The Fraser Institute

The Fraser Institute

April 28, 2009 06:00 ET

The Fraser Institute: Canadian Families Paying More in Taxes Than They Do for Food, Clothing, and Shelter Combined

VANCOUVER, BRITISH COLUMBIA--(Marketwire - April 28, 2009) - The average Canadian family spends nearly half its total income on taxes, more than it spends on food, clothing, and shelter, according to a new study from independent research organization the Fraser Institute.

The Canadian Consumer Tax Index 2009 shows that even though the income of the average Canadian family has increased significantly since 1961, their total tax bill has increased at a much higher rate.

- In 2008, the average Canadian family earned an income of $71,764 and paid total taxes equaling $31,535-43.9 per cent of its income.

- In 1961, the average Canadian family earned an income of $5,000 and paid $1,675 in total taxes-33.5 per cent of its income.

"Canadian families have seen their total tax bill increase by an astounding 1,783 per cent over the past 47 years," said Niels Veldhuis, the study's co-author and the Institute's director of fiscal studies.

"The tax burden faced by Canadians extends well beyond income tax. When you add up all the taxes Canadians pay to all levels of government, the typical family is sending more of its income to government than it spends on basic necessities such as food, clothing, and housing."

The Canadian Consumer Tax Index calculates the total tax bill of the typical Canadian family by adding up the various taxes that the family pays to federal, provincial, and local governments. These include direct taxes such as income taxes, sales taxes, Employment Insurance and Canadian Pension Plan contributions, as well as "hidden" taxes such as import duties, excise taxes on tobacco and alcohol, amusement taxes, and gas taxes.

"At this time of year, most Canadians are focussed on filing their income tax returns. But personal income taxes account for just 33 per cent of the total tax bill paid by the average Canadian family in 2008," Veldhuis said.

The Canadian Consumer Tax Index attempts to answer the question: How has the tax burden of the average family changed since 1961?

In 1961, the average family had to spend 56.5 per cent of their cash income to obtain food, clothing, and housing. In the same year, 33.5 per cent of the family's income went to governments as tax.

By 1981, the situation had been reversed; governments took 40.8 per cent of the income in the form of taxes, while the family used 40.5 per cent to buy food, clothing and housing.

By 2008, the average family was giving 43.9 per cent of its income to governments for taxes while using 35.7 per cent of its income to buy the necessities of life-food, clothing, and housing.

Since 1961, the total tax bill for the average Canadian family has increased 1,783 per cent. By comparison, the cost of housing has increased 1,218 per cent, the cost of food 532 per cent, and the cost of clothing has increased 536 per cent since 1961.

"Over the past 47 years, the amount of money the average Canadian family pays in taxes has grown more rapidly than any other expenditure, to the point where taxes are now a family's single largest expense," Veldhuis said.

The Fraser Institute is an independent research and educational organization with locations across North America and partnerships in more than 70 countries. Its mission is to measure, study, and communicate the impact of competitive markets and government intervention on the welfare of individuals. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit

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