Average Canadian household spends almost half its income on taxes: Fraser Institute
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Taxes are the largest household expense for families in Canada.
Taxes are the largest household expense for families in Canada.
A new study by Fraser Institute, a right-leaning think tank, reveals the average household spent 43 per cent of its income on taxes alone in 2023.
"It was so surprising to me the results of that study because so many of those taxes were hidden," said financial planner and CEO of Black Star Wealth Wendy Brookhouse. "You don't even realize they're adding up."
According to the study, the average family earned approximately $109,235 last year and spent $46,988 on taxes. Going back to 2000, the average income was around $54,488, with $25,259 spent on taxes. The study looked at numbers dating back to 1961, when the average income was $5,000 and taxes were $1,675 or approximately a third of earnings.
"It's not only income taxes. It's also payroll taxes, sales taxes, fuel taxes when you're filling up at the pump. Property taxes as well," said Jake Fuss, fiscal studies director with Fraser Institute.
The amount people spent on taxes last year is more than they spent on housing, food and clothing combined. On average, shelter cost $23,809 while food was $12,607 and clothing cost $2,514.
"Lives for Canadians right now are so unaffordable," said Jay Goldberg, the interim Atlantic director for the Canadian Taxpayers Federation. "We have statistics that have come out quite recently saying that 50 per cent of Canadians are $200 away from not being able to pay their bills and this is a big reason why."
