Fraser Institute calculates when Canadians would be free of tax burden
Imagine a tax system where every cent earned during the first part of the year was automatically paid in taxes, with the remaining income tax free.
That’s the premise of Tax Freedom Day, calculated every year by the Fraser Institute assuming that all taxes including those due to federal, provincial, and municipal governments were paid upfront before Canadians are free of paying taxes.
This year, it came four days later than in 2019, the last year before the pandemic, although six days earlier than in 2023, but for taxpayers in three provinces we are not there yet.
June 13 was the national Tax Freedom Day, with those in Ontario (June 10), Alberta (June 8), BC (June 4), Saskatchewan (June 2), and Manitoba (May 26) having got there earlier than that and New Brunswick and PEI getting there on June 15. But for those in Nova Scotia (June 22), Quebec (June 27), and Newfoundland & Labrador (June 30) they would still be working to pay their taxes for longer.
The analysis shows that the average Canadian family (with two or more people) will pay $65,766 in total taxes in 2024, accounting for almost 45% of its annual income ($147,570). The taxes include income taxes, payroll taxes (including the Canada Pension Plan), health taxes, sales taxes (like the GST), property taxes, fuel taxes, carbon taxes, “sin” taxes and more.
The report warns of the potential tax implications in future years resulting from the federal and provincial governments’ forecasted $70 billion in deficits for 2024.
“If Canadians paid all their taxes up front, they would work the first 164 days of this year before bringing any money home for themselves and their families,” said Jake Fuss, Director of Fiscal Studies at the Fraser Institute. “Canadians need to decide for themselves whether they are getting their money’s worth when it comes to how governments are spending their tax dollars.”
