“Taxes have grown much more rapidly than any other single expenditure for the average Canadian family: expenditures on shelter increased by 1,880 percent, food by 870 percent, and clothing by 654 percent from 1961 to 2022,” said the report titled “Taxes versus the Necessities of Life: The Canadian Consumer Tax Index 2023.”
“The 2,778 percent increase in the tax bill has also greatly outpaced the increase in the Consumer Price Index (863 percent), which measures the average price that consumers pay for food, shelter, clothing, transportation, health and personal care, education, and other items.”
The report’s authors noted that part of the increase in Canadians’ tax bills reflected the effects of inflation. When adjusted to eliminate the portion of the increase that is due to the erosion of purchasing power, the inflation-adjusted Consumer Tax Index increased by 198.8 percent over the period.
According to the report, “Fraser Institute’s 2023 Consumer Tax Index,”—which calculated the total tax bill the average Canadian family paid to all levels of government—the average family had an income of $106,430 and paid total taxes equaling $48,199, meaning taxes were 43 percent of their income.
In 1961, the average Canadian family earned an income of $5,000 and paid $1,675 in taxes (33.5 percent).
The report noted that, in 1961, the family spent 56.5 percent of its income to pay for shelter, food, and clothing. By 1981, 40.5 percent of a family’s income was spent on necessities, while 40.8 percent went toward taxes.
The authors said if federal and provincial deficits were included in the calculations—which they referred to as “referred taxation”—the Canadian Consumer Tax Index would have increased to 2,967 percent.
