Average Canadian household pays 43% of income on taxes— only 35.6% on basic necessities

In a recent report, the Fraser Institute revealed that the average Canadian family is spending 43 percent of its annual income on taxes and just 35.6 percent on basic necessities like food and shelter.

The independent economic think tank examined how the tax burden on Canadian families has shifted from 1961 to 2024. The tax bill has jumped by 2,705 percent, according to the report, which found that an average household earned an income of $109,235 and paid $46,988 in total taxes.

"Taxes remain the largest household expense for families in Canada," said Jake Fuss, director of Fiscal Studies at the Fraser Institute and co-author of Taxes versus the Necessities of Life: The Canadian Consumer Tax Index 2024 Edition.

Taxes have increased at a faster rate than any other expense, while the cost of shelter has grown by 2,006%, food by 901%, and clothing by 478% since 1961.

In 1961, 33.5 percent of a family income was reserved for taxes while 56.5 percent went to basic necessities.

The total tax bill for Canadians includes visible and hidden taxes (paid to the federal, provincial and local governments) including income, payroll, sales, property, carbon, health, fuel and alcohol taxes. 

The report recorded food, shelter and clothing as basic necessities. While Canadians are spending 21.8 percent and 11.5 percent on their income on housing and groceries, they spend only 2.3 percent on clothing. The remainder of the income pie – 21.3 percent – is devoted to "Other" expenses that include education, transportation, recreation and entertainment that includes tobacco and alcohol. 

"Considering the sheer amount of income that goes towards taxes in this country, Canadians may question whether or not we're getting good value for our money," Fuss said in a news release.