The average Canadian family spends more on taxes than on food, clothing and shelter combined, finds a new study released on Thursday by the Vancouver-based Fraser Institute, an independent, Canadian public policy think-tank.
“Over the past five decades, the tax bill for the average Canadian family has ballooned, and now the amount of money going to taxes is greater than what’s spent on life’s basic necessities,” says Charles Lammam, director of fiscal studies at the Fraser Institute and co-author of the Canadian Consumer Tax Index, which tracks the total tax bill of the average Canadian family from 1961 to 2014.
In 2014, the average Canadian family (including unattached Canadians) earned $79,010 and paid $33,272 in total taxes compared to $28,887 on food, clothing and shelter combined.
In other words, 42.1% of income went to taxes while 36.6% went to basic necessities.
This represents a marked shift since 1961, when the average family spent 33.5% on taxes and 56.5% on food, clothing and shelter.
The total tax bill reflects both visible and hidden taxes that families pay to the federal, provincial and local governments, the study notes, including income taxes, payroll taxes, sales taxes, property taxes, health taxes, fuel taxes, alcohol taxes, and more.
Since 1961, the average Canadian family’s total tax bill increased by 1,886%, dwarfing increases in annual food costs (561%), clothing (819%) and shelter (1,366%).
“With growth in the total tax bill outpacing the cost of basic necessities, taxes now eat up more family income, so families have less money available to spend, save or pay down household debt,” Lammam says.
Even after accounting for changes in overall prices (inflation) over the 53-year period, the tax bill shot up 149.2%, the study notes.