Canada : A new federal holiday? it could be. [2023 ed.]

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https://torontosun.com/opinion/its-tax-freedom-day-were-paying-more-now-than-before-covid The cost of living remains top of mind for many Canadian families, particularly at the grocery store, where prices have risen rapidly. But one growing expense for families has flown under the radar — taxes. While it’s easy enough to check your income tax return or pay stub to see how much you pay in personal income taxes, it’s a much more difficult task to calculate your total tax bill because Canadians pay many different taxes. Not only do we pay income taxes, we

also pay sales taxes, health taxes, payroll taxes, property taxes, fuel taxes and many others. And while some of these taxes are visible, many are hidden, which only adds to the confusion. To help clarify the situation, each year the Fraser Institute calculates Tax Freedom Day, which is the day of the year when the average Canadian family has earned enough money to pay all taxes levied by the federal, provincial and local governments. In other words, if Canadians were required to pay all their taxes up front, they would have to pay every dollar they earned to government prior to Tax Freedom Day. In 2023, we estimate the average Canadian family (two or more people) earning $140,106 will pay $64,610 in total taxes—or 46.1% of their income. So, if you paid all your taxes for 2023 up front, you would pay the government every dollar you earned until June 19. After working the first 169 days of the year for the government, you now get to work for yourself. This year’s Tax Freedom Day (again, June 19) arrives eight days later than in 2019, the last year before the pandemic, when the average Canadian family paid 43.9% of their income in total taxes, which means the tax bill for Canadian families has grown considerably since the onset of COVID. And all signs point to rising taxes in the future. This year, the federal government forecasts a $40.1 billion deficit. Combined with an additional $6.9 billion in cumulative provincial deficits, the total federal/provincial government debt is due to increase by $47.0 billion in 2023/24. With no sign of fiscal restraint on the horizon, particularly in Ottawa, future generations of Canadians will almost certainly face tax increases to cover today’s government spending. To help illustrate the size of the government debt burden, we’ve also calculated a Balanced Budget Tax Freedom Day, which calculates the hypothetical tax burden on Canadians if governments across the country had to raise taxes today to balance their budgets. This year, Balanced Budget Tax Freedom Day would arrive on June 27. With Tax Freedom Day this year falling eight days later than in 2019, the burden of taxation is clearly increasing for Canadian families. Unfortunately, the tax bill will likely increase in the future, which means Tax Freedom Day will come later in coming years. — Fuss and Palacios are economists at the Fraser Institute. This op-ed was coauthored by Nathaniel Li, a Fraser Institute economist. Reader’s Comments: No comments, as everything is well said.