Average Canadian Family Tax Spending: Where is the value?


Many Canadians would be surprised to know that the average family spends more on taxes than basic necessities (defined as rent and mortgage payments, food, clothing, energy costs, etc.).


According to a report by The Fraser Institute, Canadian families spend 42% of their income on taxes (this should be understood as the overall tax bill accounting for federal, provincial and local taxes, including income, payroll, sales and property taxes). Canadians’ tax bill has risen over 2,000% since 1961, and at a much faster rate than the price of many consumer products. Concurrently, the Consumer Price Index (which measures the average price that consumers pay for food, shelter, clothing, transportation, health and personal care, education, and other items) increased by only 718% over the same period.


The current tax bill represents a large scale shift from the early 1960s, when the average Canadian family spent around a third of its income on taxes and nearly two-thirds of it on food, clothing, housing, etc.


While the current 42% is lower than overall family tax spending in the late 1990s it still presents a problem. The difference in the amounts between tax spending and spending on basic necessities amounts essentially to a deferred tax and presents a problem for families looking to save for retirement, education and wanting to pay down household debt.


For the average Canadian family earning $83,000 per year and paying out $35,000 in taxes the question goes beyond just the financials and becomes one of value. For the amount spent on taxes do Canadians feel they are getting good value?

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