The Fraser Institute

The Fraser Institute

August 27, 2015 05:30 ET

The Fraser Institute: Average Canadian Family Spends More on Taxes Than Basic Necessities

VANCOUVER, BRITISH COLUMBIA--(Marketwired - Aug. 27, 2015) - The average Canadian family spends more on taxes than on food, clothing and shelter combined, finds a new study released today by the Fraser Institute, an independent, non-partisan Canadian public policy think-tank.

"Over the past five decades, the tax bill for the average Canadian family has ballooned, and now the amount of money going to taxes is greater than what's spent on life's basic necessities," said Charles Lammam, director of fiscal studies at the Fraser Institute and co-author of the Canadian Consumer Tax Index, which tracks the total tax bill of the average Canadian family from 1961 to 2014.

In 2014, the average Canadian family (including unattached Canadians) earned $79,010 and paid $33,272 in total taxes compared to $28,887 on food, clothing and shelter combined.

In other words, 42.1 per cent of income went to taxes while 36.6 per cent went to basic necessities.

This represents a marked shift since 1961, when the average family spent 33.5 per cent on taxes and 56.5 per cent on food, clothing and shelter.

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

Since 1961, the average Canadian family's total tax bill increased by 1,886 per cent, dwarfing increases in annual food costs (561 per cent), clothing (819 per cent) and shelter (1,366 per cent).

"With growth in the total tax bill outpacing the cost of basic necessities, taxes now eat up more family income, so families have less money available to spend, save or pay down household debt," Lammam said.

Even after accounting for changes in overall prices (inflation) over the 53-year period, the tax bill shot up 149.2 per cent.

"While taxes help fund important government services, the issue is the amount of taxes that governments take compared to what we get in return. With 42 per cent of income going to taxes, Canadians might wonder whether they're getting the best value for their tax dollars," Lammam said.

Check out this short animated video explaining how the average family's tax bill has changed since 1961.

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The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit www.fraserinstitute.org

Contact Information

  • Media Contacts:
    Charles Lammam
    Director of Fiscal Studies
    Fraser Institute

    Ben Eisen
    Senior Policy Analyst
    Fraser Institute

    For media interviews please contact:
    Aanand Radia
    Media Relations Specialist, Fraser Institute
    (416) 363-6575 ext. 238
    aanand.radia@fraserinstitute.org
    @FraserInstitute