Fraser Forum

Atlantic Canadians feel overtaxed—and believe governments are underdelivering

Printer-friendly version
Atlantic Canadians feel overtaxed—and believe governments are underdelivering

It’s tax time again. And Atlantic Canada is the most heavily taxed region in Canada, with some of the highest tax rates on personal income, goods and services and businesses. The result? Economic stagnation and growth in the size of government, along with a relatively weak private sector.

Atlantic Canadian families pay a lot of taxes to federal, provincial and local governments including income taxes, sales taxes, health taxes, fuel taxes and many more.

In 2022, a Fraser Institute study estimated the average Canadian family consisting of two or more people paid 45 per cent of its income in total taxes. For Atlantic Canadian families specifically, that number ranges from 42 per cent for Prince Edward Islanders to 47 per cent for Newfoundlanders and Labradorians, with New Brunswickers and Nova Scotians falling in between.

A recent poll, however, finds that 77 per cent of Atlantic Canadians feel the average family is over-taxed. The poll, conducted by Leger and commissioned by the Fraser Institute, also found that 75 per cent of Atlantic Canadians expressed support for the average family to pay 40 per cent or less of their income to governments in total taxes. And the majority of respondents (55 per cent) in the region feel the average family should pay 25 per cent or less of its income in total taxes.

These results suggest a noticeable difference between what Atlantic Canadians believe the average family should pay in total taxes versus what the average family actually pays.

Another consideration is whether individuals and families get value for all the taxes paid to finance government spending in the region. The Leger poll indicates that Atlantic Canadians are not particularly enthused about the services they receive from government.

Nearly half (49 per cent) of Atlantic Canadians feel they receive poor or very poor value for the services governments provide including health care, education, police, roads and national defence. Along with Albertans and British Columbians, Atlantic Canadians voiced the most support for the idea that they receive poor value for government services. In contrast, only 9 per cent of Atlantic Canadians believe they get good or great value from government services. Less than one in four (23 per cent) Atlantic Canadians believe they receive satisfactory value.

The polling data clearly show that Atlantic Canadians are not happy with government services and strongly support tax reductions. Unfortunately, provincial governments in the region and the federal government in Ottawa have not recognized this desire and have largely chosen not to pursue tax reductions—although there are encouraging signs in New Brunswick after the Higgs government reduced taxes in its latest budget. Hopefully, governments at all levels pay more attention to the wishes of Atlantic Canadians.

Subscribe to the Fraser Institute

Get the latest news from the Fraser Institute on the latest research studies, news and events.