Study
| EST. READ TIME 1 MIN.Even with a substantial COVID-driven reduction in tax revenue, the average Canadian family paid more in taxes than it did on housing, food and clothing combined
Taxes versus the Necessities of Life: The Canadian Consumer Tax Index 2021 Edition
Summary
- The Canadian Consumer Tax Index tracks the total tax bill of the average Canadian family from 1961 to 2020. Including all types of taxes, that bill has increased by 1,992% since 1961.
- Taxes have grown much more rapidly than any other single expenditure for the average Canadian family: expenditures on shelter increased by 1,671%, clothing by 629%, and food by 767% from 1961 to 2020.
- The 1,992% increase in the tax bill has also greatly outpaced the increase in the Consumer Price Index (773%), which measures the average price that consumers pay for food, shelter, clothing, transportation, health and personal care, education, and other items.
- The average Canadian family now spends more of its income on taxes (36.4%) than it does on basic necessities such as food, shelter, and clothing combined (35.4%). By comparison, 33.5% of the average family’s income went to pay taxes in 1961 while 56.5% went to basic necessities.
- In 2020, the average Canadian family earned an income of $96,333 and paid total taxes equaling $35,047 (36.4%). In 1961, the average family had an income of $5,000 and paid a total tax bill of $1,675 (33.5%).
- This bulletin shows a sharp drop-off in the tax bill from 2019 to 2020. However, this is a temporary and isolated incident that is entirely due to the economic and fiscal circumstances of the COVID-19 pandemic.
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Jake Fuss
Director, Fiscal Studies, Fraser InstituteJake Fuss is Director of Fiscal Studies for the Fraser Institute. He holds a Bachelor of Commerce and a Master’s Degree inPublic Policy from the University of Calgary. Mr. Fuss has written commentaries appearing in major Canadian newspapers including the Globe and Mail, Toronto Sun, and National Post. His research covers a wide range of policy issues including government spending, debt, taxation, labour policy, and charitable giving.… Read more Read Less… -
Leo Plumer
Research Intern, Fraser InstituteLeo Plumer is a Research Intern at the Fraser Institute, where he works with the team in fiscal policy, witha focus on social insurance. He was previously an MA Fellow at the Mercatus Center at George Mason University, where he also completed a Master’s in Economics. Leo also holds a Bachelor’s in Political Science and Economics from McGill University.… Read more Read Less…
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