Deferring Federal Taxes: Illustrating the Deficit Using the GST is a new study that uses the goods and services tax to highlight how much tax the federal government was deferring before the recession. To contextualize the size of the pre-recession deficit, the federal GST (currently five per cent) would have to have been nine per cent in order to balance the budget.

May 19, 2020 is Tax Freedom Day, which represents the total yearly tax burden imposed on Canadian families: If you had to pay all your taxes up front, you’d give government every dollar you earned before May 19. This year, the average Canadian family will pay 37.7 per cent of its income in taxes. Ordinarily Tax Freedom Day comes much later in the year—last year it fell on June 8th—but, an earlier Tax Freedom Day this year is nothing to celebrate, since it’s not the result of governments reducing taxes. Instead, Canadian families have been significantly impacted by the economic shutdowns in response to COVID-19. When the economy slows and incomes decline, Canadians are bumped into lower income tax brackets and pay a smaller percentage of income in taxes. Canadians have also reduced their spending, which means less sales taxes are being paid.

A Friend in Need: How Albertans Continue to Keep Federal Finances Afloat, 2020 finds that from 2014 to 2018, Alberta’s net contribution to federal finances was $94.9 billion, by far the largest contribution from any province during that time period. Crucially, Ontario’s net contribution was $58.3 billion, but it’s population in 2018 was more than three times larger than Alberta’s. British Columbia was the only other net contributing province ($29.6 billion) during that time, meaning every other province received more from Ottawa than it sent to Ottawa.