Dear John,

Every year at the Fraser Institute, we calculate the total tax bill – which includes income taxes, property taxes, sales taxes, fuel taxes, etc. – for the average Canadian family.

This year we found that the average family paid 43% of its annual income in taxes in 2023.

That’s more than it spent on basic necessities such as food, clothing and housing combined, and significantly higher than the 33.5% it paid in 1961.

In other words, the average family’s tax bill has increased 180% since 1961 after adjusting for inflation.

In response to these findings, a Toronto Star column claimed that we are “distorting the public debate over taxes” by publishing these facts, and claimed that the effective tax rate has only “increased by 28% since 1961.”

They presumably arrived at this 28% figure by simply calculating the change in the share of income going to taxes from 33.5% in 1961 to 43% in 2023.

Yes, that’s one way to measure tax increases. But it doesn’t tell the whole story.

The inflation-adjusted dollar value of the tax bill – what the average family actually pays – has increased by 180.3%.

That’s not “distortion”. That’s explaining the increase in terms everyone can understand.

And it’s a very important point: taxes, particularly at a time when families are struggling with the cost of living, have real-world effects.

According to a recent poll, 74% of respondents feel the average family is overtaxed.

The logical following question has to be: do families get value for the high taxes they pay?

Polling shows nearly half (44%) of Canadians feel they receive “poor” or “very poor” value from government services, while only 16% believe they receive “good” or “great” value.

This should be no surprise: health-care wait times are at record highs; student test scores are declining; and Canada routinely fails to meet our NATO defence spending commitments.

Meanwhile, governments waste taxpayer dollars on pet projects like a federal infrastructure bank which, with a budget of at least $13 billion, has delivered only two relatively minor projects in seven years.

And don’t forget about the handouts to new electric vehicle owners that cost taxpayers (including Canadians unable to afford EVs!) more than $587 million annually.

Can we really say governments are using our money wisely?

John, it is clear that the work we do here at the Fraser Institute is more important than ever.

Canadians deserve honest, clear information about how much they are taxed, and how those tax dollars are spent.

Therefore any honest discussion about taxes simply must include details about the actual bill Canadian families pay!

If you support our work in this area, please consider making a donation today.

We of course do not rely on government funding – we rely entirely on the support of Canadians like you.

Thank you for your ongoing support.

Sincerely,

Niels Veldhuis
President
The Fraser Institute