A new Fraser Institute report finds the average Canadian family's tax bill hit $50,721 in 2025, outpacing spending on shelter, food and clothing
The average Canadian family paid 41.9 per cent of its income in taxes in 2025; more than it spent on housing, food and clothing combined.
That’s according to a new report from the Fraser Institute released today (August 13) called The Canadian Consumer Tax Index 2026, authored by economists Grady Munro and Jake Fuss, that found that the average family with a cash income of $121,111 handed $50,721 to governments at all levels.
By comparison, that same family spent roughly 36 per cent of its income on the three core necessities of shelter, food and clothing.
"At a time when the cost of living is top of mind across the country, taxes remain the largest household expense for Canadian families," said Jake Fuss, Director of Fiscal Studies at the Fraser Institute.
A burden that has grown for six decades
The report tracks tax burdens going back to 1961, when the average Canadian family paid 33.5 per cent of its income in taxes. At that time, basic necessities consumed 56.5 per cent of household income, leaving taxes as a secondary line item. The inversion happened gradually, crossing over around 1981, and the gap has widened since.
In nominal dollar terms, the average family's total tax bill has risen 2,928 per cent since 1961 from $1,675 to $50,721. That growth rate outpaces every other major household expenditure over the same period: shelter costs rose 2,349 per cent, food costs climbed 952 per cent, and clothing costs increased just 526 per cent.
Even the Consumer Price Index, which rose 946 per cent over the same stretch, lagged behind the pace of tax growth. After adjusting for inflation, the real increase in the tax burden still amounts to 189.5 per cent since 1961, nearly double in constant purchasing power terms.
Where the money goes
The report breaks down the $50,721 tax bill by category. Income taxes represent the largest share at $16,085, or 31.7 per cent of the total.
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.
As Munro and Fuss note in the report, the crossover point where taxes surpassed necessities as the dominant household expense happened more than four decades ago. The gap has only grown since.
