Taxes versus the Necessities of Life: The Canadian Consumer Tax Index 2021 edition

Summary

• The Canadian Consumer Tax Index tracks the total tax bill of the average Canadian family from 1961 to 2020. Including all types of taxes, that bill has increased by 1,992% since 1961.
• Taxes have grown much more rapidly than any other single expenditure for the average Canadian family: expenditures on shelter increased by 1,671%, clothing by 629%, and food by 767% from 1961 to 2020.
• The 1,992% increase in the tax bill has also greatly outpaced the increase in the Consumer Price Index (773%), which measures the average price that consumers pay for food, shelter, clothing, transportation, health and personal care, education, and other items.
• The average Canadian family now spends more of its income on taxes (36.4%) than it does on basic necessities such as food, shelter, and clothing combined (35.4%). By comparison, 33.5% of the average family’s income went to pay taxes in 1961 while 56.5% went to basic necessities.
• In 2020, the average Canadian family earned an income of $96,333 and paid total taxes equaling $35,047 (36.4%). In 1961, the average family had an income of $5,000 and paid a total tax bill of $1,675 (33.5%).
• This bulletin shows a sharp drop-off in the tax bill from 2019 to 2020. However, this is a temporary and isolated incident that is entirely due to the economic and fiscal circumstances of the COVID-19 pandemic.