Dear John,
I hope this email finds you well, and that you are enjoying whatever bit of summer we have left. As we settle into the cooler weather, I thought I would send you an update on what we’ve been up to here at the Institute.
It has been a busy year so far!
We’ve been working hard setting the debate across Canada and providing Canadians with good information to hold their governments accountable.
Canadian households are feeling squeezed… and the government is to blame
There is no doubt that Canadian families are feeling squeezed. When I ask people what has led to this, most answer that things have gotten more expensive – particularly housing and food costs.
That is not wrong: housing costs for the average family are up 18% since 2020, food costs are up 17%!
But the main driver of the budget squeeze faced by the average Canadian family is the tax bill imposed on it by governments.
As a recent Fraser Institute study finds, the tax bite for the average family is 43% of its income. That’s more than it spends on food, housing, and clothing – combined.
And this tax bill is UP 24% since 2020!
So if governments truly want to make life more affordable for families, maybe they should look in the mirror and reduce the tax bill!
Unfortunately, we’re getting poorer…
Another one of our recent studies examines Canada’s historic and projected GDP per capita growth compared to 30 other industrialized countries.
While Canadian income growth roughly kept pace with the rest of the 30-country group from 2002 to 2014, it has since declined sharply.
We now rank third lowest for average growth from 2014 to 2022, and looking forward to 2060, our average annual growth rate is forecasted to be dead last.
Much of this decline has been self-inflicted through poor government policy, especially at the federal level. And unfortunately, it just keeps getting worse.
John, as you can imagine, it can be quite hard for everyday Canadians to comprehend the scale of deficits and debt that we so often refer to in our studies.
So to help put it into context, just a couple weeks ago we put out a study that showed what a median family’s household budget would look like if it managed its finances the way the federal government does.
It found that the median family earning $101,821 in 2024 would be spending $109,982.
To cover the difference, it would put $8,161 on a credit card… despite already being $427,759 in debt!
And of that total amount spent, $11,066 would go towards interest on the debt this year.
Simply put, a Canadian family that chose to spend like the federal government would be in serious financial trouble.
On a more optimistic note…
Despite all this bad news, decisive changes to federal policy could quickly return Canada to a trajectory of prosperity and opportunity for all.
That’s why we are producing a series of essays detailing the policies required to set Canada back on track.
We expect that this series, which provides a roadmap and rationale for why the recommended reforms will lead to a better tomorrow for Canadians, will help voters make better-informed decisions – and also ensure that future governments are aware of the policies required to correct our course!
As an example, we recently released A New Federal Fiscal Framework for Canada, which found that modest spending reductions (just 2.3% over two years!) and the elimination of some tax credits and exemptions, would enable the federal government to provide tax rate reductions that would benefit most Canadians.
I’m happy to report that this study, as well as the others mentioned above, received widespread coverage in major national newspapers and in regional markets from coast-to-coast. They also reached millions of people online!
John, we’re only able to continue this good work thanks to the ongoing support of people like you.
If you appreciate the work we do, and are with us in our fight for a better Canada, please consider making a donation today [[link removed][campaignid]]. Each donation entitles you to a generous tax credit when you file your 2024 taxes!
Thank you so much for your ongoing support.
Sincerely,
Niels Veldhuis
President
The Fraser Institute
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