TORONTO – Canadians retain just 21% of their income after paying the taxman and covering the cost of necessities, according to a Fraser Institute study.
Taxes gobble up a whopping 42% of the average Canadian family’s income. About 37% of income goes to cover housing, food and clothing.
“We’ve found … that over the last five decades or so, the tax bill for the average Canadian family has grown dramatically,” said study coauthor Charles Lammam.
The study took into account taxes paid to federal, provincial and municipal governments. It found that the average Canadian family spent 21% of its income on housing, 11% on food and 5% on clothing.
According to the study:
* Taxes have grown much more rapidly than any other single expenditure for the average Canadian family, i n c r e a sing by 1,886% from 1961 to 2014.
* Expenditures on shelter increased by 1,366%, clothing by 819%, and food by 561% during the same time period.
* Tax increases also greatly outpaced the increase in the Consumer Price Index –a measure of the average that consumers pay for food, shelter, clothing, transportation, education and other items–which grew by 697% from 1961 to 2014.
* In 1961, 33.5% of an average family’s income went to pay taxes and 56.5% was allocated for basic necessities.
* In 2014, the average Canadian family earned an income of $79,010 and paid taxes of $33,272 to all levels of government. In 1961, the average family had an income of $5,000 and paid $1,675 in taxes.
TAX BILL OF THE AVERAGE CANADIAN FAMILY (FAMILIES AND UNATTACHED INDIVIDUALS), 2014
In dollars ($) As % of total taxes
Income taxes 10,166 30.6%
Payroll & health taxes 7,158 21.5%
Sales taxes 4,806 14.4%
Property taxes 3,478 10.5%
Profit tax 3,591 10.8%
Liquor, tobacco, amusement, & other excise taxes1,763 5.3%
Auto, fuel, & motor vehicle licence taxes 834 2.5%
Other taxes 803 2.4%
Natural resource taxes 405 1.2%
Import duties 268 0.8%
Total taxes $33,272
Total cash income $79,010
Taxes as a percentage of cash income 42.1%
Source: The Fraser Institute’s Canadian Tax Simulator, 2015