Canadian families spend more on taxes than basic necessities

A new report from the Fraser Institute reveals that the average Canadian family now spends more on taxes than on the combined costs of food, shelter, and clothing. According to the 2026 edition of the Canadian Consumer Tax Index, taxes account for 41.9 percent of the average family's income, while basic necessities consume 36 percent.

In 2025, the average Canadian family earned $121,111 and paid $50,721 in total taxes. This represents a significant shift from 1961, when taxes accounted for only 33.5 percent of income and basic necessities required 56.5 percent. The study notes that the total tax bill has grown by 2,928 percent since 1961, outstripping the growth of shelter, food, and clothing costs.

The tax burden is primarily driven by income taxes (31.7 percent) and payroll and health taxes (22.3 percent), followed by profit, sales, and property taxes. Jake Fuss, director of fiscal studies at the Fraser Institute, stated that taxes remain the largest household expense, leaving families with only 22.1 percent of their income for other costs such as childcare, entertainment, and savings.