Fraser Forum

Tax burden for Nova Scotian families continues to grow

Printer-friendly version
Tax burden for Nova Scotian families continues to grow

Nova Scotian families face a significant tax burden each year. In addition to income taxes, Nova Scotians also pay sales taxes, carbon taxes, property taxes and many other types of taxes. This can make it difficult to know how much families pay in total taxes each year. Fortunately, a concept known as Tax Freedom Day sheds light on just how much the average family in the province is paying.

Tax Freedom Day is the day in the year when the average family in Nova Scotia has earned enough money to pay all taxes levied by the federal, provincial and local governments. In other words, if Nova Scotians paid all their taxes up front beginning Jan. 1, they would have to pay every dollar they earned until Tax Freedom Day, which this year was June 18. This is the fourth-latest Tax Freedom Day in Canada (behind only Newfoundland and Labrador, Quebec and Saskatchewan).

Nova Scotia is also one of only two provinces to have a later Tax Freedom Day in 2023 than last year. And June 18 marks the latest Tax Freedom Day in the province since 2005 and is 10 days later than the 2019 Tax Freedom Day (June 8). Simply put, the tax burden for Nova Scotian families is growing.

More specifically, according to a study published by the Fraser Institute, in 2023 the average Nova Scotia family (two or more people) will earn an estimated $118,142 and pay $54,212 in total taxes—or 45.9 per cent of its income. If this family paid all taxes for 2023 upfront, they would pay the government every dollar earned until June 18. After working the first 168 days of the year for the government, only then can the average family in Nova Scotia start working for themselves.

Moreover, the tax bill (again, for average families) in Nova Scotia increased by 3.7 per cent (almost $2,000) this year while the average family’s income grew by only 2.4 per cent.

It’s also worth noting that Nova Scotia has some of the highest personal income tax rates in North America across a variety of income levels. For incomes at $50,000, Nova Scotians are taxed at the second-highest rate in the country (14.95 per cent) behind only Quebec. Nova Scotia also has the highest tax rate at income above $150,000 (21 per cent). For comparison, Alberta taxes income at 10 per cent for incomes at $50,000 and 14 per cent at incomes at $300,000. This helps explain why Nova Scotia has a Tax Freedom Day four days later than Alberta.

Finally, the Houston government projects a budget deficit this year and further deficits until at least 2026/27. Deficits today will likely result in higher taxes in the future. To help appreciate the size of the debt burden being passed on, the study also calculates a “balanced budget” Tax Freedom Day for Nova Scotia—that is, if the federal government and the provincial government had to raise taxes today to balance their budgets (instead of financing their spending by borrowing) Tax Freedom Day in Nova Scotia would fall 10 days later on June 28.

With Tax Freedom Day in Nova Scotia falling two days later than last year, the burden of taxation is clearly mounting on families. Unfortunately, until the province controls spending and begins to reduce taxes, Nova Scotia can only expect a later Tax Freedom Day in the future.

Subscribe to the Fraser Institute

Get the latest news from the Fraser Institute on the latest research studies, news and events.