NCPA - National Center for Policy Analysis


July 21, 2008

For most Canadians, filing income taxes provides a sobering reminder of just how much income tax they paid last year, say the Fraser Institute's Niels Veldhuis and Milagros Palacios.  However, the reality is that income taxes form only a portion of the total tax bill imposed on Canadians by the governments -- federal, provincial and local. 

For example:

  • In 2007, the average Canadian family consisting of two or more people earned approximately $83,775 in income, and paid $13,510 in income taxes, representing 16.1 percent of their income.
  • In addition to income taxes, the average Canadian family paid some $8,045 in Canada Pension Plan (CPP), Employment Insurance (EI), and health care taxes in 2007.
  • The average family also paid about $2,888 in property taxes in 2007.
  • Although sales tax totals are difficult to estimate, the average family pays about $6,070 a year in sales tax -- almost 16 percent of their total tax bill.

In addition, there are a host of taxes that Canadians pay but do not see:

  • For instance, profit taxes amounting to approximately $3,440 were assessed indirectly on average Canadian families.
  • Taxes on liquor, tobacco and amusement amounted to an additional $2,320 for the average family.
  • Automobile and gas taxes add another $975.
  • Import duties tacked on about $320 for the average family.

To sum it all up, say Veldhuis and Palacios:

  • The average Canadian family faced a tax bill of $38,992 in 2007, against an income of $83,775.
  • Total taxes imposed on the average family consumed an astonishing 46.5 percent of income.
  • Average families hand over nearly half of their income to Canadian governments.

Source: Niels Veldhuis and Milagros Palacios, "Income Taxes Just a Fraction of Canadians' Total Tax Bill," Fraser Institute, May 2008.


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