Canadians pay more in taxes than for basic necessities, study says

The most recent edition of the Canadian Consumer Tax Index by the Fraser Institute says Canadians pay more in taxes than they spend on housing, food and clothing combined.

“We add up all the taxes that people pay, from income taxes to payroll taxes to sales taxes and others, to come up with the total amount that the typical Canadian family pays in taxes,” says Ben Eisen, the Institute’s Director of Provincial Prosperity Studies and co-author of the index. “What we find is that’s 42% of their income last year.”

In comparison, the study found that the average family spends 37.6 percent on basic necessities. That works out to $34,145 in taxes paid and $30,293 spent on housing, food and clothing.

Eisen says the study’s aim is to provide taxpayers with a detailed picture of their tax burden.

“It’s very difficult to keep track of every dollar that goes to taxes because we see some of it, in our paycheques and on our income tax. Others, like sales taxes and fuel taxes, we pay those throughout the year and we don’t necessarily know what it adds up to.”

Even accounting for inflation, Eisen says the average tax bill has gone up nearly 153 percent since 1961. Back then, the average Canadian family paid 33.5 percent in taxes and 56.5 percent on necessities.

But comparing 2015 to 1961 might not tell the whole story. Universal health care wasn’t introduced until 1968 and other social programs, such as paid parental leave, were also non-existent.

Eisen admits that government spending has increased along with taxation but the study did not make that comparison.

He says Canadians have one of the biggest tax burdens in the world.

“There’s some key taxes where Canadians are among the highest taxed in the world. Personal income taxes in Canada, recent analysis shows, are among the highest in the OECD and among the highest in the G7. [But] we don’t have comparable data for countries like the Netherlands or France that would allow a real apples to apples comparison.”