If you thought Americans were paying too much in taxes, consider this new report from Fraser Institute that shows Canadians are spending more money on taxes than the basic necessities, such as food, clothing and shelter combined.
The independent, non-partisan think-tank published the findings from its Canadian Consumer Tax Index and discovered average families earned $74,113 last year and paid $31,615 in taxes. This means 42.7 percent of their annual incomes went to taxes at the federal, provincial and local levels. The average family spent 36.9 percent of their incomes on the basic daily necessities.
The Canadian Consumer Tax Index calculates all of the different taxes Canadians pay at all three levels of government: income taxes, property taxes, sales taxes, Canadian Pension Plan contributions, Employment Insurance, gas taxes, import duties, profit taxes and other “hidden” taxes.
Since 1961, the tax bill for the average Canadian family has soared 1,787 percent. This figure has actually exceeded the costs associated with shelter (1,290 percent), clothing (607 percent) and food (578 percent). According to the report, the tax bill even exceeded Statistics Canada’s Consumer Price Index (CPI).
“Taxes are far and away the largest and fastest-increasing expense in the average household budget,” said Charles Lammam, Fraser Institute associate director and co-author of the Canadian Consumer Tax Index, in a press release.
Unfortunately for Canadians, there doesn’t seem to be any respite in the near future. The federal government as well as most of the provincial and territorial governments are heavily in debt and running budget deficits. A new spending venture and a deficit are eventually just a tax for the next day so expect the tax bill to increase over the coming years.
“The outlook for taxpayers is bleak, since deficits must one day be paid for by working Canadians unless governments take serious steps to reduce spending,” Lammam said. “When government deficits, aka deferred taxes, are factored in, the total tax bill for the average Canadian family has increased by 1,932 per cent since 1961.”
Canada’s national debt is close to $610 billion – combining all of the provinces’ debt the real debt is roughly $900 billion – and maintains a budget deficit of about $18 billion. The federal government spends approximately $50 billion each year in interest payments.
Although the Canadian federal government is vast and is involved in many facets of its citizens’ lives, the opposition leaders believe the 2013 federal budget is too “small,” “minimalist” and “least imaginative.”
“It further confirms that we’re going to have the smallest, least imaginative government … doing as little as possible to address the issues and challenges that face Canadians,” former Liberal interim leader Bob Rae said after the budget proposal was released.
Meanwhile, Canada’s largest province, Ontario, is in turmoil. After nearly a decade of Liberal governing, Ontario has become a have-not province and is drowning in debt, budget deficits and scandals. The provincial debt is more than $235 billion, the budget deficit is inching towards $10 billion (official government numbers) and the government has faced a series of costly scandals, including the power plant cancellations, eHealth, ORNGE and much more.