share of their income in 2020, according to a new analysis from the Fraser Institute.
It found that families spent 36.4% of their income on taxes last year, more than the 35.4% combined total for housing (including rent or mortgage payments), clothing, and food.
In dollar terms, the average Canadian family earned $96,333 and paid $35,047 in taxes and $34,105 for the basic necessities.
“Throughout the COVID pandemic, as tax revenues decreased for governments nationwide, taxes remained the largest household expense for Canadian families,” said Jake Fuss, economist at the Fraser Institute and co-author of Taxes Versus the Necessities of Life: The Canadian Consumer Tax Index, 2021 Edition.
The taxes paid include income, payroll, sales, property, carbon, health, fuel and alcohol taxes.
Increased tax bills
Fuss’ research shows that the average family’s tax bill has increased nominally since 1961 by a staggering 1,992%.
Meanwhile, annual housing costs have increased 1,671%, food costs are up 767%, and clothing has risen by 629%.
“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.
