Canadians now pay more in taxes than food, housing and clothing combined, per the Fraser Institute

Taxes are the largest expense for Canadian households.

A recent study by the Fraser Institute, a right-leaning think tank, shows that in 2023, the average household spent 43% of its income on taxes alone.

"I was shocked by the results of the study because many of these taxes are hidden," said Wendy Brookhouse, financial planner and CEO of Black Star Wealth. "You don’t even realize how much they add up."

The study found that the average family earned about $109,235 last year and spent $46,988 on taxes. In 2000, the average income was around $54,488, with $25,259 spent on taxes. Looking back to 1961, when the average income was $5,000 and taxes were $1,675, taxes consumed roughly a third of earnings.

"It's not just income taxes. It also includes payroll taxes, sales taxes, fuel taxes at the pump, and property taxes," said Jake Fuss, fiscal studies director at the Fraser Institute.

Last year, the amount spent on taxes exceeded combined expenses for housing, food, and clothing. On average, housing cost $23,809, food was $12,607, and clothing cost $2,514.

"Canadians are facing severe affordability issues right now," said Jay Goldberg, interim Atlantic director for the Canadian Taxpayers Federation. "Recent statistics show that 50% of Canadians are just $200 away from being unable to pay their bills, and taxes play a significant role in this."

Since 1961, the total tax bill for families has surged by 2,705%, while housing costs have risen by 2,006% and food expenses by 901%.

Goldberg urged governments at all levels to consider tax cuts.

In the meantime, Brookhouse recommended that people ensure they are claiming all available credits and deductions and contributing to an RRSP, even if it's a small amount.