Payroll and health taxes follow at $11,312 (22.3 per cent), with profit taxes at $7,182 (14.2 per cent), sales taxes at $6,972 (13.7 per cent), and property taxes at $4,307 (8.5 per cent). The Fraser Institute’s calculation includes all federal, provincial, and local levies (income, payroll, health, sales, property, fuel, carbon, vehicle, import, alcohol and tobacco taxes) as well as costs passed to consumers through business taxation.
The report also flags a scenario that may concern advisors focused on long-term fiscal risk: if federal and provincial governments had balanced their budgets through higher taxes rather than running deficits, the consumer tax index would reach 3,324, representing a 3,234 per cent increase since 1961.
That figure underscores the degree to which current debt-funded spending represents a deferred tax obligation, one with implications for future clients’ financial planning horizons.
A brief dip in the tax index occurred in 2020, when pandemic-related shifts temporarily reduced tax revenues and elevated some measures of household income. The index has since recovered to its pre-pandemic trajectory.
The steady upward march of taxation as a share of household income means that tax planning is not simply a strategy for the wealthy, but a necessity for middle-income Canadians seeking to protect purchasing power over time.