Do you know how much Canadians pay in taxes?
All told, we pay 41.9% percent of our income in taxes.
The average family’s tax bill is even greater than what we spend on our basic necessities such as food, shelter, and clothing.
The average Canadian family’s expenditures as percentage of cash income, 2025
Source: Fraser Institute. August 2026. All expenditure items include indirect taxes. Expenditures for 2025 were estimated using the results of the 2023 Survey of Household Spending and adjusting final results for inflation.
Do you know how fast Canadian taxes have been rising?
Over the past 64 years, our taxes have increased 2,928%.
What is more, this rate of increase has outpaced gains in our income, as well as our basic needs, and it has also far outpaced CPI.
| Taxes are rising faster than inflation and income |
| Increase in the Canadian Consumer Tax Index relative to other indices, 1961–2025 |
Source: Fraser Institute. August 2026. All expenditure items include indirect taxes. Average shelter expenditures for years prior to 1998 are estimates. The estimate is to take account of a change in the definition of shelter between the Family Expenditure Survey and the Survey of Household Expenditures. Expenditures for 2010 were estimated using the results of the 2009 Survey of Household Spending and adjusting final results for inflation. Expenditures for 2024 to 2025 were estimated using the results of the 2023 Survey of Household Spending and adjusting final results for inflation.
Additionally, at certain levels of income individuals will experience claw-backs on some or all of their Old Age Security pension!
While we can’t avoid all taxes, happily we can reduce some of them.*
For example, investment income is one area where we may benefit. You may want to consider tax smart investing strategies that include: income splitting, tax-deferred and/or tax-free accounts, tax harvesting and generating tax-efficient income, such as capital gains and dividends.
These advantages may help Canadians to stay ahead of their expenses.
Call us to discuss the benefits of tax smart investing!
Your CommonWealth Team
*Note: These updated statistics include taxes on income, payroll, health taxes, sales taxes, property taxes, fuel taxes, carbon taxes, vehicle taxes, import taxes, alcohol and tobacco taxes, and more.
